Human Resource Planning and Audit [1 ed.] 9789350440216, 9788184886580

Citation preview

Human Resource Planning and Audit

Arun Sekhri Director, Search Right Consultants Prof. Mahatma Gandhi Mission, Institute of Management Studies and Research

Visiting Faculty Institute of Technology and Management, Kharghar Mumbai School of Business, Belapur (Navi Mumbai)

FIRST EDITION : 201

['-------------

Hal GfIimalaya GpublishingGJIouse MUMBAI • NEW DELHI • NAG PUR • BENGALURU • HYDERABAD • CHENNAI • PUNE • LUCKNOW • AHMEDABAD • ERNAKULAM • BHUBANESWAR • INDORE

© Author

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form of by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the publishers.

ISBN

: 978-81-84886-58-0

FIRST EDITION: 2010

Published by

Mrs. Meena Pandey for HIMALAYA PUBLISHING HOUSE PVT. LTD., "Ramdoot", Dr. Bhalerao Marg, Girgaon, Mumbai - 400 004. Phones: 2386 01 70/23863863, Fax: 022-238771 78 Email: [email protected] Website: www.himpub.com

Branch Offices: New Delhi

"Pooja Apartments", 4-B, Murari Lal Street, Ansari Road, Darya Ganj, New Delhi - 110002. Phones: 23270392, 2327863 Fax: 011-23256286

Nagpur

Kundanlal Chandak Industrial Estate, Ghat Road, Nagpur - 440 018. Phones: 2738731,3296733 Telefax: 0712-2721215

Bengaluru

No. 16/1 (Old 12/1), 1st Floor, Next to Hotel Highlands, Madhava Nagar, Race Course Road, Bengaluru - 560 001. Phones: 22281541,22385461, Telefax: 080-22286611

Hyderabad

No. 3-4-184, Lingampally, Besides Raghavendra Swamy Matham,Kachiguda, Hyderabad - 500 027. Phone: 040-27560041,27550139, Mobile:- 09848130433

Chennai

No. 85/50, Bazullah Roda, T. Nagar, Chennai - 600 017. Phones: 044-28144004/28144005

Pune

First Floor, "Laksha" Apartment, No. 527, Mehunpura, Shaniwarpeth, (Near PrabhatTheatre), Pune-411 030. Phones: 020-24496323/24496333

Lucknow

C-43, Sector - C, Ali Gunj, Lucknow - 226 024. Phone: 0522-2339329

Ahmedabad

114, "SHAlL", 1st Floor, Opp. Madhu Sudan House, C.G. Road, Navrang Pura, Ahmedabad - 380009. Phone: 079-26560126, Mobile: 09327324149

Ernakulam

39/104 A, Lakshmi Apartment, Karikkamuri Cross Rd., Ernakulam, Cochin - 622011. Phones: 0484-2378012, 2378016, Mob: 09344199799

Bhubaneswar

5 Station Square, Bhubaneswar (Orissa) -751 001. Mobile - 9861046007, E-mail:[email protected]

Indore

Kesardeep Avenue Extension, 73, Narayan Bagh.Flat No. 302, IIlrd Floor, Near Humpty Dumpty School, Narayan Bagh, Indore (M.P.) - 452 007. Mob-09301386468

DTPby

HPH, Editional Office, Bhandup. (Sarita)

Printed by

Geetanjali Press Pvt. Ltd., Nagpur

Contents 1-39

1.

THE GREAT HUMAN RESOURCE TURNAROUND

2.

BASICS OF HUMAN RESOURCE PLANNING

40-57

3.

RETURN ON INVESTMENT (ROI) IN HR PLANNING

58-75

4.

CORPORATE MISSION AND VISION STATEMENTS

76-184

5.

STRATEGIC HUMAN RESOURCE PLANNING

185 -215

6.

STRATEGIC MANPOWER PLANNING

216-250

7.

STRATEGIC PLANNING

251 -276

8.

STRATEGIC PLANNING IN CORE AREAS OF HUMAN RESOURCE

277-427

9.

STRATEGIC SUCCESSION PLANNING

428-456

10.

HUMAN RESOURCE AUDIT

457-550

11.

AUDIT OF HUMAN RESOURCE COMPETENCIES, STRATEGIES, SYSTEMS,

551 -586

STRUCTURES AND FUNCTIONAL ROLES OF HUMAN RESOURCE

12.

WRITING HUMAN RESOURCE AUDIT REPORT

587-627

APPENDIX

628-667

•

CONCEPTS AND DEFINITIONS

•

A WORD ABOUT MANAGEMENT GURUS

BIBLIOGRAPHY AND REFERENCES

668-673

AUTHOR INDEX

674-677

"This page is Intentionally Left Blank"

THE GREAT HUMAN RESOURCE TURNAROUND

After Studying this chapter, the students will learn the following topics:

Learning Objectives

• • Making Human Resource Business • Global Human Resource: A Resource People. EperghlgTrends Pg~adigm$hift

Paradigm Shift Two: .• ~e~radigh,Shift Three: Erol1'1,?u~iness Success, ·. • Paradigm Shift Four: From Talent ... . Management. .paradigrTIShift Five; From Cost Centre • Paradigm Shifts Six: Human Development ResourCin£,1.

CHAPTER ONE

- - - - - - - - -', . ,---------'"""'------------THE GREArr HUMAN RESOURCE TURNAROUND: LEVEL ONE:

HOLISTIC APPROACH TO HUMAN RESOURCE HELP ASHOK LEYLAND AND OTHERS TO TURNAROUND

LEVEL TWO:

HUMAN RESOURCE COMPETENCIES NEED TO BE BUSINESSS DRIVEN

LEVEL THREE:

MAKING HUMAN RESOURCE BUSINESS SAVVY

LEVEL FOUR:

PARADIGM SHIFT: EMERGING TRENDS FOR HUMAN RESOURCE.

3-5 6-8 9 - 12 13 - 39

LEVEL ONE

d

HOLISTIC APPROACH TO HUMAN RESOURCE HELP ASHOK LEYLAND AND OTHERS TO TURNAROUND THE NEWS WE CAN USE: "A holistic approach to human resource management, processes and optimal utilisation of resource have contributed to the turnaround at Ashok leyland's Hosur-I plant and ensured sustained increase in profits during the current year," said J.N. Amrolia, Executive Director, Human Resource, Ashok leyland Ltd. The plant, which had, till six years ago, been plagued by labour problems, is set to sustain its profit, and witness increase in turnover during the current year. "The turnaround has been achieved through strategic initiatives involving changes at every level of management, increased employee involvement and structured communication exercises, removal of non-performers, building collaborative union initiatives, competency building and employee recognition mechanisms. Production processes had been revamped, optimising supply chain and rationalizing resource and cost reduction. These had contributed to significant enhancement in indicators of improvement such as production, productivity, adherence to targets, positive relationship with workmen and profitability and above all a total involvement of Human Resource in setting up corporate goals and their achievement," he said. Amrolia was addressing a workshop on competitiveness through quality, productivity and human resource organised by the Employers Federation of Southern India. G.S. Ramesh, Vice President-HRD, Hyundai Motor India Ltd, said that among the challenges faced by the company was the bonding needed to be achieved between people from diverse cultures. This had been achieved through cross-cultural exercises to enhance awareness and creating a common platform of "Hyundaian" culture. Mechanisms for continuous communication, consultation and participative management had been put in place, he said. Bhushen Raina, Managing Director, who made the turnaround pOSSible, changed the way Tinplate Company of India Limited (TCll of Tata group) used to do business. In twelve years, renewed vision of the company's aim to become an industry leader in value creation, servicing packaging needs and creating a greener future. Sales/ production increased to 125%, exports touched 28% and employees' strength reduced to 1715 through initiatives in leadership development, innovative manufacturing and export strategies and the participation of human resource function in organizational development activities at grassroot levels. Such news, involving human resource function and its participation and contribution to corporate turnaround - a positive reversal in the performance of a company or the overall market are real but rare. Do we need a human resource-turnaround? The issue we face is pretty serious and real but rare. Are we getting warning signals? Yes! So what are we up to? How are we planning to face and resolve the issue?

Human Resource Planning and Audit

EARLY WARNING SIGNALS OF DECLINE: "Most ailing organizations have developed a functional blindness of their own defects. They are not suffering because thEW can not solve their problems but because they can't see their problems" says John W Gardner (On Leadership 1990) Despite Gardner's statement, it is genuinely difficult to discern and diagnose company's problems before they threaten the progress or even the very existence of an enterprise. A 2003 Mercer survey of 200 CFOS' showed that 92% believed human capital management has a great impact on customer satisfaction, 82% believed that effective management of human capital has a positive impact on profitability and 72% believed that human capital practices impact innovation and new product development. We face, for a change, some serious questions: 1. This is good news for Human Resource professionals. The world is seemingly ready to accept everything the profession has to offer. But is everyone in the profession ready to deliver? No! 2. Is human resource like an ailing organization, the existence of which is under threat from its own profile and contents? Yes! 3. Has Human Resource been able to move out from of its 'Back Office' image? No! 4. Are these warning signals real? Yes! 5. Is Human Resource at a crossroads, and shall either have to face up to the challenges confronting organizations or becomes a marginal contributor to corporate success? Yes! 6. Do we really need a turnaround in human resource? Yes! Then; What are our compulsions for a human resource turnaround?

COMPULSIONS FOR HUMAN RESOURCE TURNAROUND: 1. Operating Without Clear Strategic Plan: WithOtlt -the strategic plan, the human resource is almost guaranteed to have an unfocused resource and multi-directional activities. The result will be a number of failures, some that are going to be seen as dumb ideas. A survey conducted by Society for Human Resource Management and Balance Scorecard Collaborative, showed that only 34% Human Resource respondents indicated that their executives viewed Human Resource as a strategic partner.

2. Poor Communication: Often a plan is devised by the executive group and then it is not well communicated to the organization. Hence, the execution is flawed leading to lack of success.

3. Refusal to Shift Paradigm with Changing Market Conditions: Once a programme is underway in development, it generates a momentum all of its own and people/companies are hesitant to make changes, particularly if one has ownership in it. What was a good idea at the start becomes a dumb idea in a changed economy.

4. Absolute Lack of Business Knowledge: Human Resource professionals neither understand and speak the language of business nor do they contribute to the conversation around the strategy table.

The Great Human Resource Turnaround

5. Pride and Arrogance getting in the Way:

•

People are generally scared of Human Resource department because they take decisions based on ''who is right" not ''what is right". Human Resource means 'power and authority' and people see this as being misused.

6. Human Resource Delivery: Human Resource People don't run an extra mile for their People: Human resource professional must deliver human resource services seamlessly, if they don't, how can they ever hope to make strategic contribution to the business of an o"rganisation?

7. Care about People: It is not everyone's Cup of Tea: Human Resource professionals who care about people are able to make strategic decisions that are based on full understanding of how it will impact people. "Human Resource! What is so great about human resource? Anyone can manage Human Resource, even a graduate can handle Human Resource department, don't worry about Human Resource ... " A CEO of a pharma company was heard telling his visitors from another company; This is unfortunate, real but not rare, that right from top to bottom, from CEO down to an officer, all of them not only feel but believe that anyone in the hierarchy can manage Human Resource.

SIMPLY SPEAKING ... People are attracted, selected and stay with professions that fit their self-image. How do we change the human resource image in people's mind? This is a huge undertaking for any organisation or profession. Let us get ahead with our 'case study' in the next level to understand the nuances of change of image and emerging trends in human resource.

•

Human Resource Planning and Audit

. LEVEl. TWO

HUMAN RESOURCE COMPETENCIES NEED TO BE BUSINESS DRIVEN CASE STUDY: GEETA KAPUR & MANISH PURl: Geeta Kapur, 38, Director - Human Resource, was looking at the absence and late coming record of the managerial and the unionized staff of the corporate office and the factory of National Petro Product Limited where she had joined 5 years ago. She was a post graduate in management from Indian Institute of Management. She had an excellent track record of performance in human resource and administration at various establishments like Pepsi, Britannia, Wipro and Larsen & Toubro. She was known as a successful trouble shooter and managing disagreements in her field. At National Petro Product, She had tried very hard to motivate the staff to be responsible and get them all in line with some success to reduce the absenteeism, late coming, drunkenness and mental lethargy. The average monthly rate of late coming and absenteeism stood at 14 and 19 percent respectively. What caught her attention was the record of Manish Puri whose absence and late coming graph was steadily increasing beyond the average rate of absenteeism in the organization. Manish Puri is the officer in charge of documentation section of the Production Planning Department with nearly twelve years of service both in the corporate office and the factory. His overall performance was just satisfactory. He was relatively an introvert and showed little interest. His problem was that he regularly planned and used his sick leave with a variety of short absences. Each of such absence, one by one, seemed legitimate. As the officer in charge of documentation, his nuisance value was very high as it meant that some one else had to search the concerned files and the documents whenever he remained absent. Geeta Kapur decided to talk to Manish and asked her secretary to send a message to Manish to meet her in her office. A few minutes later Manish walked-in to Geeta's cabin. "Manish, can we talk about you today first thing this morning", Geeta asked him looking at him curiously. "Yes miss" he replied softly. "How are you feeling lately?" "Fine, absolutely fine" "No problem at home". "Everyone has got problems" Manish replied with his eyes now staring at Geeta Kapur. 'What kind of problems do you have"? "I got no problems", Manish replied defiantly. "I thought, may be you have some problems" Geeta replied.

The Great Human Resource Turnaround

"Why"?

-

"Because I notice that your sick leave has been increasing since last year and this year it is very bad". "I am entitled to take sick leave. I have twelve years of service to my credit". "You are entitled to sick leave only if you are sick. But you seem to be sick so often"? Geeta asked him, this time with little sternness in her voice. "I can't help if I am sick". "Well, your frequent absence causes us problems". "I do my work alright, don't I"? "When you are present, you do. But you have already missed thirty-two days this year". "I have earned the leave and I am entitled to take it also" Manish replied, trying to make his point clear to Geeta. "You are entitled to use the sick leave only when you are sick". "I am sick whenever I am absent". "Are you sure that there is nothing at home which makes you sick so often" Geeta asked him. "I don't know what you mean, Ms. Kapur, I get sick because I am not as healthy as others are" Manish raised his voice. "Your record, which is with me right now, shows that you are absent every fourth day without any prior permission of your superiors" Geeta told him. "Isn't that what sick leave is for and to let me stay at home when I am sick, without losing my pay." "But, you and couple of others in this company are the only privileged ones who fall sick so often" Geeta retorted back to Manish. "That is what I mean. Others get sick too. And when they get sick, they stay at home. I don't stay at home unless I am sick. I have worked for this company for twelve years and my record is good" Manish told Geeta tauntingly. "Well, your record is not good at all and I would like to see it improves fast" "I can't help when I am sick. My work record is good with this company. You cannot get rid of me because I am sick little more than others who are lucky to be healthier" Manish told Geeta dryly. "I did not say that we are going to dismiss you, I only want your record of absence to improve" Geeta reassured him. "Why are you putting this kind of pressure on me because I get sick more than others? I do my best. I cannot help if I am sick" "Man ish, I am not getting rid of you. The only thing which I want from you is that you must improve your attendance" "I will try Ms. Kapur, but this is not ..the way to call me alone here and then threaten me of dire . consequences with termination of my services" Manish told her rudely.

-

Human Resource Planning and Audit

"Look, Manish you are putting the words in my mouth. I never told you that I will terminate your services. For last 30 minutes, I have been driving it hard to put some sense in your mind that it is high time that you improve your record of absenteeism fast before it is too late. The company shall take action against you only when it is convinced that you have failed to improve yourself beyond doubt. Have you now understood what I wanted to tell you" Geeta asked Manish with suspicion.

"I have understood all of your intentions. I always thought that you were a very considerate manager unlike others. But now I know that you are as good or bad as others are. I shall fight out your intentions to get rid of me and I shall ensure that you even do not call me again in your cabin and give threats like this. Just wait and watch" Manish suddenly got up and left her cabin without waiting for Geeta to react. Geeta looked at his record once again, shook her head and wondered as to why she could not convince Manish. She was feeling miserable that she failed. Was it because she lacked skills to handle Manish or was it the absence of strategic planning or was it a sheer lack of her counselling skills or she did not clearly see the objective of meeting Manish or she thought it would be a cakewalk to crack a grade six officer or she just took a casual decision to speak to Manish at the spur of the moment and did not work out her strategies before Manish came in or she did not collect strategic information about Manish or she did not give a pushing start to the conversation with Manish to support her case or was it a too small a case to be managed at her level or she did not realize that the conversation with Manish was getting out of her control and was turning meaningless or she was not business like and allowed Manish to duck every warning and caution she gave him or Manish was just impossible and she gave up to his non-cooperative and negative attitude or she did not act street smart and was not diplomatic in her conversation with him or perhaps she did not want a solution to Manish's increasing absenteeism and waitedior the termination of his services by default or she simply thought that Manish would take her advice seriously and sincerely and improve his record of absenteeism? The reason could be anyone of these or all of these together. If nothing else, Geeta could have been businesslike to convey to Manish to improve his score or perish.

SIMPLY SPEAKING ... The conversation of Geeta with Manish is a real life story of a high profile director of human resource who left National Petro Products (names changed to protect the identify) a few months ago. Manish continuous to enjoy his job with no change in his record of absenteeism and late coming. The story represents scores of Human Resource planners and professionals who are satisfied with their level of mediocrity and their competencies, performance metrics and attitude, are neither strategic nor are they business driven. This may be one of the several reasons why we don't see many of them making to the top as chief executive officers and managing directors of corporate houses. Managing Manish alone was not enough. Geeta had to be business driven in her competencies and skills of managing people.

-

The Great Human Resource Turnaround

LEVEL THREE rl

MAKING HUMAN RESOURCE BUSINESS SAVVY HUMAN RESOURCE NEEDS TO LOOK AT ITSELF MORE AS A BUSINESS: The human resource function today needs to look at itself much more as a business, because that is how executives are looking at it and expecting it to operate. Researchers at the University Of Southern California Marshall School of Business propose a new business model for human resource that will make it a strategic partner. Edward E. Lawler III and Susan Albers Mohrman of the Center for Effective Organizations propose re-conceptualization of human resource as providing three service lines: 1. The first is the basic human resource administrative services and tasks that are involved in compensating individuals, hiring them, training them, and staffing positions in organization. 2. ThE> ~econd is that of a business partner, that helps business units and general managers realize their business plans. human resource needs to provide advice and services concerning organizational development, change management, and the articulation between human resource management systems and business operations. 3. The third requires human resource to contribute to the organization's strategic direction. In this role professionals in human resource must understand business strategy and human capital, and their relationship to organizational capabilities and core competencies to support long-term success. A key question is whether individuals who are currently in the human resource function are capable of filling the business partner and strategic partner roles or not. Many human resource professionals have never worked outside of human resource and as a result have a limited understanding of what the business is about and what is the business strategy and human resource strategy options are.

1. Building Human Resource Business Savvy: "The human resource function will have to move out of its comfort zone," Lawler states. "human resource professionals must increase their exposure to business issues and employ work structures that bring the human resource function together in partnership with the line units and other functions." The research suggests that the human resource function has to make the same design choices as any business about how to organize and deploy resource in order to deliver value to the customer. "The generalist is close to the customer, representing the human resource function in the business unit, and is responsible for tailoring and coordinating services provided by other parts of the human resource organization," said Susan Mohrman.

2. Human Resource at Crossroads: The research suggests the "Human Resource function is a long way from being a high value-added strategic and business partner that delivers high-quality transactional services in a cost-effective manner, and knowledgeable and skilled business and strategic input. Further it shows that human resource is slow to change"

-

Human Resource Planning and Audit

Human Resource is at a crossroads, and will either have to face up to the challenges confronting organizations or become a marginal contributor to corporate success.

3. Human Resource is Responsible for Transformation of some Indian Global Companies: Similar views are expressed by Nirmalya Kumar, co-director of Aditya Birla India Centre at London Business School, who places more emphasis on human resource than marketing. It does sound a tad surprising. Asked about the role marketing played in the transformation of Indian companies into global giants, Kumar says, "Marketing did perform its part, but what really played a key role in the transformation of these companies was the way they managed their human resource and global talent." Kumar's conclusion is drawn from research for his latest book, 'India's Global Powerhouses: How They Are Taking on the World' "While a Singapore or Dubai (based) company has the capability to manage expatriate workforce, many Indian companies are still struggling with it. The' complexity of people management increases when businesses compete at a global level and successful companies need to effectively manage, engage and align their global workforce, which becomes exacerbated by geographical distance, time difference and language challenges as well as (the) demands of local culture, rules and laws, Companies such as Unilever and Nestle SA have a history of managing a diverse workforce, but many Indian companies do not have the experience since the big growth story has happened only in the last 10 years. It's a big challenge and it's a competence that companies will have to learn to become truly global." Kumar adds "Bharat Forge, Infosys, Essel Propack, Marico, Wipro, Mahindra & Mahindra are a few companies, among several others, where human resource has been instrumental in transforming these companies into global power houses".

4. Human Resource People: Have They Lost the Art of Diagnosis? Answer is "Yes": Human Resource Professionals have lots of ideas trying to simplify the most complex set of academic theories, approaches and tools (you will find many of them in preceding chapters too) on almost every concept. But yet, only four out of ten human resource professionals follow and practice Human resource planning and practice business driven human resource management in their organizations. NR Narayana Murthy, the founder Chairman of Infosys Technologies, in his book "A Better India, A Better World" says "No matter how good an idea is, it has no value unless other people understand it, embrace it as their own and help you to implement it.. ... That is why we at Infosys believe in the adage 'In God we trust, everybody else brings data to the table' .... " Nirmalya Kumar echoes similar belief "Each one of the profiled companies has had interesting journeys in the road to becoming Indian multinationals. But if I have to pick one, it would be Essel Propack Ltd, a company unknown to me till early 2006, when I was invited to run a workshop for them. Essel people were full of ideas. They internalised every such idea which led them to consolidate their relationship with Proctor & Gamble. Essel Propack, led by Ashok Goel, is a world leader in laminated tubes with thirty-two per cent market share and a supplier to consumer goods giants such as Procter and Gamble Co., Unilever Pic. and L'Oreal SA. This revelation propelled me to find out if there were more companies like Essel Propack.

The Great Human Resource Turnaround

-

The story of Essel's evolution from a one-unit company in Vasind (in Maharashtra) to a global leader in laminated tubes is the story of evolving with a partner. Essel followed P&G wherever it went, and like most relationships, (this relationship) evolved through a series of accidents, opportunities and mutual gain." Kumar adds it with flavour.

5. Does Human Resource mean business: Answer is "No": "Human resource means business" said Yogibudhahnanda, Head of the Human Resource (name changed to protect the identity) of a well-known temple trust in south India. "We, in human resource, deliver services to our people. We employ around 2000 people. They get their salaries, allowances, uniforms, food and other routine benefits in time. Everything here moves as planned. Almost 200 people are involved in cooking and serving food to the staff in various shifts. Policies and practices are decided by the trust and any wrong procedure or unjustified policy is immediately rectified by the head of the trust. Any demand or grievance received from the employees is settled across the table between the staff and the members of the trust" He looked at us and smiled. "How do you manage to hire so many people" we asked him." Well, we hire good people who can be moulded and trained as per our need and who can grow with us. We have four peak and two lean cycles of hiring throughout the year. The hiring committee consists of six trustees and the human resource head. Most of our staff is educated up to 12th standard but we take graduates and post graduates for managerial jobs. We hire from India, USA, UK, Nepal, Sikkim, Singapore and Hongkong. We deal with diverse workforce. We have job profile for every category of staff. For example, I am a past student of 11M Banglore and working here for last five years. My role profile is well defined and I know what is expected out of me. With us, there are no shortcuts in Human Resource. We deliver in every situation" he smiled again when he finished. This is real but rare.

6. Human Resource always Get, Keep and Grow Good People? Answer is "No": Sam Walton (Wal-Mart) told Colman Peterson, Executive Vice-President of Wal-Mart People Division 'Why not hire friendly upbeat people?" The final consideration was the ''war for talent". We adopted a policy on hiring "Get, Keep, Grow" Coleman told journalists in press meet "on days when my human resource problems appear to be overwhelming, I dissect them into these three "buckets" for identification and solution. Those human resource professionals who GET good people, KEEP good people and GROW good people are the real business partners in an organisation" "In my forty-eight years in the auto industry, I probably made six hundred speeches about management. Since my retirement, I have made many more. And I have always said the same thing: Here is what human resource management is about: Pick good people and set the right priorities" says Lee lacocca, former CEO of Chrysler & President of Ford Motors, in his latest book 'Where have all the Leaders gone?' "In contrast to sophisticated production and manufacturing processes, Bharat Forge's Baba Kalyani's approach to human resource management (HRM) was decidedly low-tech. Kalyani referred to HRM as "people systems". We have very simple employee integration process - we constantly communicate, share information being very open. We involve employees actively in the company's activities and direction setting, and ensure that there is a strong community involvement on behalf of the company. The entire human resource team is geared up to achieve this objective" Kalyani told

-

Human Resource Planning and Audit

Nirmalya Kumar in "India's Global Powerhouses "Moreover, human resource has been our aggressive business partner in most of process integrations for our global presence. One has to have a global mindset"

7. Gobal Human Resource-A Competitive Advantage: Are We Ready to Take Off? Answer is "No" If one has to compete in global economy, one need to develop a global mindset and this is expected from every manager in every organization which is competing with the world. It is imperative that Indian companies and their promoters learn to speed up their processes to integrate and embrace a multi-cultural work force. Human resource needs to acquire global competencies to face the challenges for India's global multinationals. "The need to work constantly to open the organization's windows to the winds of new ideas and a multiethnic workforce ... " Kumar Mangalam Birla, Chairman, Hindalco Industries Limited continues "it is relatively simple to address cross-border issues pertaining to technology, finance, markets and products but extremely difficult to cope with challenges relating to human dimension. Being a true-blue multinational is only partly about geographic spread. It is more about mind-set that wants to leverage resource seamlessly across geographic boundaries. It is mind-set that is eager to build unique capabilities to transcend the barriers of language and cultures to create value. It is about being global in attitudes without letting go off your roots" What kind of mind-set is necessary depends up on the competitive position and readiness of a company. But human resource professionals cannot remain laidback for ever. Let's cross over to the next level to find out how and why should they shift paradigm to their advantage.

SIMPLY SPEAKING ... 1. What matters for human resource to foster is the alignment and consistency in understanding the strategy of the company across the whole organization. To meet the challenges of today, Human resource needs to develop a new mind-set of enquiry and support centered on the reconciliation of dilemmas, across the human resource spectrum, and thereby, finally fulfilling its true identity. But it cannot afford not to be the 'strategic business partner' in business if it has to shed its"back office" image. 2. A new paradigm for human resource is in the offing. Shift the focus from 'ROI' (Return on Intangibles) to "ROI" (Return on Tangibles Investment). Invest in people. They are the real assets of human resource. There cannot be any strategic human resource planning without them and their involvement and evolvement. Human resource has to move out of its comfort zone and contribute to the corporate business module aligning itself to the business goals of the company.

=

The Great Human Resource Turnaround

lEVEL FOUR

-

PARADIGM SHIFT: EMERGING TRENDS FOR HUMAN RESOURCE DABUR INDIA: CASE STUDY IN PARADIGM SHIFT: In 1998, the 114 years old Ayurvedic and pharmaceutical products major Dabur India found itself at crossroads. In the fiscal 1998, seventy five per cent of Dabur's turnover had come from the FMCG. Encouraged by this, Dabur family formulated a new vision in 1999 with the aim to make Dabur India as the best FMCG Company by 2004. In the same year, Dabur planned to increase the group's turnover to Rs. 20 billion by the end of the financial year 2003-04. To achieve this goal, Dabur benchmarked itself against other comparable companies such as Nestle, Colgate-Palmolive and Proctor & Gamble. Dabur found itself lacking in many critical areas. While its PIE ratio was less than 24, for most of other companies, it was more than 40. The net working capital of Dabur was whopping Rs. 2.2 billion where it was less than half of it for others. There were other indicators of an inherently insufficient organization including its operating profit margins of 12% as compared to Colgate's 16%, P&G's at 18%. The return on net worth was around 24% for Dabur as against HUL's at 52% and Colgate's at 34%. The Burmans realised that major changes were needed on all organizational fronts. However, media reports questioned the company's capability to shake off its family oriented work culture.

DABUR HIRED McKINSEY: Dabur hired Mckinsey in 1994 for organizational restructuring at a cost of Rs. 80 million. Mckinsey's three-fold recommendations were: • To concentrate only on few businesses. • To improve supply chain and procurement processes. • To reorganize appraisal and compensation systems. Following these recommendations, many radical changes were made with Surmans' decision to take a back seat and appoint professionals for running the day to day business. In November 1998, Dabur appointed Ninu Khanna as the President from Proctor & Gamble. ASS's Yogi Shriram joined as Vice-president - Human Resource, Deepak Sethi as Vice-PresidentMarketing & Sales-Health Care Division and Ravi Shivraman as Vice-President-Finance.

HUMAN RESOURCE TAKES DRIVER'S SEAT TO RESTRUCTURE: Human resource took the driver'S seat. Yogi Shriram with Ninu Khanna decided to do a complete overhaul of human resource systems and shift the focus from production oriented human resource to people centric human resource applications and practices. Khanna extended all the corporate support to Shriram to do the paradigm shift in human resource: 1. Compensation and its valuations were changed and key performance areas (KPA) were introduced.

-

Human Resource Plannmg and Audit

2. Performance appraisal and evaluation was based on achievement of targets and key performance areas. 3. Concepts such as customer satisfaction, increased sales and reduced costs, return on intangibles and return on investment and the shareholders value were introduced as yardstick for appraisals. 4. Employees grievance redressal system was introduced followed by suggestion and welfare oriented schemes. 5. Soft skills, sales and technical training programme were introduced on the basis of training needs survey. 6. Company hired Noble & Hewitt consultants to formulate ESOP scheme. The scheme was introduced for the senior people from the next financial year.

Restructuring seemed to have been extremely beneficial for all the employees. Besides improved morale and reduced employees turnover, the strategic planning, structural and operational changes in human resource created an overall 'feel good' sentiments' in the company. For the first time in the history of the company, it was a showcase of human resource. Dabur's sales increased to Rs. 10.37 billion in 1999-2000 from Rs. 9.14 billion in 1998-99 - an increase of 13.5.%. Dabur's profits also increased by 53% from Rs. 501 million to Rs. 770 million.

PARADIGM SHIFT AND TRANSFORMATION - DRIVEN BY AGENTS OF CHANGE: THOMAS KUHN-1962: In 1962, Thomas Kuhn wrote "The Structure of Scientific Revolution" and fathered, defined and popularized the concept of "paradigm shift". Kuhn argues that scientific advancement is not evolutionary, but rather a "series of peaceful interludes punctuated by intellectually violent revolutions", and in those revolutions "one conceptual world view is replaced by another". Think of a Paradigm Shift as a change from one way of thinking to another. It's a revolution, a transformation, a sort of metamorphosis. It just does not happen, but rather it is driven by agents of change. For millions of years we have been evolving and will continue to do so. Change is difficult. Human beings resist change, however, the process has been set in motion long ago and we will continue to co-create our own experience. Agents of change are driving a new paradigm shift today. The signs are all around us. Dabur's transformation did not happen just by itself. The revolution was driven by agents of change - Burmans, Ninu Khanna, Yogi Shriram and all those who perceived a big picture of Dabur's growth over the years. At Dabur, human resource did not take the back seat. The metamorphosis was lead by human resource. Paradigm shift at Dabur was inevitable. Kuhn states that "awareness is prerequisite to all acceptable changes of theory" It all begins in the mind of the person. At Dabur, the credit for thinking of change goes to Burmans when they thought of transformation and decided to take back seat. The paradigm shift from a typical mechanistic and manufacturing industrial house to an organic, service based, knowledge centred group was visible at Dabur. Change will continue. It's the only true constant. Let's move ahead and find out what are the possible paradigm shifts to impact future of human resource function and professionals.

The Great Human Resource Turnaround

PARADIGM SHIFT FOR HUMAN RESOURCE:

-

1. FROM NON-INVOLVEMENT TO INVOLVEMENT The increasingly global nature of competition requires that companies utilize all of their available resource in order to survive and succeed. This has resulted in an emphasis on the alignment of all functional activities of the company like finance, marketing, operations, etc. towards the achievement of strategic business objectives. This will have impact on strategic orientation, core competence, and involvement of human resource executives in strategic decision-making. Higher involvement of human resource in organizational strategy is strongly related to perceptions of human resource effectiveness, and its participation in economic and business decision-making. This is what is expected from a CEO to involve human resource in strategic business planning and expect human resource to deliver. But this is not happening because 80% CEOs and human resource people don't trust each other and critical issue of human resource involvement is neither discussed nor it is debated as a matter of policy. At micro level, we have some examples to quote and get comfort out of feel good factor. Burmans of Dabur had a choice to take the back seat, restructure the organization and not only involve human resource but gave it the driver's seat to shift the paradigm from zero to hundred percent involvement to turn Dabur to people centric organisation.

2. FROM STRATEGIC PARTNER TO BUSINESS PARTNER The support against human resource management to this paradigm shift is: A. Human Resource is not a small Business Unit (SBU): • Human resource does not understand the business model. • Human resource does not speak business language. • Human resource does not provide return on investment on its own. • Human resource does not sell its business acumen to others. • Human resource is a support system. The support in favour of human resource management for this paradigm shift is: B. Human Resource has Strategic Inputs: • Strategic workforce planning. • Employee engagement. • Strategic compensation and benefit planning. • Retention strategies. • Succession planning. C. Strategies for Human Resource to Earn a Place in the Board Room: • Artificial insemination: Inject Non-human resource people into key positions of human resource. • Sharpen the Saw: Send human resource people into other departments for short term aSSignments.

III'

Human Resource Plannmg and Audit

• Profit Centre: Make human resource earn its own money and be self sufficient and help them understand return on investment.

3. FROM BUSINESS PARTNER TO DRIVING BUSINESS SUCCESS:

PERFUMES & PETALS INDIA LIMITED: SUCCESS OF HUMAN RESOURCE IN MERGER AND ACQUISITION: A CASE STUDY: Perfumes & Petals India Limited is the manufacturer and the distributor of India's leading 'Chrysanthemum' brand of ladies perfumes and toiletries. The company is listed on Bombay and National Stock Exchanges. Within a period of five years, the company has made two acquisitions of firms in the business of manufacturing and distributing ladies perfumes and toiletries.

1. First Acquisition: Some Pitfalls The first acquisition was made using the traditional approach to due diligence, while the second used the recommendations made by Human resource expert. In the first acquisition, the human resource team was not intimately involved in the early stages of the deal for two reasons: 1. Human resource lacked credibility as a contributing strategic member of the executive deal team; and 2. "People" issues were not valued as highly as financial issues. As a result, due diligence from human resource perspective was primarily devoted to discovering the cost of retirement obligations, which could negate the deal or impact price. Human resource was not given the mandate for integration until after the deal closed. And, because integration planning did not begin until well after close, employees of the acquired company did not see themselves as part of Perfumes and Petals India Limited. As a result they were not a part of the new vision for the company; they remained uninvolved and separate in their activities and attitudes. The gathering of data during the integration stage also surfaced cultural, contractual and labour problems that, had they been identified early, may have affected the terms of the deal. Due to these and other challenges, the actual integration process dragged on for a period of several years, preventing the company from realizing the full value of the deal in a timely manner.

2. Second Acquisition: Involvement of Human Resource Then the most important thing happened. Before the second acquisition, the Chairman & Managing Director, Dr. Simranjeet Singh, hired a new Vice-President. Human Resource, Ritu Sanyal, who had experience with acquisitions and mergers and who knew that Human Resource needed to playa crucial role "early and often" in the deal to make it successful. She aggressively leveraged her experience to convince Dr. Singh that human resource should be involved early and at a much deeper level. She told him, "I know from my experiences that human resource sitting on the side lines and simply reacting to demands from operations and executive leadership is a recipe for failure. Human resource needs to be an integral part of the deal team." Dr. Singh thought about what Sanyal had said. He decided to go ahead with a very different approach on his next acquisition, which occurred less than a year later.

The Great Human Resou'rce Turnaround

APPROACH OF RITU SANA VAL: Sanyal's human resource was on the "deal team" from the beginning and participated not only in the financial due diligence, but used the opportunity to build a human resource integration team and gather data for purposes of integration planning. For example, based on discussions with Dr. Singh, her human resource team and some data mining, Sanyal identified the need to look at certain employment practices and determined the need to conduct a compliance audit covering the target acquired company's employment practices and benefits programmes. Sanyal's approach uncovered some issues with the retirement plans and significant problems regarding the classification of certain exempt employees - a problem Perfumes and Petals was able to resolve, avoiding potentially huge liabilities and fines. Because such issues were detected early, they also could be factored into the final purchase price. Sanyal was happy that the new approach also allowed human resource to accelerate the integration planning. At the end of Stage 3, when the deal closed, integration plans were ready to be executed based on the business rationale for the deal - in a manner consistent with the integration of other systems and programmes. The plan was in place. Sanyal used this opportunity to communicate to both organizations' workforces and laid out the plan in a clear and concise manner, managing the expectations of all employees. The target firm's employees felt, and subsequently acted, like part of Perfumes and Petals much more quickly. The integration of the second firm was completed well before the integration of the first firm. Perfumes and Petals has just completed a very successful acquisition of a third firm. Ritu Sanyal was promoted as President-Human Resource and named as one of the most successful human resource professionals by a leading magazine. Ritu Sanyal added value to the business success of Perfumes and Petals through her four key competencies • Understanding the business model. • Business Literacy. • Knowledge and understanding of functional areas within Human Resource. • Skills of a strategic business partner. 4. FROM TALENT MIS-MANAGEMENT TO TALENT MANAGEMENT: A. Mis-Management: Several Reasons

Retaining talent is a serious concern for organizations. Each time a talented knowledge worker walks out of the door, they take valuable expertise and organizationa~ knowledge with them. Why? At the core of the problem is the fact that talent and their managers are often competitors who are striving to climb the same ladder to higher levels of the organization. As a result, their personal career interests are in direct conflict with each other. A key source of this conflict is that people with talent come into organizations eager to learn, grow and develop their careers as quickly as possible. To do this they seek opportunities that provide them with real experience that lead to learning and growth. This includes hands-on experience where they can make mistakes and then figure out how to correct them.

-

Human Resource Planning and AudIt

For managers giving talented juniors stretch opportunities can be risky to their own careers because managers are ultimately responsible for the work product of their employees. If an individual fails to deliver or makes a mistake on an important project, it is the manager who must answer for the ensuing problems. Bosses become insecure when they see that their talented juniors are in demand and get noticed by their super bosses.

And so the safest course for a manager is to err on the side of caution and limit the amount of responsibility that they give talent until they are absolutely sure that an individual can handle the work. The result is that talented juniors can end up spending months as apprentices and trainees to people who are less capable than they but have more experience, or such a talent may be stuck doing boring jobs that use only half of their brain.

SURAJ KAUL: CASE OF TALENT MIS-MANGEMENT: Suraj Kaul who completed his MBA-Marketing from IIM-Kolkata, was hired by a prestigious FMCG firm. He spent the first eight months on the job preparing Power Point Presentations. He spoke to his boss, Shashi Pradhan, General Manager-Marketing. Shashi told him "Diamonds don't get a shine unless they go through a tedious diamond shining process. Similarly, you have to rough it out before you graduate to a more meaningful work". Suraj nodded in affirmation, did not react and walked out of his cabin. Three months later, Suraj walked into Shashi's cabin and handed him over his letter of resignation. Shashi asked Suraj his reason for leaving. "Sir, last time you told me that I am a diamond. I took it seriously. I am joining D'damas." Fifteen days later Suraj left the firm to join D'damas. Human resource was a spectator throughout and did not even hold the exit interview.

SIMPLY SPEAKING ... 1. Today's human resource is focussed mainly on its professional practice, which, like accounting and sales, is important but incomplete. 2. People, intellectual capital, and talent are ever more critical to organizational strategic success. This observation is so common today, that it almost goes without saying. Digitization, labour shortages, growth through acquisitions, simultaneous downsizing and expansion, workforce demographic changes, and globalization are just a few of the trends that have made talent management a top priority.

B. TALENTSHIP & SUSTAINABILlTY: CHALLENGES: Both the paradigms throw up challenges to human resource professionals. Frustration with the current state of traditional human resource, and hopes for something more, are reflected in questions like these: 1. Why is there so little logical connection between our core business management processes and our talent management processes? Our strategic planning, marketing, operations, and budgeting processes connect deeply and logically with how we create competitive success and shareholder value. Yet, at best these processes reflect only general talent goals like headcount, labour costs or generic human resource programmes. At worst, people issues appear only as a head count budget at the end of the plan." 2. 'We invest heavily in the latest human resource measurement techniques: human resource scorecards, human resource financial reports, return on investment on human resource programmes, and studies of how human resource programmes enhance attitudes, skills, and abilities. Yet, these human resource measures seldom influence key business decisions, such

The Great Human Resource Turnaround

-

as acquisitions and entry into new markets. They provide little insight on how well we compare with our competitors in creating competitive advantage through people. Can talent measures truly drive business decisions and investments? 3. Ramesh Jhangiani, President of 'Semantic Technologies' puts it well: "I value the hard work of human resource, but I worry that our organization may not know which talent issues are the important ones, as against which are mostly tactical. I know how to answer that question in finance, marketing, and operations. I'm not sure how to do it for talent. I wish human resource had more to offer here." 4. Human Resource spends a lot of time showing the value of human resource programmes. Yet, in Finance, Marketing, and Operations we judge their value through results: How much they help our leaders make better decisions about those resource to drive organizational effectiveness. Why is human resource different?" 5. The recent surge in human resource measurement systems suggests that many believe the solution lies in better metrics. Finance, marketing, and engineering appear to· have better ''facts and figures" than human resource does. Human resource measurement systems typically strive to show the return on investments in human resource programmes, or apply scorecards and six-sigma techniques to human resource processes; however, research shows that two important goals for human resource measurement, (1) to enhance decisions about human capital and (2) to connect human resource to strategy, are rarely met (Corporate Leadership Council, 2001; Lawler, etal., 2004). 6. Human resource measurement cannot solve the problem alone, because today's measurement systems typically adapt measures designed for other resource and apply them to human resource. For example, six-sigma initiatives often apply accounting-based cost-efficiency or operational measures. The best result is less costly and quicker the human resource processes, but not necessarily better talent. At worst, six-sigma processes achieve gains in efficiency (which is measured) at the expense of significantly reduced quality of talent (which is often unmeasured). 7. The same pattern emerges when measures designed for finance, marketing, or process improvement are applied indiscriminately to human resource. Examples such as 'Human resource accounting,' 'Human resource quality,' 'Human resource branding,' 'Human resource balanced scorecards' can be useful systems if applied properly (Jamrog & Overholt, 2004), but they typically fail to address the fundamental challenge of improving talent decisions (Boudreau & Ramstad, 2003).

C. EMERGING SOLUTIONS: 1. Design Human Talent Supply Chains: • Replicate leanings from the manufacturing sector. • Leverage technology to eliminate excessive human intervention. • Think ''talent mass production"

2. Evolve Talent Development from an Art to a Science: • Move from skills to attributes. • Assess online.

-

Human Resource Plannmg and Audit

• Train holistically. • Accredit candidates.

3. Build Infrastructure to Support the Supply Chain • Career Centres, academies and hostels. • Share burden of skill development between customers and candidates. • Reduce total cost of talent sourcing and development.

4. Build Long-Term Partnerships: Build long term partnerships for critical resource, human talent.

5. Develop Vendors: Develop few vendors and lock them down with long term contracts. Either invest directly or indirectly to deepen relationships. Encourage vendor to keep inventory for "JIT" resource.

6. Invest in Process Quality: Invest in process quality (e.g., R&D in manufacturing sector) for long term gains.

7. Provide Forecast: Provide forecasts (e.g., production/service schedules) to gain visibility into talent pipeline (by days trained, assessment scores)

5. FROM COST CENTRE TO PROFIT CENTRE: 1. What is a Profit Centre or a Strategic Business Unit? A. A Profit Centre or a Strategic Business Unit (SBU) is a business unit within the overall corporate identity which is distinguishable from other business because it serves a defined external market where management can conduct strategiC planning in relation to products and markets. When companies become really large, they are best thought of as being composed of a number of businesses (SBUs). B. In the broader domain of strategiC management, the phrase "Strategic Business Unit" came into use in the 1960s, largely as a result of multi-units of General Electric. C. These organizational entities are large and homogeneous enough to exercise control over most strategic factors affecting their performance. They are managed as self contained planning units for which discrete business strategies can be developed. A Strategic Business Unit can encompass an entire company, or can simply be a smaller part of a company set up to perform a specific task. The SBU has its own business strategy, objectives and competitors and these may often be different from those of the parent company. This approach entails the creation of business units to address each market in which the company is operating. The organization of the business unit is determined by the needs of the market. D. Traditionally, thought of as a cost centre that is just putting an additional burden on the company's finances and acting more like an administration partner to the acceptance of human resource as an investment centre, the road has been hard and long, but very fruitful in this span of time. E. Companies and CEOs are still in the process of realising importance of accepting the human resource function as an investment centre, with the investment showing amazing returns over a period of time.

The Great Human Resource Turnaround

2. Can Human Resource be a Profit Centre? Answer is "Yes" Can human resource be a profit centre or a SBU? A place that earns its own revenues, a place that makes profits just like the sales and marketing divisions, can it be a self-sufficient entity or even more than that. A tough question to ponder over, but something that is of great importance to the human resource managers and companies of tomorrow. The answer is 'Yes' 3. Are There Examples to Prove it? Answer is "Yes" A. Ohara Investment: The human resource development of this non-banking finance company conducts technical and soft skills training programmes for other corporates. B. Aura Management Services: The Company is in the business of consulting in Management Information System and corporate turnaround. The human resource function, apart from giving back office support to other departments within the company, is actively engaged in content development research and publishes books and periodicals specially in developing and writing case studies in all the areas of management such as human resource, marketing, sales, finance, projects, production, brand management strategic and succession management. C. Pooja Publications: The human resource department arranges and promotes education and fairs, exhibitions and conferences & seminars throughout the year.

o.

Ourga Education Society: It runs coaching classes for tenth and twelfth standard students. The human resource department develops and prepares reading material for distant education programmes of various universities and business management schools. E. Brinkman Packaging: The company is engaged in manufacturing stationery and packaging products. The human resource department has recently got into consulting business in educating and preparing corporates to introudce the concept of paperless office. 4. Turning a Cost Centre into a Profit Centre: A. A cost centre may actually provide services that could generate a profit if they were offered in the open market. B. But in most corporate environments, cost centres are not expected to generate a profit and operation costs are treated as overheads. Departments that are typically cost centres include information technology, human resource, accounting, and others. C. However, the complacent acceptance that some departments will always be cost centres and can never generate a profit has changed in some companies. They recognise that cost centres can turn into profit centres by taking the services they used to automatically provide to the company's other business units and making those services available for a fee.

o. The company's other business units are then required to pay for the services they used to get for free. But in return, they are allowed to go outsidie the company and contract with another firm to provide those services. Likewise, the former cost centre may be allowed to sell its services to other companies. The expectation is that this free market system will improve performance through increased competition while increasing profits by turning former cost centres into profit centres. 5. Human Resource should Align Itself with thie Organization's Scorecard: A. While the hum.an resource profit-centre model sounds promising in that it seems to create a quantifiable value proposition for the organisation (its own revenue generation), the organisation needs to think about how this change will impact employees.

Ell·

Human Resource Planning and Audit

B. Under this model, human resource will need to manage marketing, sales and financial health, while managers will have to think about human resource "best" practices and how to buy and apply ~em. . C. This may not be the most effective use of the organisation's skill sets because managers and human resource will be required to focus on areas that are outside their core competencies. As a result, their overall effectiveness may be reduced. D. Areas of focus for human resource will also shift from needs-based to human resource creditbased. As a result, employees may be impacted because they will only be able to use human resource services if their business area has sufficient credits. Further, a company does not want to end up in a situation where internal departments are competing with each other for human resource and possible equalization of payments. Again, this would take the organization away from the key objectives and impact company's employee base. E. Another potential impact on employees is the fact that items such as non-mandatory training, health and safety, work-life programs and perquisites may fall by the wayside, affecting morale, turnover and work-injury claims. This could also have an impact on the recruitment of future employees, as they would be looking for these key offerings when deciding whether or not to join the organization. F. A company also needs to look carefully at how profit will be generated using this model, since it will be simply moving money already in the organisation from one area to another. As a revenuegenerating model, the organization will have to determine if this is a viable solution for the long-term. G. One could do a great deal to show quantifiable human resource value by looking at a human resource model that offers a consultative and strategic partnership role with management and align with the corporation's balanced scorecard. This focusses on numerous stakeholders (employees, customers and investors) and shows performance on a number of dimensions. H. Dave Ulrich, in Human Resource Champions, states that for human resource to be a strategic partner with senior management, it must be equally accountable for all segments of the balanced scorecard (not just the employee dimension). When it comes to the employee dimension of the scorecard, he states that human resource needs to show intellectual leadership. I. David Weiss, in High Impact Human Resource, sees the partnership role as human resource professionals having meaningful and customer-focused conversations from a business perspective (and not just a human resource perspective). He states that human resource will be able to deliver value by integrating and assimilating information about the business; predicting and determining how this will impact people, and creating people and organizational solutions that will increase the likelihood that the business will meet customer needs by implementing its strategic objectives.

J. A human resource team can begin building credibility as a strategic partner by understanding the needs of the business and how this will impact its employee base. They should be sure to provide important human resource services that improve the lives of employees and allow them to best service their customers. Also, human resource should work towards intellectual leadership and understanding of all aspects of employee needs within the organisation. Finally, human resource can prove its value to the organization's executive team by aligning itself with all components of the organization's scorecard and regularly tracking and communicating performance.

The Great Human Resource Turnaround

l1li

6. Steps to Convert Human Resource to a Profit Centre/SBU:

1. Human Resource as a Profit Centre: Here the human resource department has to compete with similar human resource service providers to earn revenue.

2. Key Performance Indicators: Develop a human resource scorecard to evaluate human resource as a profit centre model.

3. Competitor Analysis: Understand the strengths and weaknesses of the competitors to leverage its own strengths.

4. SWOT Analysis of Internal Human Resource: Compare and contrast the various internal human resource sub-functions like training and development, staffing, compensation, and others.

5. Compete in Core Competency: On the basis of previous evaluation selecting an area that is our core competence and using that as a base for rolling out the human resource as a profit centre model.

6. Performance as desired: a. Scenario 1: Yes i. Full fledged rollout - Once the pilot run is successful, the model is extended across all departments. ii. Shift focus to other areas - Replicate the same model in areas of non-core competence.

b. Scenario 2: No i. Human resource reverts to a support position - The human resource department is not ready for the human resource as a profit centre model yet.

ii. Critical re-evaluation of internal systems - Try and rework the systems to make them ready for the profit centre model. 7. Hire New People with Specific Skill Sets: The profit centre model is taken to a new level wherein the human resource department starts competing for external clients as well. To take this forward we need to hire people with the required skill sets and simultaneously develop our internal team for the same.

8. Target Small Companies: To start off, we target smaller external clients to ensure adequate ground work is done before moving on to bigger clients.

9. Performance as Desired: a. Scenario 1: No i. Re-evaluate performance - Corrective action needs to be taken to improve performance.

b. Scenario 2: Yes

i. Hire more people - This is essentially done to build capability for handling bigger engagements. ii. Target bigger clients - Once the required personnel have been hired and trained we can move on to targeting bigger clients.

-

Human Resource Planning and AudIt

SIMPLY SPEAKING ... 1. Transformation of human resource into a profit centre or strategic business centre is a viable proposition subject to company's philosophy and the volume of profit generation and human resource aligning with the organization's balance scorecard.

6. FROM HUMAN RESOURCE DEVELOPMENT TO HUMAN DEVELOPMENT RESOURCING: HRD TO HDR: CASE OF JAI SHIVARAMAKRISHNAN: Jai Shivaramakrishnan is working with MB India Limited for last 3 years as General ManagerHuman Resource and Organization Development. The company is in the business of manufacturing tin, plastic, rubber and paper packaging cans and roll seal closures (RSC) Aerosols, collapsible and rigid tubes, industrial extrusions, crown corks, screw caps, R.C. pilfer-proof and other closures for Hindustan Uniliver Limited, Colgate Palmolive, Godrej, Pepsi, Coke and many other big banner business houses. Mr. Jai Shivaramakrishnan is smart, aggressive, quick witted and creative. He is very popular among the workforce because of his broad minded approach and smart human relations skills. MB India factory is located in an eastern suburb in Mumbai. Its eastern and northern sides are surrounded by small narrow streets, chawls and thousands of slum area huts where one comes across a lot of dirt, filth and 'waste' all around. Western side of the factory opens to 'Dharavi'. About 80% workers of MB India reside in the surrounding localities. On 31 5t December 2006, when everyone in Jai's office was preparing to leave the office to celebrate New Year eve, Jai received a SOS from the factory that a worker named Santosh was admitted in hospital as he was at the terminal stage of TB and had remote chances of survival. Jai immediately rushed to the hospital but Santosh died before Jai could reach him. By January end 2007, five more workers died of TB and 15 others were admitted into infectious diseases NGK Hospital for treatement of 'Leprosy' which was spreading at an alarming speed. As if this was not enough, Jai was told by his staff that three prominent workers from RSC department were tested HIV positive and the hospitals were refusing to admit them for treatment on the pretext that they did not have infrastructure and amenities for treating HIV patients. Jai moved fast and got them admitted into a nondescript hospital through his contacts. While Jai was struggling to overcome these problems, he received an urgent note from Biman Roy, the Director Human resource, from Kolkata asking him to move fast and come out with some creative schemes to provide relief to the victims from these three deadly diseases and educate them as to how to live healthy life. He asked Jai to take help from all government and non-government organizations and agencies to tackle the problems. Jai began thinking. Why have all these problems cropped up together? Is it a mere coincidence or is there a bigger and deeper issue which has remained unattended? What has suddenly gone wrong? Was it that the company was caught unaware and wasn't ready to face and handle the unexpected situations or was it just his own inability and incompetence responsible for his utter failure in detecting such deadly infectious diseases? Has he wasted all his years in running after intangible issues? Is it his single track thinking style which disables him from apprehending the reality side of human resource development? Could he have prevented these situations by thinking out of the box?

The Great Human Resource Turnaround

WHERE TO GO FROM HERE?

-

Jai made up his mind and called up Biman Roy to clear his confusions and answer the questions that were bothering him. Biman flew to Mumbai and got into one to one meeting with Jai. He told Jai that such situations do arise and many a times all of them together. One needs to take a holistic view of these problems and accept them as a part of work life. Problems do not pre-announce their arrival but there are always tell-tale signs which alert us of their arrival. Anyone can observe these alerts if one is careful about smelling the news and apprehending the problems and thus, take preventive steps to handle them more effectively. "But sir, is there any system available within human resource development gamut wherein we may be able to predict or foresee, to the best of our efforts, these and such other hundreds of issues which take a lot of our time as a result of which we are either not prepared to manage them effectively or end up doing one thing at the cost of another," Jai asked Biman, feeling little better and reassured. "Jai, you need to innovate a system which may assist you in apprehending the problems and finding the solutions. But no such system in human resource is fully secure or reliable because we deal with human beings and issues surrounding their day to day work life which are uncertain and un-predictable. Accidents, sickness, diseases, deaths and other such unfortunate events are integral part of human life and need to be looked at from a very different perspective" Biman spoke slowly to ensure that Jai understands the basic issues. 'What is that different perspective, sir" Jai was curious to know. "Let's have a cup of tea and relax a while before I explain to you about that different perspective" Jai called up his secretary to order tea and snacks ...

1. DIFFERENT PERSPECTIVE: HUMAN DEVELOPMENT RESOURCING (HDR): "The new perspective is 'HDR' meaning Human Development Resourcing. We need to move from Human Resource Development (HRD) to Human Development Resourcing (HDR). This needs a paradigm shift in our approach to resolve problems and issues faced by our human resource whom we claim our 'tangible assets" Biman continued, " the problems you faced in the health care recently cannot be resolved just by admitting the sick employees in the hospitals and then wait to see who survives and who does not. It is not only the cure or the prevention of a disease; it is all about a bigger question "can we give our employees a disease free quality life which they deserve as human beings? Human Development Resorcing comes to our aid in managing these and such other human concerns, not only at organisational and/or national level but also globally".

2. DIFFERENCE BETWEEN HUMAN RESOURCE DEVELOPMENT (HRD) AND HUMAN DEVELOPMENT RESOURCING (HDR): 1. In Human Resource Development (HRD), we select our human resource and decide what assistance they need from us to help them to change their vision, sharpen their competencies and skills and multi-skilling, performance management, human relations, leadership effects and their other abilities and capabilities. 2. In Human Development Resourcing (HDR), we first think of identifying, building and securing resource for sustained development of human beings (human resource or human capital) such as financial, economic, social, mental, psychological, spiritual and physical resource for overall sustainable human development. The development areas include health, nutrition, education, counselling, population control, enrichment and quality of life and empowerment of women across the organization.

-

Human Resource Planning and AudIt

One of the most common misconceptions is to treat human development resourcing as being synonymous with human capital and human resource development. 3. Human capital is a term coined by Schultz in 1960s which refer to the stock of skills and

productive knowledge embodied in people. Just as physical, capital (machines, equipment, assets and so on) make a contribution to the national income, Schultz argued that individuals, through the human capital embodied in them, also make a contribution to national income. Thus, human capital and the human resource development framework that is based on the return on investment, consider human beings mainly as a means to the end which contributes to higher national income. The investment made in people in terms of education, health, nutrition is justified in terms of the 'rate of return' it yields to the individual and the organisation as well as to the family and society.

4. The Human Development Resourcing paradigm regards people as ends in themselves, and not as means to an end. Human Development Resourcing (HDR) includes human, social, environmental and economic development. 3. SIX SEGMENTS OF HUMAN DEVELOPMENT RESOURCING (HDR)

There are six basic segments of human development resourcing: 1. HUMAN DEVELOPMENT: SEGMENT ONE

The concept of human development was introduced by Dr Mahbub-ul-Haq. Dr. Haq describes the concept of human development resourcing enlarges people's choices and improves their lives. People are central to all development under this concept. These choices are not fixed but keep on changing. The basic goal of development is to create conditions where people can live meaningful lives. A meaningful life is not just a long one. It must be a life with some purpose. This means that people must be healthy, be able to develop their talents, participate in society and be free to achieve their goals. Dr Mahbub-ul-Haq created the Human Development Index in 1990. According to him, development

is all about enlarging people's choices in order to lead a long, healthy lives with dignity. The United Nations Development Programme has used his concept of human development to publish the Human Development Report annually since 1990. Dr Mahbub-ul-Haq and Prof Amartya Sen were close friends and have worked together under the leadership of Dr Haq to bring out the initial Human Development Reports. Both these South Asian economists have been able to provide an alternative view of development. Nobel Laureate Prof Amartya Sen saw an increase in freedom (or decrease in unfreedom) as

the main objective of human development. Interestingly, increasing freedoms is also one of the most effective ways of bringing about development. His work exploms the role of social and political institutions and processes in increasing freedom. According to Dr. Haq, leading a long and healthy life, being able to gain knowledge and having enough means to be able to live a decent life are the most important aspects of human development. Therefore, access to resource, health and education are the key areas in human development. Suitable indicators have been developed to measure each of these aspects. Very often, people do not have the capability and freedom to make even basic choices. This may be due to their inability to acquire knowledge, their material poverty, social discrimination, inefficiency of institutions and other reasons. This prevents them from leading healthy lives, being able to get educated or to have the means to live a decent life.

The Great Human Resource Turnaround

-

Building people's capabilities in the areas of health, education and access to resource is therefore, important in enlarging their choices. If people do not have capabilities in these areas, their choices also get limited. For example, an uneducated child cannot make the choice to be a doctor because her choice has got limited by her lack of education. Similarly, very often poor people cannot choose to take medical treatment for disease because their choice is limited by their lack of resource.

2.

MEASURING HUMAN DEVELOPMENT: SEGMENT TWO:

The human development index (HDI) ranks the countries based on their performance in the key areas of health, education and access to resource. These rankings are based on a score between o to 1 that a country earns from its record in the key areas of human development. The indicator chosen to assess health is the life expectancy at birth. A higher life expectancy means that people have a greater chance of living longer and healthier lives. The adult literacy rate and the gross enrolment ratio represent access to knowledge. The number of adults who are able to read and write and the number of children enrolled in schools show how easy or difficult it is to access knowledge in a particular country. Access to resource is measured in terms of purchasing power. Each of these dimensions is given a weightage of 1/3. The human development index is a sum total of the weights assigned to all these dimensions. The closer a score is to one, the greater is the level of human development. Therefore, a score of 0.983 would be considered very high while 0.268 would mean a very low level of human development. The human development index measures attainments in human development. It reflects what has been achieved in the key areas of human development. Yet it is not the most reliable measure. This is because it does not say anything about the distribution. The human poverty index is related to the human development index. This index measures the shortfall in human development. It is a non-income measure. The probability of not surviving till the age of 40, the adult illiteracy rate, the number of people who do not have access to clean water, and the number of small children who are underweight are all taken into account to show the shortfall in human development in any region. Often the human poverty index is more revealing than the human development index. Looking at both these measures of human development together gives an accurate picture of the human development situation at organizational and/or national level. The ways to measure human development are constantly being refined and newer ways of capturing different elements of human development are being researched. 3. RESOURCING: SEGMENT THREE:

In human resource development, we first think of areas of development where people need assistance from an organization such as developing leadership or communication skills and competencies. In human development resourcing, we identify the potential areas which can support us in pooling financial and monetary, physical and spiritual and mental and psychological resource to aid our human development programmes. The participation, in pooling the resource for implementing the pre-determined and identified human development programmes, is sought from various quarters:

&I

Human Resource Planning and AudIt

1. Organizational funding by monetary and physical resource which is popularly known as 'corporate social responsibility'. 2. Governmental funding in private-public participation. 3. Non-Government Organizations (NGOs) 4. Philanthropic Trusts and Organizations. 5. Sewa Mandals and Non-Religious Organizations. 6. Educational Institutions and Trusts. 7. Non-Profit Organizations. 8. Community development Institutions and Associations. 9 .. Environmental Management Institutions. 4. CORPORATE SOCIAL RESPONSIBILITY (CSR): SEGMENT FOUR:

The role of corporates by and large has been understood in terms of a commercial business paradigm of thinking that focusses purely on economic parameters of success. As corporates have been regarded as institutions that cater to the market demand by providing products and services, and have the onus for creating wealth and jobs, their market position has traditionally been a function of financial performance and profitability. However, over the past few years, as a consequence of rising globalisation and pressing ecological issues, the perception of the role of corporates in the broader societal context within which it operates, has been altered. Stakeholders (employees, community, suppliers and shareholders) today are redefining the role of corporates taking into account the corporates' broader resl.:onsibility. towards society and environment, beyond economic performance, and are evaluating whether they are conducting their role in an ethical and socially responsible manner. As a result of this shift, Corporate Social Responsibility (from purely economic to 'economic with an added social dimension'), has become one of the most important segments of Human Development Resourcing.

MODELS OF CORPORATE SOCIAL RESPONSIBILITY: 1. ETHICAL MODEL (1930 -1950): One significant aspect of this model is the promotion of ''trusteeship'' that was revived and reinterpreted by Gandhiji. Under this notion the businesses were motivated to manage their business entity as a trust held in the interest of the community. The idea prompted many family run businesses to contribute towards socio-economic development. 2. STATIST MODEL (1950 -1970): Under the aegis of Jawahar Lal Nehru, this model came into being in the post Independence era. The era was driven by a mixed and socialist kind of economy. The important feature of this model was that the state ownership and legal requirements decided the corporate responsibilities. 3. LIBERAL MODEL (1970 -1990): The model was encapsulated by Milton Friedman. As per this model, corporate responsibility is confined to its economic bottom line. This implies that it is sufficient for business to obey the law and generate wealth, which through taxation and private charitable choices can be directed to social ends. 4. STAKEHOLDER MODEL (1990 - PRESENT): The model came into existence during 1990s as a consequence of realisation that with growing economic profits, businesses also have certain societal roles to fulfil. The model expects companies to perform according to ''triple bottom line"

The Great Human Resource Turnaround

.

.

;'

_... ....... ....... .l1

approach. The businesses are also focussing on accountability and transparency through several mechanisms. societal roles to fulfil. 5. CAPABILITY MODEL: This approach is associated with Prof. Amartya Sen. Building human capabilities in the areas of health, education and access to resource is the key to increasing human development.

DEFINING CORPORATE SOCIAL RESPONSIBILITY: 1. Philip Kotter and Nancy Lee (2005) define Corporate social responsibility as "a commitment to improve community well-being through discretionary business practices and contributions of corporate resource" whereas, Mallen Baker refers to Corporate social responsibility as "a way companies manage the business processes to produce an overall positive impact on society". 2. According to World Business Council for Sustainable Development "Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large". 3. Archie Carroll describes Corporate social responsibility as a multi layered concept that can be differentiated into four interrelated aspects - economic, legal, ethical and philanthropic responsibilities. Carroll presents these different responsibilities as consecutive layers within a pyramid, as such that ''true'' social responsibility requires the meeting of all four levels consecutively. The model probably is the most accepted and established .

SIMPLY SPEAKING ... While the definitions of corporate social responsibility may differ, there is an emerging consensus on some common principles that underline corporate social responsibility. 1. Corporate social responsibility is a business imperative: Whether pursued as a voluntary corporate initiative or for legal compliance reasons, corporate social responsibility will achieve its intended objectives only if businesses truly believe that corporate social responsibility is beneficial to them. 2. Corporate social responsibility is a link to sustainable development: Businesses feel that there is a need to integrate social, economic and environmental impact in their operation.

Human Resource Planning and Audit

3. Corporate social responsibility is a way to manage business: Corporate social responsibility is not an optional add on to business, but it is about the way in which businesses are managed. 5. THE FOUR PILLARS OF HUMAN DEVELOPMENT RESOURCING: SEGMENT FIVE: Just as any building is supported by pillars, the idea of human development resourcing is supported by the concepts of equity, sustainability, productivity and empowerment. 1. Equity: refers to making equal access to opportunities available to everybody. The opportunities available to people must be equal irrespective of their gender, race, income and caste. For example, in any country, it is interesting to see which group the most of the school dropouts belong to. This should then lead to an understanding of the reasons for such behaviour. In India, a large number of women and persons belonging to socially and economically backward groups drop out of school. This shows how the choices of these groups get limited by not having access to knowledge. 2. Sustainability: means continuity in the availability of opportunities. To have sustainable human development, each generation must have the same opportunities. All environmental, financial and human resource must be used keeping in mind the future. Misuse of any of these resource will lead to fewer opportunities for future generations. A good example is about the importance of sending girls to school. If a community does not stress the importance of sending its girl children to school, many opportunities will be lost to these young women when they grow up. Their career choices will be severely curtailed and this would affect other aspects of their lives. So each generation must ensure the availability of choices and opportunities to its future generations. 3. Productivity: means human labour productivity or productivity in terms of human work. Such productivity must be constantly enriched by building capabilities in people. Ultimately, it is people who are the real wealth of nations. Therefore, efforts to increase their knowledge, or provide better health facilities ultimately leads to better work efficiency. 4. Empowerment: means the power to make choices. Such power comes from increasing freedom and capability. Good governance and people-oriented policies are required to empower people. The empowerment of socially and economically disadv~ntaged groups is of special importance. 6. SUSTAINBILITY REPORTING: SEGMENT SIX: Sustainability Reporting (SR) is also gaining prominence and recognition as a value added tool for displaying a corporate's commitment towards transparency and accountability towards its stakeholders. It helps a company to report on the social, environmental and economic impact of its activities, along with a report on the internal state of its management and employee welfare system in a manner as rigorous and transparent as financial reporting. A well-drafted sustainability report provides a balanced and reasonable representation of the sustainability performance of a reporting organisation (both positive and negative). It helps the organizations to define and communicate their overall context and rationale to solve global problems through its specific business model or elicit whether its business model design is influenced by those problems. It is also increasingly recognised as a tool for brand and image building.

The Great Human Resource Turnaround

WHY CORPORATE SOCIAL RESPONSIBILITY (CSR) CANNOT SUBSTITUTE HUMAN DEVELOPMENT RESOURCING (HDR)? Whatever may be the model of corporate social responsibility currently doing the rounds of the Indian or the Fortune 500 companies, we cannot deny certain facts that: 1. Corporate social responsibility is business driven. 2. Since the business houses invest the money, time and the efforts in initiating the development projects under corporate social responsibility, they expect a definite return on their investments. 3. Businesses decide the modus operandi of the corporate social responsibility initiatives. 4. Stakeholders are not involved from the onset in defining an initiative to make it successful on the assumption they do not understand the needs of a community. 5. Corporate social responsibility initiatives are, by and large, image building exercises for the corporates. 6. Corporate social responsibility is interchangable with corporate sponsorship, donation or other philanthropic activities.

HUMAN DEVELOPMENT RESOURCING: RATIONALE: 1. Human Development Resourcing (HDR) as an Objective: Viewed as an end in itself rather than a means, human development resourcing is about enriching human lives. Material enrichment - producing a larger volume of goods and services - may contribute to this but it is not the same thing. Indeed it is by now widely understood that there is no one-to-one correspondence between material enrichment (measured, say, by gross national product per head) and the enrichment of human lives (measured, say, by the human development index). The human development approach thus, implies the dethronement of national product as the primary indicator of the level of development. The objective of development is not to produce more "stuff", more goods and services, but rather to increase the capabilities of people to lead full, productive, and satisfying life. A larger volume of output per head of the population may ofcourse increase the capabilities of people, and thus, should be warmly welcomed, but increased output should be seen for what it is, namely, an intermediate product that under appropriate circumstances can enhance human wellbeing. Ultimately what is of concern is the ability of people to lead a long life (as measured by life expectancy at birth), to enjoy good health (as measured by morbidity rates), to have access to the stock of accumulated knowledge (as approximated by enrolment and literacy rates), to have sufficient income to buy food, clothing and shelter, to participate in the decisions that directly affect their lives and their community. In formulating development policies, programmes and plans it is important to put people first, to specify objectives in terms of the enhancement of human capabilities. 2. Human Development Resourcing (HDR) as a Means: The economic benefits received by people - whether in the form of money income, material goods and services received in kind, self-produced items of consumption or production, or capabilities such as a long life and good health which may be only partially mediated by relations of production and exchange - can be understood as flows originating from the stock of capital. The stock of capital, in turn, can be divided into three components: 1. the stock of natural capital, 2. the stock of man-made physical capital, and 3. the stock of human capital.

Human Resource Plannmg and Audlf

The stock of natural capital consists of the natural resource of the globe, including the atmosphere and oceans, the flora and fauna, the soils and mineral deposits and sources of fresh water. The stock of physical capital consists of the produced means of production, i.e., the plant and equipment used in the agricultural, industrial and service sectors, the physical infrastructure (roads, bridges, ports, pipelines, railways, airports, irrigation canals) and the stock of dwellings. The stock of human capital consists of the knowledge, skills, experience, energy and inventiveness of people. It is acquired in a variety of ways: through training and apprenticeship programmes, while on the job through learning by doing, in the formal education system, through informal contacts by word of mouth, through newspapers, radio and the information media generally, in institutions devoted to pure and applied research and through private study and reflection. A distinctive feature of a human development resourcing is the emphasis placed on human capital formation. This does not mean that additions to the stocks of natural and physical capital are ignored - that would be a serious error - but it does mean a major change in priorities in favour of human capital. The justification for this change in priorities is, first, that the returns on investing in people are in general as high as if not higher than the returns to other forms of investment, second, that investment in human capital in some cases economises on the use of physical capital and the exploitation of natural resource and, third, the benefits of investing in people are in general more evenly spread than the benefits from other forms of investment. Thus, a greater emphasis on human capital formation should result in as fast and perhaps even a faster pace of development, more sustainable development and a more equitable distribution of the benefits of development. Thus, a human development resourcing has numerous advantages. First, it contributes directly to the well-being of people. Second, it builds from a foundation of equality of opportunity. Third, it helps to create a more equal distribution of the benefits of development. Fourth, it enables the linkages between the various types of investment in people to be fully exploited and, fifth, it takes advantage of the complementarities between human and physical capital. 3. Human Development Resourcing (HDR) as a means for Sustainable Development: Sustainable development is a pattern of resource use that aims to meet human needs while preserving the environment so that, these needs can be met not only in the present, but also for future generations. The term was used by the Brundtland Commission which coined what has become the most often-quoted definition of sustainable development as development that "meets the needs of the present without compromising the ability of future generations to meet their own needs."

Sustainable development ties together concern for the carrying capacity of natural systems with the social challenges facing humanity. As early as the 1970s "sustainability" was employed to describe an economy "in equilibrium with basic ecological support systems." Ecologists have pointed to the "limits of growth" and presented the alternative of a "steady state economy" in order to address environmental concerns. The field of sustainable development can be conceptually broken into three constituent parts: environmental sustainability, economic sustainability and socio-political sustainability.

The Great Human Resource Turnaround

-

;,

.........

4. Human Development Resourcing (HDR) as a means for Participatory Development: In the final analysis human development resourcing cannot be separated from participatory development. The goal of human development is to help people realise their own potential, to develop their intellectual, technical and organizational capabilities. Thus, human development inescapably is development by the people if it is to be development for the people. 5. Corporate Social Responsibility to move from Image Building Model to Sustainable Human Development Resourcing Model: 1. A study conducted by KPMG India on "Corporate Social Responsibility: Towards a Sustainable Future" observed that action in corporate social responsibility in India largely spans a diverse set of thematic areas - health, education, livelihood, poverty alleviation, environment, water, housing, energy and microfinance. However, some other areas like women empowerment, child development and infrastructure also appeared in the case studies. 2. Based on the comparative study of the 24 companies, it was found that while some companies chose to narrow their focus on a few thematic areas, others took a broader view and undertook a larger scope of areas to focus on. Out of 24 case studies that were analysed, it was found that there were as many as 16 corporates focussing on 3-5 thematic areas and remaining eight stuck to six or more thematic areas. In terms of the area focus, environment garnered the maximum attention from corporates while women empowerment and poverty alleviation were neglected areas with minimal corporates focusing on the same. 3. It was observed that for 37 percent corporates, the Corporate social responsibility initiative is being implemented through a well-structured separated Foundation. Among 58 percent corporates there is a separate corporate social responsibility department that takes care of the activities to be implemented. 4. The importance of building strong public-private partnerships as well as working closely with NGOs as implementation partners is being increasingly realised by corporates. It has been observed that 58 percent of the corporates within the surveyed sample partnered with the government departments. The number is higher for the engagement with NGOs, where approximately 67 percent corporates have formed linkages. Twenty-one percent corporates were working in partnership with multilateral or bilateral organisations. 5. Stakeholder engagement has become one of the important aspects of corporate social responsibility practices, though, there are different sets of stakeholders that can be taken into account while implementing corporate social responsibility.

-

Human Resource Plannmg and AudIt

The World Business Council for Sustainable Human Development has noted that a coherent corporate social responsibility strategy based on integrity, sound values and a long-term approach offers clear business benefits to companies and contributes to the well-being of society. As companies move forward to design a corporate social responsibility strategy that provides the intended leverage point as intended, key success factors for it to move to a state of sustainable human development resourcing are: • Focusing on priorities. • Allocating finance for treating corporate social responsibility as an investment from which returns are expected. • Optimising available and expected resource by ensuring that efforts are not duplicated and existing services are strengthened and supplemented. • Monitoring activities and liaising closely with implementation partners such as NGOs to ensure that initiatives really deliver the desired outcomes through participative development. • Reporting performance in an open and transparent way so that, all can celebrate progress and identify areas for further action.

CASE

STUDI~S

IN HUMAN DEVELOPMENT RESOURCING:

1. AMBUJA CEMENTS LIMITED: Thematic Areas: Poverty Reduction, Reducing Child Mortality, HIV/AIDS, Education and Environment Case Study:

Ambuja Cements Ltd. established a foundation, called the Ambuja Cement Foundation in 1993. With its cement plants being situated in the rural areas, the company realised the need to address the needs of the rural people. These people formed direct or indirect stakeholders of the Company and therefore were important for the company's sustainability. Consequently, the ACF's focus has been on integrated rural development programmes. The Foundation works with the mission to "energise, involve and enable communities to realise their potential". It upholds as its guiding light the parent company's core values and alongside pays due attention to international trends in social development, expressed through guidelines like the millennium developmental goals, poverty alleviation, achieving universal primary education, reducing child mortality, improving maternal health, combating HIV/AIDS and ensuring environmental sustainability is all integral to the work of the company and its Foundation. The Foundation in each location begins by working at the micro level in a small way with the villages impacted by the company's operations and gradually over time as partnerships develop expands its"area and scope of work. The Foundation at present reaches out to over 1.2 million people in about 670 villages spread across ten states in India. The large chunk of work of the Foundation is carried out by a team of well-trained and experienced professionals.

The Great Human Resource Turnaround

2. APOLLO TYRES LIMITED: Thematic Areas: Health Case Study: HIV-AIDS Programme in Apollo Tyres Ltd. Background: Apollo started its fight against HIV-AIDS in a project called Healthy Highways. The project was in partnership with DFID and started in Sanjay Gandhi Transport Nagar in the year 2000.Today Apollo has a comprehensive programme on HIV-AIDS focussing on its employees, customers and supply chain. The programme focus is on building awareness and prevention aspect of the epidemic. The approach is to forge strategic tie-ups with organisations, which bring the technical skills and capacity building aspects into the partnership. Apollo Tyres Health Care Centres: Apollo Tyres Health Care Centres are targeted interventions for truckers. The location for clinics is identified on the HIV prevalence, density of trucking and mobile population and the current level of work being done by other organisations in the area. Currently, the company has 7 clinics running in North, West and South of India. All clinics are strategically located in transport nagars. They are positioned as general health clinics to avoid stigma attached to HIV-AIDS, however the focus of the services provided is on HIV-AIDS. The main components of the programme are: (A) Behaviour Change Communication (BCC): The communication is directed at increasing awareness regarding the basics of HIVIAIDS. The communication addresses the modes of transmission, myths regarding HIV, connection between sexually transmitted diseases and HIV through one-to-one and one-to-group interactions. (B) Peer Educators: Building an effective peer educator network is the most important link of the entire programme. The peer educators become imperative given the geographical spread of the transport nagars and the mobile nature of the population. (C) Condom Promotion: Condom promotion takes place through free distribution as well as social marketing of condoms. These condoms are available at various outlets and strategic pOints within the transport nagars. Also the out reach workers and the peer educators emphsise and educate the target audience on the correct usage and disposal of condoms. 3. BHARAT PETROLEUM CORPORATION LIMITED: Thematic Areas: Health, Education, Infrastructure, Income Generation, Vocational Guidance, Livelihood and Environment and Conservation. Case Study: Community Development at village 'Ramthenga', Jajpur Dist, Orissa. Objectives of the Project: • To help the village become socially conscious . • To improve the general health of the villagers.

III·:

Human Resource Plannmg and Audit

• To improve community participation. • To help them become self-reliant. This village is dominated by the tribal population - 'Santhal Tribe'. Their socio-economic status was highly impoverished. Most of the villagers worked in the neighbouring mines. Due to prolonged and non-conducive working environment, they had developed severe respiratory/skin infections. The children did not attend any school and the nutrition status of the children was very poor. There was also a severe problem of alcohol abuse amongst the men. The women were suppressed and worked in the farm as well as in the mines. Lack of availability of water was also one of the main concerns of the villagers. There were bore wells but they were non-functional. Major interventions were required in the area were: • Health. • Education. • Awareness about health/ sanitation/ hazards of working in the mines. • Precautions to prevent respiratory illness. • Making water available. Having understood the need of the community, BPCL constituted a team to implement the work in the community. The main participants in the project were: • Villagers • NGO partner - Research Analysis Consultants • BPCL LPG team based in Bhuvaneshwar and Khurda headed by TM Khurda • BPCL Human Resource Team at Kolkatta headed by Human Resource Chief and corporate social responsibility co-ordinator. • BPCL Corporate Social Responsibility Team headed by GM (Admin). 4. MAHIN ORA GROUP OF COMPANIES: Corporate Social Responsibility in human develpment resourcing has always been an integral part of the Mahindra Group's vision and the cornerstone of Core Value of Good Corporate Citizenship. The Mahindra Group defines corporate social responsibility as making socially responsible products, engaging in socially responsible employee relations and making a commitment to the community around it. At the Mahindra Group, corporate social responsibility is not just a duty; it's a way of life. In 2005, the Group celebrated its 60th anniversary by renewing its commitment to Corporate social responsibility. It pledged to dedicate 1% of its profit (after tax), on a continuous basis towards Corporate Social Responsibility. A unique kind of ESOPs - Employee Social Options were launched to enable Mahindra employees to involve themselves in socially responsible activities of their choice. The Group also announced a special gift: to provide free cochlear implants to 60 profoundly hearing-impaired, under-privileged children. In addition to giving impetus to the Nanhi Kali project for the girl child and the Mahindra All India Talent Scholarship for the economically disadvantaged, the Mahindra Group is planning to set up two Mahindra Pride Schools. These schools will offer a variety of courses, with an emphasis on employability, including training for Information Technology, Retail, and Automotive Engineering etc. They will provide new skills and capabilities to

The Great Human Resource Turnaround

the weaker sections of society, particularly the scheduled castes and scheduled tribe youth. While these projects are already underway, plans for more social initiatives are on the anvil.

5. MOSER BAER: Corporate Social Responsibility Policy:

At Moser Saer, we believe that Corporate Social Responsibility is the way to conduct business that achieves a balance or integration of economic, environmental and social imperatives while at the same time addressing stakeholder expectations. Under its corporate social responsibility policy, the company affirms its commitment of seamless integration of marketplace, workplace, and environment and community concerns with business operations. Moser Saer uses corporate social responsibility as an integral business process in order to support sustainable development and constantly endeavors to be a good corporate citizen and enhance its performance on the triple bottom line. Corporate Social Responsibility Mission:

Whilst being committed to excellence and total customer satisfaction through team work, ceaseless innovation and timely delivery of quality products of international standards, we recognize our responsibilities towards social and environmental dimensions of our business and thus, aim to visibly playa leading role within our spheres of influence. We will strive to be a leader while continuing our business in a socially and environmentally responsible manner. We affirm our commitment to contribute to nation building measures through improving quality of life of our workforce, their families and the communities of the area we exist and beyond. The Structure:

1. Community Development vehicle, Moser Saer Trust is headed by Corporate Social Responsibility Head of Moser Saer. 2. Trustees are senior leaders from the company. 3. Functional scorecard and KRAs align initiatives with company's strategic objectives. 4. Regular board level reporting to Corporate Social Responsibility Committee. 5. Programmes evolved after stakeholder dialogue and have independent budget, action plans and targets. 6. Community programmes designed to meet Millennium Development Goals (MDGs) in MSIL's sphere of operations as contribution to nation building. 6. INFOSYS TECHNOLOGIES: Corporate Social Responsibility:

At Infosys, the distribution of wealth is as important as its legal and ethical creation. A strong sense of social responsibility is therefore, an integral part of our value system. Infosys Foundation:

We are committed to contributing to the society and established Infosys Foundation in 1996 as a not-for-profit trust to support our social initiatives. The Foundation supports programmes and organizations devoted to the cause of the destitute, the rural poor, the mentally challenged, and the economically disadvantaged sections of the society.

_r

.,.

Human Resource Planning and Audit

The Foundation also helps preserve certain cultural forms and dying arts of India. Grants to the Foundation aggregated Rs. 19 crore during the fiscal year 2007, as compared to Rs. 13 crore in the previous year.

Community Service: Through the 'Computers Classrooms' initiative launched in January 1999, Infosys donated 2,567 computers to various institutions across India. Additionally, they have applied to the relevant authorities for permission to donate computers to educational institutions on an ongoing basis in the future. Microsoft Corporation continues to participate in this initiative by donating relevant software.

Social Commitment in Education: Infosy's Education & Research group has the pride of anchoring the Infosys Extension Programme (IEP), which consists of the Infosys Fellowship Programme, Rural Reach Programme, Catch Them Young and Train the Trainer.

SIMPLY SPEAKING ... Leading a long and healthy life, being able to gain knowledge and having enough means to be able to live a decent life are the most important aspects of human development resourcing.

~

r---------

. •.•••••.••.••.. . .

~:!!:__ J

r------, Unions I

I

-------..1

The figure shows the beneficiaries in the Participative Model of Human Development Resorucing

Therefore, access to resource, health and education are the key areas in human development resourcing. Suitable indicators have been developed to measure each of these aspects. Very often, people do not have the capability and freedom to make even basic choices. This may be due to their inability to acquire knowledge, their material poverty, social discrimination, inefficiency of institutions and other reasons. This prevents them from leading healthy lives, being able to get educated or to have the means to live a decent life.

The Great Human Resource Turnaround

••

Just as any building is supported by pillars, the idea of human development resourcing is supported by the concepts of equity, sustainability, productivity and empowerment. Corporate Social Responsibility has to move from image building exercise to a more meaningful concept of Sustainable Human Development Resourcing to maximise the gains of participative management and implementation of Human Development Resourcing.

EXERCISE FOR PRACTICE 1. Define the concept Turnaround'. What is Human Resource Turnaround? Explain in details with examples . 2. What is the meaning of 'Holistic Approach' to Human Resource Management? 3. Why do we need Human Resource Turnaround? What are the various compulsions for seeking Human Resource Turnaround? 4. Why are Human Resource professionals not business driven? What are their compulsions? Explain in details citing the excerpts from the case study of 'Geeta Kapur & Man ish Puri '. 5. What went wrong between Geeta Kapur and Manish Puri? Do you think Geeta Kapur did not possess adequate Human Resource skills and competencies to handle Manish Puri? Who comes across as the winner in the end? Cite excerpts from the case study in support of your answer. 6. If you are 'Geeta Kapur', how would you handle Manish Puri? Re-wtite your conversation with Manish PurL 7. Why is Human Resource at crossroads? Have the Human Resource People lost their art of diagnosis in handling and managing people? 8. Why is Human Resource function generally taken for granted? Why do people feel that "there is nothing great in Human Resource" and "anyone from top to bottom in the hierarchy can manage Human Resource "? 9. What is the meaning of Global Human Resource Management? Do, as human resource processionals, we need "Global Human Resource Competency? Are we ready for this compet itive advantage? 10. Why did Simranjeet Singh, Chairman and Managing Director of Perfumes & Petals India Limited involve VP-Human Resource Ritu Sanyal in merger and acquisition second deal? Why Ritu Sanyal succeeded in finalising the deal? How the company benefited by involvement of Ritu Sanyal? 11 . What approach was adopted by Ritu Sanyal in dealing with second merger and acquisition deal? 12. "Pick good people and set the right priorities". In what context did Lee lacocca make this statement? 13. Explain the concept of "'Get, Keep, Grow". Who is the originator of this concept and in what context did he make this statement? 14. How did Dabur India achieve painless restructuring? What were the benefits of the organizational restructuring? 15. Do you agree that Human Resource needs transformation of image to be business driven, if Human Resource Strategic planning has to succeed? 16. What are the various paradigm shifts for Human Resource professionals? Explain in details. 17. Write your plan of action the way you would like to transform your Human Resource department to profit centre or strategic business unit (SBU). 18: What is globalisation? Do you think that Human Resource is really going global because everyone talks about global Human Resource competencies? Explain it with examples.

BASICS OF HUMAN RESOURCE PLANNING

_ _ _ _ _=t Learning Objectives

following

'.

CHAPTER TWO BASICS OF HUMAN RESOURCE PLANNING: LEVEL ONE

PHILOSOPHY OF HUMAN RESOURCE

LEVEL TWO:

IMPORTANCE - DEFINITIONS - NEEDS - OBJECTIVES - SCOPE 46 - 52 AND BENEFITS OF HUMAN RESOURCE PLANNING

LEVEL THREE:

THE FACTORS AFFECTING HUMAN RESOURCE PLANNING

53 - 54

LEVEL FOUR:

HUMAN RESOURCE PLANNING TOOLS

55 - 57

PLANNING

42 - 45

LEVEL ONE

PHILOSOPHY OF HUMAN RESOURCE PLANNING 1.

HUMAN RESOURCE PERCEPTIONS ARE IMPORTANT BUT IT IS NECESSARY TO ALIGN THESE WITH THE CORPORATE GOALS AND STRATEGIC MANAGEMENT:

"Human Resource is like carpentering ", Suresh Oberoi, Senior General Manager-Human Resource of Alternate Energy Group of Companies told Vi nay Malhotra."You are absolutely correct, Suresh. We are not using any functional expertise in this recruitment drive; our role here is similar to that of a ... " added Vinay with sarcasm. Vinay is the Vice-President - Human resource with Navjivan Pharma since 5 years. "I agree with both of you. Human Resource is always treated as a stepchild by the top management, they don't take us seriously and the middle and the junior management staff don't confide in us" said Amrish Punewalla, a senior Vice-President-Human resource with 0 K Constructions Limited. "You are right to an extent but things are changing. The corporate world has started building Human Resource as the core function to take care and control human assets without whom the organization cannot grow and generate revenue" said Nirmoy Oasgupta, Vice-President - Human resource with Bollywood Software Technologies "I am sure that all of us shall observe a vast change in the attitude of Corporate India accepting Human resource as a mainstream function rather than a mere back office department in the next couple of years" he added further. Four senior Human resource professionals, four interesting perspective and in four different contexts. Perceptions help in building values for Human Resource Planning Philosophy.

2.

MAKING IT HAPPEN:

.

What is the basic "philosophy" that underlines the domain of Human Resources and Human Resource Planning? Is it a clearly defined and commonly accepted philosophy? If not, can we derive some sort of 'emergent philosophy' from the way the craft of Human Resource is practiced? How has this philosophy been evolving?

3.

ONLY TEN PERCENT MANAGERS ARE COMMITTED: BRUCH AND SUMANTRA GHOSHAL:

Heike Bruch and Sumantra Ghoshal explains this admirably in a Harvard Business Review article (February 2002) which places managers in four compartments, depending on the 'focus' and the 'energy' they bring to their tasks. The manager with high focus and low energy is described as 'disengaged' whose lack of commitment means loss of effectiveness. The manager with low focus and low energy is a 'procrastinator', who puts off until tomorrow what should be done today - and tomorrow, all too often, never comes. The high-energy, low-focus type is 'distracted'. This is the manager who throws himself into Pareto's 80% of time-wasters. But Bruch and Ghoshal's research has a painful message. These three ineffective types are in an overwhelming majority: they account for 90% of all the managers studied. That leaves a tiny tenth of the managerial workforce whose high energy and focus make them 'purposeful' people, who are committed activists - 'making it happen'.

Basics of Human Resource Planning

4. REVENUE, COST & QUALITY: ONE SONG ONE DESTINATION:

-

In the final analysis, management comes down to three simple words: REVENUES, COSTS, QUALITY. The purpose of any manager must surely include raising revenues, reducing costs per unit of output, and notably improving the quality of internal processes and external perceptions. Get these three right, and much else will fall neatly into place. The RCO formula is essentially simple, but it does involve asking some penetrating questions and getting answers which imply and demand action: 1. Do you have a business plan to raise revenues, reduce costs and improve quality? YES/NO. If not, do you want one? YES/NO 2. Do you know why your customers choose to buy from you, rather than from anybody else? YES/NO. If not, would you like to? YES/NO 3. Do you know what percentage of the customers you had a year ago still buy from you today? YES/NO. If not, would you like to? YES/NO 4. Do you have plans to enter new markets, either in new regions or new product lines? YES/NO. If not, do you want to? YES/NO. 5. Do you know whether your profit margins are rising, static or falling? YES/NO. If yes, do you have plans to increase them? YES/NO. 6. Do you know how your costs compare with best practice by competitors and others? YES/NO. If not, would you like to? YES/NO 7. Do you know which 20% of activities account for 80% of your direct costs? YES/NO. If yes, do you concentrate on making them lower? YES/NO. 8. Do you know how many of your customers regard your goods and/or services as good or excellent? YES/NO if not, would you like to? YES/NO. 9. Do you know which of your critical processes could be speeded up and made more costeffective? YES/NO. If not, would you like to? YES/NO. 10. Do you plan to introduce new or radically improved goods/services over the next year? YES/ NO. If not, do you want to? YES/NO With this knowledge, you can plan your activities so that the balance shifts decisively towards the purposes to which you are now committed. Again, there are four simple questions, adapted from a well-known Peter Drucker catechism: 1. What is my purpose? 2. What am I doing to achieve that purpose that can only be done by me? 3. What am I doing that can be done by others? 4. What am I doing that need not be done at all? You obviously delegate (3), scrap (4) and concentrate on (2). That will accomplish less than you need, however, unless you can also fully identify your delegates and other colleagues with your purpose.

III 5.

Human Resource Planning and Audit

POWER OF CHALLENGE AND CHOICE: THE CASE OF LUFTHANSA AIRLINES TURNAROUND:

Bruch and Ghoshal emphasise the power of 'challenge and choice' in achieving this outcome. Lufthansa is their case in point. The airline was heading for a financial crash in 1992. The CEO called in 20 senior managers, admitted that he had no solution, and gave them three days to develop ways to save Lufthansa. If they determined that it could not be saved, then he would accept bankruptcy. Once initial shock had been absorbed, the managers quickly formed ambitious purposes, adopted 130 proposals for radical change (of which 70% were enacted), and turned Lufthansa round from loss to profit.

6.

CONGRUENCE OF STATED & ACTUAL VALUES:

We also have to be mindful of the possible conflict between the stated Human Resource Planning philosophy in an organization and the 'actual' Human Resource philosophy practiced in the organization. What really matters is the Human Resource Planning philosophy (basic assumptions about HRP) that emerges can be inferred from (or gets reflected in) in the decisions made by the organization. It will be both tragic and comic situation if an organization says that 'people are our greatest assets/people are our main source of competitive advantage' and at the same time practices 'downsizing' and/or 'cutting employee benefits and training' as the first response (instinctive response) to any business downturn. There is no better way to create mistrust and cynicism in the organization. The same holds good at the level of managers also. Managers represent/symbolize the 'organization' to the employees and the real 'Human Resource Planning philosophy' of the organization (as perceived by the employees) is the one that gets reflected in the behaviours of (or in decisions made by) the managers. Though, we can't over emphasize the need for congruence between the 'articulated Human Resource Planning philosophy' and the 'Human Resource Planning philosophy in practice' but it cannot be ignored.

7.

EFFECTIVE MANAGEMENT OF PEOPLE:

Human Resource Planning is an expression of this philosophy in the most important area of all, the effective employment of people. The changes and pressures brought about by economic, technological and social factors compel organizations of all kinds to study the costs and human aspects of labour much more seriously and carefully than ever before.

8.

EMERGENCE OF KNOWLEDGE WORKER:

Fundamentally the market has changed. The methods and the techniques of doing and managing business have undergone a paradigm shift. It is world of the knowledge worker. The rise of the intellect has been imminent. Human Resource Planning no longer can confine itself to the traditional sources for hiring and retaining. The skills of yesterday are neither available and nor are these being sought after by the new generation.

9.

EMERGING WORLD OF THINKER DOER:

The human resources of today see their roles having changed from that of a doer to that of a thinker and in most occasions' thinker doer. Organizations in contrast have continued to nurture and retain a set of human resource that have become more redundant than ever before.

Basics of Human Resource Planning

III

SIMPLY SPEAKING ... 1. Philosophy is the study of general problems concerning matters such as existence, knowledge, truth, beauty, law, justice, validity, mind, and language. Philosophy is distinguished from other ways of addressing these questions (such as mysticism or mythology) by its critical, generally systematic approach and its reliance on reasoned argument. 2. Philosophy is: (a) the attempt to acquire knowledge (distinguishes philosophy from creative disciplines such as literature or music) (b) by rational means (distinguishes philosophy from mysticism and some varieties of religion) (c) about topics that do not seem amenable to empirical investigation (distinguishes philosophy from the empirical sciences) 3. The 'philosophy of Human Resource Planning in a specific organization context shapes the way the employees are managed in that organization. 4. Lack of a clearly articulated and understood 'Philosophy of Human Resource' can make the organization susceptible to 'taking up the latest fad in people management and discarding it soon after to take up the next one'. It can also result in highly inconsistent attitudes/practices in managing the employees. This can cause a lot of avoidable confusion. 5. Logica"y speaking, philosophy of Human Resource Planning of an organization should be closely linked to (or even derived from) the core values of the organization. 6. Human Resource perceptions are important but it is necessary a" these align with the achievement of corporate goals and strategic management policies and practices. 7. In the final analysis, management comes down to three simple words: REVENUES, COSTS, QUALITY. The purposes of a Human Resource Planning Philosophy must include raising revenues, reducing costs per unit of output, and notably improving the quality of internal processes and external perceptions 8. We also have to be mindful of the possible conflict between the stated Human Resource Planning philosophy in an organization and the 'actual' Human Resource philosophy practiced in the organization. What really matters is the Human Resource Planning philosophy (basic assumptions about HRP) that emerges can be inferred from (or gets reflected in) in the decisions made by the organization. 9. Human Resource Planning Philosophy must ingrain an a" time value: Effective management of people. 10 Fundamenta"y, the market has changed. The methods and the techniques of doing and managing business have undergone a paradigm shift. It is world of the knowledge worker. The rise of the intellect has been imminent. Human Resource Planning Philosophy' must inculcate it as a value addition in its tenets.

-

Human Resource Planning and Audit

LEVEL TWO

IMPORTANCE - DEFINITIONS - NEEDS - OBJECTIVES SCOPE AND BENEFITS OF HUMAN RESOURCE PLANNING A. IMPORTANCE OF HUMAN RESOURCE PLANNING: 1. Human Resource Planning is a Continuous Process .... Human Resource Planning is a continuous processes by which management ensures that it has the right personnel, who are capable of completing those tasks that help the organization, reach its objectives.

2. Human Resource Planning Links People to Company's Mission, Vision, Goals and Objectives: Rigorous Human Resource Planning links people management to the organization's mission, vision, goals and objectives, as well as its strategic plan and budgetary resources.

3. Human Resource Planning is Forward Looking Process: Human resource planning is a forward-looking function. It occupies a pivotal place in successful human resource management programme. It ensures that people are available to extend their willing hands towards the development endeavours of an organization.

4. Human Resource Planning is Value Addition in Competition and Economic Downturn: In the times of great economic turbulence, the importance of human resource planning is more apparent than ever. A short-sighted lay-off, intended to temporarily reduce overhead, can result in much heavier long-term costs. We may regret letting people go when we are spending time and money to hire and train new staff. Plus, we lose profits when we lose experienced, knowledgeable and talented employees. Increasing environmental instability, demographic shifts, changes in technology, and heightened international competition are changing the need for and the nature of human resource planning in several organizations in India and across the world. In addition, organizations are realising that in order to adequately address human resource concerns, they must develop long-term as well as short term solutions. As human resource planners involve themselves in more programmes to serve the needs of the business, and even influence the direction of the business, they face new increased responsibilities and challenges.

B. DEFINING HUMAN RESOURCE PLANNING: 1. Dale Beach: In "Developing Human Resource Planning": According to Dale S. Beach. "Human resource planning is a process of determining and assuring that the organization will have an adequate number of qualified persons, available at proper times, performing jobs which meet the needs of the enterprise and which provide satisfaction for the individuals involved."

Basics of Human Resource Planning

2. Brian 0 Neil: In "Strategic Human Resource Planning":

-

Human Resource Planning defines project roles, responsibilities, and reporting relationships. One key result of Human Resource Planning is the staffing management plan which depicts how and when team members are added to the team, and how the team members are released from the project, the training needs of the team and several other key components.

3. Maria Stacey Lidstone: In " Strategic Business Development": Human resource planning is the process of analysing and identifying the needs for and availability of human resources so that the organization can reach its objectives. Both employee retention and attracting new talent make human resource planning a core competency for creating an organization's successful future. By linking human resource planning to company's strategic goals, human resource team ensures the organization's competitive advantage.

4. Bohlander & Snell: In "Managing Human Resources": It is a process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization.

5. Paul Turner: In "Human Resource Forecasting & Planning": The output that arises from the process of business or organizational strategy-setting as it affects the people in an organization. It contains quantitative analysis of human resource data ranging from headcount and costs to qualitative analysis about culture, learning and knowledge management. The human resources planning is a dynamic entity that can be changed if turbulence or unpredicted extraneous factors affect the business strategy. Human Resource Plan takes the decisions made at the strategic and forecasting level and develops them into a series of co-coordinated business plans. The Human Resource Plan Organization Design & Plan

Resourcing Plan

Training & Development Plan

Quantified Resource Plan

Reward Plan Development

Employee Relation

6. Coleman Peterson: In " Human Resource Planning": Human Resource Planning is the process of determining human resource requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization.

7. Stainer G & Heinemann: In "Manpower Planning": Human Resource Planning is the strategy for acquisition, utilization, improvemel1t and preservation of an enterprise's human resources. It relates to establishing the quantitative requirements of jobs determining the number of personnel required and developing sources of manpower.

8. Edward Bernsky: In "Role of Human Resources Planning in Talent Search": Human Resoureces Planning can be defined as the task of assessing and anticipating the skill, knowledge and labour time requirements of the organization, and initiating action to fulfil or 'source" those requirements. Thus, if the organization as a whole or one of its subsystem is not performing to the benchmark, in other words, it is declining, it may need to plan a reduction or redeploys its existing labour force. On the other hand, if it is growing or diversifying, it might need to find and tap into a source of suitably skilled labour.

••

Human Resource Planning and Audit

9. Gordon McBeath: In "The Hand of Human Resources Planning" (1992): Human Resource Planning involves two stages. The first stage is concerned with the detailed "planning of manpower requirements for all types and levels of employees throughout the period of the plan", and the second state is concerned with "planning of manpower supplies to provide the organization with the right types of people from all sources to meet the planned requirements."

10. Velter Eric: In "Human Resources Planning" (1994): "Human Resource Planning or manpower planning is the process by which management determines how an organization should move from its current manpower position to its desired manpower position. Through planning, management strives to have the right number and the right kind of people at the right place, at the right time, to do things which result in, both, the organization and the individual receiving the maximum long-range benefit."

11. Perm & Kandola: In "Job Analysis A Manager's Guide": Human Resource Planning is a process by which an organization prepares an inventory of skills and potential available in the organization. It involves the use of the concept of planning to visualize how the organization can go through the allocation and control its manpower resources in better fashion. In other words, it is a tool in the hands of higher management to equip themselves with the necessary data on human resources available immediately within the organization and from outside.

12. Robert Mathis & John Jackson: In"Strategic Human Resources Management & Planning": Human Resource Planning is the process of analysing and identifying the need for and availability of human resources so that the organization can meet its objectives.

13. Jarrell D.W: In "Human Resource Planning": Human Resource Planning is defined as the "process of assessing an organization's human resources needs in the light of organizational goals and changing condition and making plans to ensure that a competent, stable workforce is employed. The actual planning process will vary a great deal from organization to organization".

SIMPLY SPEAKING ... Human resource planning is the process by which an organization ensures that it has the right number and kind of people, at the right places, at the right time, capable of effectively and efficiently completing those tasks that will help the organization to achieve its overall objectives.

C. OBJECTIVE, PURPOSE & SCOPE OF HUMAN RESOURCE PLANNING:

1. Forecast Personnel Requrements: Human Resource Planning is essential to determine the future manpower needs in an organization. In the absence of such a plan, it would be difficult to have the services of right kind of people at the right time.

2. Cope with Changes: Human Resource planning is required to cope with changes in market conditions, technology, products and government regulations in an effective way. These changes may often require the

Basics of Human Resource Planning

services of people with the requisite technical knowledge and training. In the absence of a Human Resource Plan, we may not be in a position to enlist their services in time.

3. Use Existing Manpower Productively: By keeping an inventory of existing personnel in an enterprise by skill, level, training, educational qualifications, work experience; it will be possible to utilize the existing resources more usefully in relation to the job requirements. This also helps in decreasing wage and salary costs in the long run.

4. Promote Employees in a Systematic Manner: Human Resource Planning provides useful information on the basis of which management decides on the promotion of eligible personnel in the organization. In the absence of a Human Resource Plan, it may be difficult to ensure regular promotions to competent people on a justifiable basis.

S. Identifies Forecast Demand: Human Resource Planning Identifies the Human Resource needs of the organization based on strategic goals (forecasting workforce demand).

6. Forcast Supply: Helps us to understand the talent that we already have and become familiar with the talent we need (forecasting workforce supply).

7. Identifies Supply Market: Make sure we are up-tO-date on labour market, e.g. the talent that is available to us now and in the future (forecasting workforce supply).

8. Helps Creating, Modifying and Recasting Human Resource Policies, Procedures and Practices: Help us to create or modify human resource policies, procedures and practices to align the demand and supply of human resouce talent in the organization.

9. Provides Right People with Right Capabilities at Right Time and at Right Place:

Right People

Right Capabilities

Right Time

Right Place

-

Human Resource Planning and Audit

D. BENEFITS OF HUMAN RESOURCE PLANNING:

Effective Human Resource Planning provides adequate lead time for the procurement and training of employees. It is all the more crucial because the lead time for procuring personnel is a time consuming process and in certain cases, one may not always get the requisite type of personnel needed for the job. Non-availability of suitable manpower may result in postponement of delays in executing new projects and expansion programmes, which ultimately lead to lower efficiency and productivity. To overcome this, an organization must plan out its manpower requirements well in advance, so that it , can compete effectively with its competitors in the market.

1. Determining the Numbers to be Employed at a new Location: If organisations overdo the size of their workforce it will carry surplus or underutilised staff. Alternatively, if the opposite misjudgment is made, staff may be overstretched, making it hard or impossible to meet production or service deadlines at the quality level expected. So the questions we . ask are: 1. How can output be improved through our understanding the interrelation between productivity, work organisation and technological development? What does this mean for staff members? 2. What techniques can be used to establish workforce requirements? 3. Have more flexible work arrangements been considered? 4. How are the staff we need to be acquired? The principles can be applied to any exercise to define workforce requirements, whether it be a business start-up, a relocation, or the opening of new factory or office.

2. Retaining Highly Skilled Staff: Issues about retention may not have been to the fore in recent years, but all it needs is for organisations to lose key staff to realise that an understanding of the pattern of resignation is needed. Thus organisations should: 1. Monitor the extent of resignation. 2. Discover the reasons for it. 3. Establish what it is costing the organisation. 4. Compare loss rates with other similar organisations. Without this understanding, management may be unaware of how many good quality staff are being lost. This will cost the organisation directly through the bill for separation, recruitment and induction, but also through a loss of long-term capability. Having understood the nature and extent of resignation steps can be taken to rectify the situation. These may be relatively cheap and simple solutions once the reasons for the departure of employees have been identified. But it will depend on whether the problem is peculiar to one organisation, and whether it is concentrated in particular groups (e.g., by age, gender, grade or skill).

3. Managing an Effective Downsizing Programme: This is an all too common issue for managers. How is the workforce to be cut painlessly, while at the same time protecting the long-term interests of the organisation? Human resources planning helps by considering:

Basics of Human Resource Planning

1. The sort of workforce envisaged at the end of the exercise.

-

2. The pros and cons of the different routes to get there. 3. How the nature and extent of wastage will change during the run-down? 4. The utility of retraining, redeployment and transfers. 5. What the appropriate recruitment levels might be? 6. An analysis can be presented to senior managers so that the cost benefit of various methods of reduction can be assessed, and the time taken to meet targets established. If a CEO announces on day one that there will be no compulsory redundancies and voluntary severance is open to all staff, the danger is that an unbalanced workforce will result, reflecting the take-up of the severance offer. It is often difficult and expensive to replace lost quality and experience.

4. Where will the Next Generation of Managers Come From?: Many managers are troubled by this issue. They have seen traditional career paths disappear. They have had to bring in senior staff from elsewhere. But they recognise that while this may have dealt with a short-term skills shortage, it has not solved the long term question of managerial supply: what sort, how many, and where will they come from? To address these questions, we need to understand: 1. The present career system (including patterns of promotion and movement, of recruitment and wastage). 2. The characteristics of those who currently occupy senior positions. 3. The organisation's future supply of talent. 4. This then can be compared with future requirements, in number and type. These will of course be affected by internal structural changes and external business or political changes. Comparing your current supply to this revised demand will show surpluses and shortages which will allow you to take corrective action such as: a. Recruiting to meet a shortage of those with senior management potential. b. Allowing faster promotion to fill immediate gaps. c. Developing cross functional transfers for high fliers. d. Hiring on fixed-term contracts to meet short-term skills/experience deficits. e. Reducing staff numbers to remove blockages or forthcoming surpluses.

SIMPLY SPEAKING ... Thus, appropriate recruitment, deployment and severance policies can be pursued to meet business needs. Otherwise processes are likely to be haphazard and inconsistent. The wrong sort of staff are engaged at the wrong time on the wrong contract. It is expensive and embarrassing to put such matters right. Human Resource Planning is an important tool of human resources management as it helps in the following ways: 1. Manpower planning results in reduced labour costs as it helps management to anticipate shortages and/or surpluses of manpower and correct these imbalances before they become unmanageable and expensive.

Human Resource Planning and Audit

2. It is a better basis for planning employee development that is designed to make optimum use of workers' skills within organization. 3. It enables indemnification of the gaps of the existing manpower so that corrective training could be imparted. Thus, the training programme becomes more effective. 4. It leads to improvement in the overall business planning process. 5. It helps in formulating managerial succession plan as a part of the replacement planning process which is necessitated when job-change plans for managers are formulated. Besides this exercise would provide enough lead-time for identifying and developing managers to move up the corporate ladder. 6. It leads to a greater awareness of the importance of sound manpower management throughout the organization. 7. It serves as a tool to evaluate the effect of alternative manpower actions and policies.

BasIcs of Human Resource Planning

.. :." ..

LEVEL THREE

-

THE FACTORS AFFECTING HUMAN RESOURCE PLANNING Human Resource Planning is influenced by several considerations. The more important of them are: 1. Type and strategy of organization. 2. Environmental uncertainties. 3. Time horizons. 4. Type and quality of forecasting information. 5. Sufficient Lead time to recruit. 6. Outsourcing. 7. Manpower Planning methods.

1. Types and Strategy of Organization: The type of organization is an important consideration because it determines the production processes involved, number and type of staff needed and the supervisory and managerial personnel required. Manufacturing organizations are more complex than those that render services in this respect. The strategic plan of the organization defines the organization's human resource needs. For example, a strategy of internal growth means that additional employees must be hired. Acquisitions or layoffs, since mergers tend to create duplicate or overlapping positions that can be handled more efficiently with fewer employees.

2. Environmental Uncentainties: Human resource managers rarely have the privilege of operating in a stable and predictable environment. Political, social and economic changes affect all organizations. Personnel and human resource planners deal with environmental uncertainties by carefully formulating recruitment, selection, training and development policies and programmes. Balancing mechanisms are built into the human resource management programme through succession planning, promotion channels, layoff, flexi time, job sharing, retirement and other personnel related issues.

3. Time Horizons: Yet another major factor affecting human resource planning is the time horizon. On one hand there are short-term plans spanning six months to one year. On other hand, there are h;mg-term plans spread over three to twenty years. The exact time span, however, depends on the degree of uncertainty prevailing in an organization's environment. For companies operating in an unstable environment, plans must be for a short period. For others where environment is fairly stable, plan may be longer. In general, the greater the uncertainty, the shorter the plan's time horizon and vice versa.

4. Type and Quality of Forecasting Information: The information used to forecast personnel needs originates from a multitude of sources. A major issue in Human Resource Planning is the type of information, which should be used in making forecasts.

-

Human Resource Planning and Audit

Closely related to the type of information is the quality of data used. The quality and accuracy of information depend upon the clarity with which the organizational decision-makers have defined their strategy, organization structure, budgets, production schedules and so forth. In addition, the human resource department must maintain well-developed job-analysis information and human resource information systems that provide accurate and timely data. Generally speaking, organizations operating in stable environments are in a better position to obtain higher-quality (comprehensive, timely and accurate) information because of longer planning horizons, clearer definition of strategy and objectives, and fewer disruptions.

5. Sufficient Lead Time to Recruit: Human resource planners must consider the nature of jobs being filled in the organization. Job vacancies arise because of severances, promotions and expansion strategies. It is easy to employ shop-floor workers but a lot of sourcing is necessary for hiring managerial personnel. It is, therefore, necessary for the human resource department to anticipate vacancies, as far in advance as possible, to provide sufficient lead time to ensure that suitable candidates are recruited.

6. Outsourcing: Several organizations outsource part of their work to outside parties either in the form of subcontracting or ancillarisation. OutsourCing is a regular feature both in the public sector as well as in the private sector. Most organizations have surplus labour and they do not want to worsen the problem by hiring more people. Hence, the need for off-loading. Some organizations are known to carry the concept of outsourcing to ridiculous lengths and in the process, the regular employees sit idle.

7. Manpower Planning Methods: The four methods generally used to determine the requirements of personnel are: 1. Annual estimate of vacancies. 2. Long-range estimates of vacancies. 3. Fixed minimum manhour man specification requirements. 4. Specific position estimations.

SIMPLY SPEAKING ... 1. The top management team and the directors must examine their organization structure and its adequacy for the assigned functions as well as its adaptability for changes anticipated in the near future. This analysis includes a review of the current vacancies and probable future changes in the organization's personnel. 2. For example, adequate forecasts of organizational changes can indicate the number of executive positions, which will have to be filled as well as the duties and responsibilities for such positions. From this, it can be ascertained the nature of training and development required for the existing staff to fit these positions adequately. A crystallization of the job requirements can help selection of persons who should partiCipate in the management development programme. In this way, human resource planning is helpful in both the selection and developmental activities. It ensures that adequate persons are selected well in advance so that they may be developed for the anticipated position openings to ensure a smooth growth for the organization.

-

Basics of Human Resource Planning

LEVEL FOUR d

HUMAN RESOURCES PLANNING TOOLS Human Resource Planning is a relatively traditional discipline. However the world of business is changing rapidly and new tools are necessary if human resource is to meet these new challenges.

1. Corporate Head Count "Fat" Assessment Plan: Ever wonder why the decision that we need layoffs seems to come up as a surprise? Why not establish a set of assessment tools that will let us know in advance where head count and overhead costs are excessive.

2. Redeployment/Agility Plans: In this changing world it is not uncommon for new markets and products to open and close rapidly. Companies need to have a strategy to remain agile and to be able to move people, and resources rapidly from areas of low return to areas of a higher return.

3. "Smoke" Detectors (Predictors): If human resource is to be proactive it needs to be able to anticipate problems. Developing human resource systems and metrics known as "smoke detectors" that indicate potential problems might give us sufficient time to develop plans and strategies to either avoid the problem or minimize its impact.

4. Bench Strength Plan: In this time of high turnover, it's increasingly essential to have a strategy of identifying and developing individuals that can take over if an employee leaves. A bench strength plan differs from traditional succession planning in that it only covers replacing key jobs within a single department. It is not a company-wide succession plan. Individual managers are held responsible for developing at least one individual to fill every key job.

5. Employee Challenge Plan: One of the primary reasons employees leave their jobs is due to a lack of challenge. Human resource can dramatically increase retention rates if it gets managers to develop individual "Challenge Plans" for each worker. The plan is reviewed each month to ensure that the individual is constantly growing and feels challenged.

6. Retention Plan: A retention plan is a corporate strategy to lower turnover. The first step is to identify key performers and hard to fill positions. Individuals that may be "at risk" are identified. Individuals or position-wide strategies are then developed to increase their retention rates. Additional efforts are made to identify why people stay in their jobs and why people leave.

7. Quality' of Labor Supply Forecasts: Identifying the "quality" of the future labour supply is a medium term strategy based on the assumption that the available labour force will not have the competencies and skills that our company needs. Accurate forecasting will allow a company to prepare training and development plans to upgrade the available talent. Adequate preparation will give us a competitive talent advantage over our rivals.

-

Human Resource Planning and Audit

8. Horizontal Progression Plan: Because most companies have de-layered or eliminated many management positions there are fewer opportunities for promotion to stimulate workers. As a result, companies need to develop horizontal transfer and job rotation plans to ensure the continued development of both technical and managerial skills among our top employees.

9. Work or Life Balance Supply/Demand Forecasts: New hires, as well as our current workers are demanding an increasing array of benefits and work life balance options. human resource needs to develop strategies to accurately assess what those work life balance demands will be. It must also be able to forecast what percentage of our work force will choose to participate in work life balance programmes like job sharing and sabbaticals. This forecast will enable us to be prepared for the decreased amount of hours our employees will be willing to put in.

10. Learning/Knowledge Plan: Companies are becoming increasingly aware that a major competitive advantage occurs when a company can rapidly acquire information/solutions and swiftly share them throughout the company. Human Resource can help by assisting managers in developing individual and corporate wide learning plans and strategies to increase our speed of learning and the application of that knowledge within our company.

11. Skills/Competency Inventories: In order to rapidly re-deploy resources and fill unexpected vacancies. Human Resource must develop computerised skill or competency inventories. Such inventories allow us to "throw" talent at a problem because we are aware of which individuals in our corporation have the needed skill or experience to solve that problem. These inventories do not require people to move between positions as they can also be used as sources for advice and benchmarking.

12. Interest Inventories: To retain employees it is essential that we have a strategy for identifying and meeting the changing needs of our people. By asking employees as to what projects they might like to work on? What skills they would like to develop? And what individuals or teams would they like to work with? Managers can develop strategies for increasing an employee excitement and productivity levels.

13. Candidate Expectation (Offer-Acceptance Criteria) Forecast: The increased number of job openings and the "unique" expectations of the current crop of generation X and college hires makes it increasingly more difficult to get candidates to accept an offer. By using focus groups and surveys companies can identify and forecast the unique offer acceptance demands of it's recruits. Accurate forecasts can give the company sufficient time to develop the array of programmes and benefits that are increasingly essential to get a candidate to say yes.

14. Human Resource Competitive Analysis: As CEOs become increasingly aware of the value of strong human resource programmes they're demanding that each and every programme we offer is superior to that of our direct competitors. This requires a side by side and programme by programme assessment on how every human resource programme we currently have is superior to our competitors. In addition,

Basics of Human Resource Planning

••

in order to continually improve, human resource must show an improvement each year in our "this year to last years" comparison.

15. Bad Management Identification Programme: One of the primary reasons that employees quit their jobs is the bad management practices. Companies often thrown managers into their jobs with little training or preparation Through the use of surveys, 360 degree assessments and interviews companies can identify "bad managers". The organization can then develop strategies for fixing these managers, transferring them back to more technical jobs or for releasing them. Because managers are responsible for meeting many employee needs that are cited as reasons for employee turnover (communicating with the employees, challenging them, recognising their efforts, etc.) fixing bad managers may be the single most important factor in increasing productivity and decreasing turnover.

16. Talent Acquisition through Mergers & Acquisition Plan: There are ways to acquire talent beyond traditional recruiting. Acquiring "intact" teams and large numbers of talented people (with similar values) rapidly is possible by having human resource "scout out" target firms and then recommending their acquisition just for their employees.

17. Targeted Succession Plans: Targeted succession plans are narrowly focused strategies for ensuring that individuals are available to fill vacant key positions in project teams. Most succession plans have often failed because they were too broad. Targeted plans allow the focus and forecasting to be more narrowly applied with the goal of increasing the accuracy of the planning.

18. Turnover/Exit Forecast: A strong economy coupled with large swings in the health of world economies makes predicting the supply of labour increasingly difficult. The other side of this issue is identifying, where our company is likely to lose key talent, through turnover and retirements. This turnover forecast is designed to predict short term vacancies in the next six months in order to prepare the appropriate recruitment or internal promotion strategies.

EXERCISE FOR PRACTICE 1. Define Human Resource Planning? Why is Human Resource Planning important? What are its objectives? 2. What is the role of Human Resource Planning in Human Resource Management? 3. What are the benefits of Human Resource Planning? 4. "Right People with Right Capabilities at Right Time and at Right Place is Human Resource Planning". Examine and analyse the statement with reasons in favour or against it. 5. What are the factors affecting Human Resource Planning? 6. What are the various tools for implementing Human Resource Planning? 7. What do you understand by the term 'Philosophy'? Write a Passage inculcating the Philosophy of human resource planning in your organisation?

RETURN ON INVESTMENT (ROI) IN HUMAN RESOURCE PLANNING

Learning Objectives

CHAPTER THREE RETURN ON INVESTMENT (ROI) IN HUMAN RESOURCE PLANNING LEVEL ONE:

RETURN ON INVESTMENT IN HUMAN RESOURCE PLANNING

60 - 61

LEVEL TWO:

WORKING PAPER ON RETURN ON INVESTMENT IN HUMAN RESOURCE PLANNING

62 - 64

LEVEL THREE:

MEASURING RETURN ON INVESTMENT IN HUMAN RESOURCE DATA & APPLICATIONS

LEVEL FOUR:

OTHER APPROACHES IN MEASURING EFFECTIVENESS OF HUMAN RESOURCE PLANNING PROGRAMMES

65 - 69 70 -75

Human Resource Planning and Audit

LEVEL ONE

RETURN ON INVESTMENT IN HUMAN RESOURCE PLANNING CASE OF SWATI MISHRA AND FOCUS TECHNOLOGIES: Swati Mishra joined "Focus Technologies" as Human Resource Manager at its corporate office at Bengaluru. She was known to be a very bright and an innovative MBA student from the Indian Institute of Management, Banglure which she had completed three years ago. She had earlier spent more than two years with a BPO firm "Atlanta" at Hyderabad as an Assistant Manager - Human Resource. She left Atlanta as she felt that her creative and innovative capabilities were never appreciated by her seniors including her boss. Focus Technologies is a small and flat organization with 65 people on its pay-roll since it started operations two years ago. It specialises in building user friendly customised software packages in almost all the specialised areas of Human Resource, Total Quality and Customer Relationship Management. The Managing Director of the company is a 35 years young tycoon, Ravikant Upal, from Massachusetts Institute of Technology (MIT), USA, with seven years experience in building high-end software programmes. Other than his keen interest in promoting his business, he is known to be very passionate about researching, developing and implementing human resource applications at Focus Technologies. He is Swati's immediate boss. One basic reason for Ravikant to select Swati was that she was equally passionate about developing and applying software applications in Human Resource. Ravi was very confident that Swati shall do wonders for his organization. In their first meeting, Ravikant, after briefing her about the company and its overall objectives and operations and detailed discussion on human resource, asked her to design and write company's mission and vision statements. Ravikant told Swati that she has the freedom to initiate Human Resource activities and processes provided she develops blueprint for every such activity. He was clear in his advice to Swati that human resource planning and the audit of each initiative in Human Resource must account' for "Return on Investment" A couple of days later Swati sent the draft of the company's mission and vision statement to Ravikant:

"Our Human Resources function aims to maximize the return on investment from the group's human capital. Human Resource plays the role of an effective business partner and understands the firm's strategy and supports all our businesses by delivering human resource practices, processes and systems. In five years, Focus Technologies will be one of the top ten brands in the software development Industry." Focus Technologies adopted the mission and vision statement without any change. Ravikant asked Swati to develop a blueprint and a working paper on 'return on investment' and arrange a two days conference of top and middle level managerial personnel to understand, internalise and capitalise the concept of "Return on Investment in Human Resource Planning" Swati researched and prepared a working paper on "Return on Investment in Human Resource Planning" and circulated it to all the invitees to the conference. The working paper explained the concepts surrounding return on investment and answered the questions frequently asked by the

Return on Investment (ROI) in Human Resource Planning

-

executives. Swati initiated tQe discussion on the working paper during the course of day one of the conference. (level two) The next day Swati invited Return on Investment Gurus, Dr. Jack Phillips from ROI Institute and Dr. Linda Gravett, Chairperson of 'Professionals of Human Resource', experts in the "Measurement, Methodology and Working of Return on Investment", to address the executives on the application and methods of calculating return on investment in Human Resources Planning. (levels three & four)

III

Human Resource Planning and Audit

LEVEL TWO

WORKING PAPER ON RETURN ON INVESTMENT IN HUMAN RESOURCE PLANNING A.

WHAT IS RETURN ON INVESTMENT?

Return on Investment is a measure of the financial benefits obtained by an organisation over a specified period in return for a given investment in a learning programme. In other words, it is the extent to which the benefits (outputs) of an activity or programme exceeds the costs (inputs).

B.

WHY IS IT ESSENTIAL TO DETERMINE THE RETURN ON INVESTMENT IN HUMAN RESOURCE? 1. Return on Investment aims to enable companies develop Human Resource as a strategic business partner by defining and delivering value to the organisation as a whole and to the different functions in particular. The challenge is to define the "Return on Investment" in Human Resource, so that, it becomes more effective. 2. Moreover, calculating Return on Investment gives the human resource manager an opportunity to measure the financial value of any Human Resource Practice or Process. This helps the Human Resource to improve its credibility in the organisation by aligning itself to the business of the organization. 3. With the global credit crunch affecting markets across the world, budgets for programmes and projects are under scrutiny. The era of trial and error is over as managers are under more and more pressure to demonstrate how the investments are contributing to the bottom line. Since any programme or project that is implemented within an organization is done so that, it ultimately makes money, saves money or avoids costs for the organization. Stakeholders want to be assured that the money that they spend actually works.

C.

IF RETURN ON INVESTMENT IS SUCH AN IMPORTANT CONCEPT, WHY ARE SO FEW HUMAN RESOURCE MANAGERS PRACTICING RETURN ON INVESTMENT IN INDIA? 1. Absolutely. It is correct to say so because a report shows 82% of Human Resource Managers do not measure the return on investment of their practices - which is why they struggle to be seen to provide value to their organisations. 2. Human Resource Managers do realise the importance of Return on Investment, but they do not know how to measure and calculate it, for example, a training manager is more interested in the number of courses he runs than in the value these courses add to the organisation because they need to reflect the figure in the monthly MIS report which is sent to the top management for decision-taking.

D.

WHAT ABOUT RETURN ON INVESTMENT IN INTERNATIONAL HUMAN RESOURCE ASSISGNMENTS? 1. Although, companies invest heavily in international Human Resource assignments, they are failing to measure return on investment.

Return on Investment (ROI) in Human Resource Pla~ning

2. Research from Mercer shows just 17% of employers have figures to calculate the cost of their international assignments and 21 % say they cannot provide any figures. 3. Matthew Hunt, Principal in Mercer's international benefits team, said: "Expatriate assignments cost between 1.5 and 4 times what a local employee would cost. They represent a major investment, particularly those that include family. Measurement is vital." 4. Research from GMAC Global Relocation Services and Lancaster University Management School reveals that 84% of employers in the financial sector that are expanding their presence in emerging markets do not measure Return on Investment; for the technology sector the figure is 85%; and only two out of 17 Human Resource professionals in the pharmaceutical sector implement any type of Return on Investment measurement.

E.

WHAT ARE PITFALLS OF RETURN ON INVESTMENT?

The most important pitfall is to compare apples with potatoes. We have to make sure that we measure what we are supposed to measure, and that we know all the different cost and benefit items so that we can calculate an accurate and realistic Return on Investment.

F.

WHAT IS THE RELEVANCE OF PERFORMANCE MANAGEMENT FOR RETURN ON INVESTMENT?

Performance management is of paramount importance for Return on Investment, in fact a welldeveloped performance management system that includes clear measures, forms the basis of any Return on Investment system. By identifying performance gaps and addressing these gaps by means of training, can provide useful information for Return on Investment measurement.

G.

HOW DOES RETURN ON INVESTMENT SUPPORT THE BALANCED SCORECARD?

Return on Investment provides information that can be used at the learning and growth component of the balanced scorecard. By indicating specific training measures, tangible data is created that can be used to implement the balanced scorecard.

H.

CAN RETURN ON INVESTMENT BE CALCULATED FOR SOFT SKILLS TRAINING?

While it is certainly more difficult to calculate Return on Investment for soft skills training than for technical or other training, it is indeed possible to calculate Return on Investment for soft skills training. The challenge is to determine the cost items and benefits of training. The solution does not lie in the "skills", but in the outputs achieved in terms of the financial benefits as a result of the training. For example, when evaluating the Return on Investment of a diversity training programme, consider all the potential financial benefits that can be measured, ego more business from diverse markets, less grievances relating to diversity, higher employee retention, less absenteeism, etc.

I.

WHAT IS A GOOD RETURN ON INVESTMENT RATIO IN TRAINING?

There is no rule pertaining to what a good Return on Investment ratio is. Each training course is different and different Return on Investment ratios are therefore, expected. However, for certain types of training, such as sales training, Return on Investment ratios of more than 500% have been reported. In general, Return on Investment ratios between 0% and 5000% have been reported.

III J.

Hu,man Resource Plannmg and Audit

IF A LOW RETURN ON INVESTMENT, LET US SAY 10% HAS BEEN REPORTED IN TRAINING, DOES IT MEAN THAT THE TRAINING WAS BAD?

Not necessarily. A low Return on Investment cannot always be attributed to ineffective training. There can be many factors in the work environment having an impact on Return on Investment, for example, support provided by supervisors and colleagues, the culture of the organisation, market conditions, etc.

K.

IS IT DIFFICULT TO CALCULATE RETURN ON INVESTMENT?

No. Not at all, in fact, it is quite easy. All we need to do is some form of a pre and post measurement of performance, as well as determining all the costs and the financial benefits of training.

L.

SHOULD RETURN ON INVESTMENT BE CALCULATED BEFORE OR AFTER TRAINING?

Return on Investment can be forecast before training in order to determine whether, it is indeed worth it to continue with the training. Return on Investment should also be calculated after training in order to determine the real costs and benefits of the training.

M.

IF THERE IS AN IMPROVEMENT IN PERFORMANCE AFTER TRAINING, HOW DO WE KNOW WHETHER IT CAN BE ATTRIBUTED TO TRAINING? SURELY THERE ARE OTHER FACTORS THAT ALSO PLAY A ROLE.

There are various techniques available to isolate the effect of training. In other words, it is necessary to differentiate between the training and non-training factors. Some of these techniques are trend analysis, the use of control groups, and customer inputs.

N.

WHAT IS HAPPENING IN APPLICATION OF RETURN ON INVESTMENT IN INDIAN INDUSTRY? 1. The premise that an Human Resource Management System needs to work towards making the Human Resource department administratively more efficient no longer holds valid. It needs to impact the bottom line. Companies have started realising this in the last couple of years, with the result that Return on Investment calculation on Human Resources Management System is fast becoming a standard practice in many IT companies. 2. In vMoksha Technologies Return on Investment is very critical for HRMS solutions. For instance, it has already outlined the cost savings that it expects from the following Human Resources Management System processes after implementation: eBenefits (80 percent savings); eDevelopment (73 percent); eProfile (77 percent); eRecruit (33 percent); eCompensation Manager (59 percent); eProfile Manager (71 percent); eRecruit Manager (70 percent). The cost savings have been calculated based on the self-service costs vis a vis manual costs. 3. During phase two of its implementation, vMoksha is planning to add features like Track Global Assignment, Manage Labour Relation, Monitor Health and Safety, Budget Training, Position Management, Succession Plan, Compensation, Benefits and Resource Management. 4. For Kale Consultants, some of the tools in pipeline are Responsive Workforce Recruitment, Total Compensation Management, Reporting and Analysis, Competency, Career, and Succession Management, Integration with other Collaborative Applications, Comprehensive Reporting and Analysis, Workforce Management, ESOP Administration and Tracking, Generation of Organisation Chart and All Human Resource Planning and Employee/Managers Self-service.

Return on Investment (ROI)

In

-

Human Resource Planning

LEVEL THREE d

MEASURING RETURN ON INVESTMENT IN HUMAN RESOURCE DATA AND APPLICATIONS TABLE: 3.1 HUMAN RESOURCE ACCOUNTABILITY PROGRESS 1960-2009 1960-1971

1971-1980

1981-1990

1991-2009

Early approaches

Value additions

Solid value added Approaches

Human Capital Measurement

MBO in Human Resource and Personnel Management

Human Resource Case Studies

Human Resource Key Indicators

Human Resource Macro Sudies

Human Resource Cost Monitoring

Balance Sorecard

Feedback Surveys

Human Resource Auditing

-

-

Human Resource Satisfaction Surveys

Human Resource as Profit Centre

-

-

Competitive Human Resource Benchmarking

Return on Investment Method

Table 3.1: Shows the development and the growth of approaches In Human Resource Planning Management during four decades from 1960-2009

TABLE: 3.2 WHY USE RETURN ON INVESTMENT Reactive Purposes

Proactive Purposes

Shows contributions of only selected programmes

Align learning to business needs

Justify budgets

Earn appreciation of senior and top management

Identify inefficient and ineffective programmes that need to be modified or eliminated forever

Improve support for Human Resource

-

Improve and enhance design and implementation processes

-

Identification of successful programmes that can be implemented in other areas and locations

Table 3.2 Shows the Reactive and Proactive Purposes of using Return on Investment

iii

Human Resource Planning and Audit

TABLE: 3.3 PARADIGM SHIFT IN RETURN ON INVESTMENT Result Based

Activity Based

Programme linked to specific business

No business need for the programme No assessment of performance

Assessment of performance effectiveness

No specific measurable objectives

Specific objectives for application and business impact

No effort to prepare programme participants to achieve results

Results expectations are communicated to the participants

No effort to prepare the work. The work environment to support application.

Environment prepared to support application

No effort to build partnership with key managers

Partnership established with key managers

No application of Return on Investment or its measurement

Measurement of results and Return on Investment analysis.

Planning and reporting are not output focussed

Planning is output focussed

Table: 3.3: Shows the shift from activity based to result based approach in Return on Investment

TABLE: 3.4 HUMAN RESOURCE PROGRAMME VALUE CHAIN Levels

Inputs

0

Input

Measures input such as volume and efficiencies

1

Reaction and Planned Reaction

Measures participants reaction to the programmes and captures planned actions Measures changes in knowledge, skills and attitudes

Measurement Focus

2

Learning

3

Application

Measures changes in on the job behaviour

4

Business Impact

Captures changes in business impact

5

Return On Investment

Compares programme benefits to the costs

Table: 3.4: Shows the measurement focus in value chain system of any Human Resource Programme

TABLE: 3.5 AREAS OF APPLICATIONS OF RETURN ON INVESTMENT

• • • •

Learning and development

•

Or_ganization development

Competency mapping

•

Orientation programmes

Career development

•

Recruitment strategies

Executive and workforce training and coaching

•

Safety/health and well ness management programmes

• •

Leadership development

• • •

Compensation management

Diversity management

•

Events management

• •

Career development Manpower planning

• •

Industrial relations Team building Technology implementation Quality programmes

Table: 3.5: Shows the identified areas wherein Return on Investment can be applied.

-

Return on Investment (ROI) in Human Resource Planning

TABLE: 3.6 BASIC ELEMENTS OF RETURN ON INVESTMENT

I I

An Evaluation Framework

I

Case Applications and Practice

Implementation

I

Operating Standards and Philosophy

II

A Process Model

I I

Table: 3.6 shows the basic elements of Return on Investment for Implementation

TABLE: 3.7 RETURN ON INVESTMENT PROCESS 1.

2.

Develop/ review objectives solution

Develop evaluation plans and baseline data

----.

----.

5.

4.

3.

Collect data during solution implementation

Collect data after solution

Isolate the eftects of solution

----.

----.

----.

6.

Capture cost of solution

Convert data to monetary value

Calculate ROI study

----.

----.

Reporting

Generate Impact

Identify Intangibles Table: 3.7 shows ROI Process from review of solution/objectives to the last stage of calculation of ROI and reporting of impact study

TABLE: 3.8 RETURN ON INVESTMENT CALCULATION FORMULA

Net Project RETURN ON INVESTMENT =

Project

Benefit Costs

1. Cost of Project: INR 2,30,000 2. Benefits of project in the first year: INR 4,30,000

INR 4,30,000 - 2,30,000 RETURN ON INVESTMENT =

INR 2,30,000

= 0.87 x 100 = 87%

Table: 3.8 shows the formula/method of calculating Return on Investment

-

Human Resource Plannmg and Audit

TABLE: 3.9 RETURN ON INVESTMENT EVALUATION FRAMEWORK EVALUATION FRAMEWORK

1.

Reaction and Planned Action

Measures participant satisfaction with the project and captures planned action

2.

Learning and Confidence

Measures changes in knowledge, skills and attitudes

3. Application and Implementation

Measures implementation and changes in behaviour in the performance setting

4.

Measures changes in business impact variables

Business Impact

5. Return on Investment

Compares benefits to the cost

Table: 3.9 shows five stages of Return on Investment Evaluation Framework

SIMPLY SPEAKING ... GUIDING PRINCIPLES OF RETURN ON INVESTMENT 1. When conducting a higher-level evaluation, collect data at lower levels. 2. When planning a higher level evaluation, the previous level of evaluation is not required to be comprehensive. 3. When collecting and analyzing data, use only the most credible sources. 4. When analysing data, select the most conservative alternatives for calculations. 5. Use atleast one method to isolate the effects of the programme or project. 6. If no improvement data is available for a population or from a specific source, assume that little or no improvement has occurred. 7. Adjust estimates of improvements for the potential error of the estimates. 8. Avoid use of extreme data items and unsupported claims when doing Return on Investment calculations. 9. Use only the first year of annual benefits in the Return on Investment analysis of shortterm solutions. 10. Fully load all costs of the solution, project, or Investment.

programm~

when analysing Return on

11. Intangible measures are defined as measures that are purposely not converted to monetary values. 12. Communicate the results of the Return on Investment Methodology to all key stakeholders.

BEST PRACTICES IN RETURN ON INVESTMENT: 1. The Return on Investment methodology is implemented as a process improvement tool and not a performance evaluation tool. 2. Return on Investment impact studies are conducted very selectively, usually involving 5-10% of programmes. 3. A variety of data collection methods are used in Return on Investment analysis. 4. For a specific Return on Investment evaluation, the effects of the solution are isolated from other influences.

Return on Investment (RO/) in Human Resource Planning

III

5. Business impact data is converted to monetary values. 6. Return on Investment evaluation targets are developed, showing the percentage of programmes evaluated at each level. 7. The Return on Investment methodology generates a micro level scorecard. 8. Return on Investment methodology data is integrated to create a macro scorecard. 9. The Return on Investment methodology is implemented for about 3-5% of the budget. 10. Return on Investment forecasting is implemented routinely. 11. The Return on Investment methodology is used as a tool to strengthen/improve processes.

IIZiI

Human Resource Planning and Audit

LEVEL FOUR

OTHER APPROACHES IN MEASURING EFFECTIVENESS OF HUMAN RESOURCE PLANNING PROGRAMMES THE CONTINUATION: CASE OF SWATI MISHRA & FOCUS TECHNOLOGIES: Ravikant was feeling extremely happy and delighted over the tremendous applause and the overwhelming success of two day conference. At the end of the second day, he requested all the participants to give a standing ovation to Swati. For the first time in her life, she just couldn't believe that it was for real and she was not imagining. Three days later, Ravikant dropped in Swati's cabin and spoke to her "I do believe that Return on Investment is fantastic concept and the credit goes to you for making everyone in the management talking and swearing by it. But let us not try to force this concept. Yesterday, in the corridor, I overheard a senior manager telling another one that he is finding it very difficult to apply the concept in many ways but since the top management has been sold on this, he will have to stay back in the office and work on it. I feel that let it come from everyone that Return on Investment process is easy to understand and can work to measure the effectiveness and benefits of any Human Resource Planning programme. I do understand that we have to motivate people to feel enthusiastic about everything we do in our organization. What do you say?" he asked Swati. "Sir, there are many other methods and approaches which can work to measure the effectiveness of Human Resource Planning programmes. I shall arrange another one day conference to brief our managers and executives and the leave the choice to them, though I will keep on guiding them till they themselves opt for Return on Investment" she told Ravikant. "That is smart" Ravikant told her smilingly. Swati prepared a brief.on other methods available which may be used in realising the effectiveness of Human Resource Planning programmes and fixed the conference three days later.

OTHER APPROACHES: 1. BENCHMARKING: "More than 70% of Fortune 500 companies use benchmarking to reinforce their own philosophy of continuous change and improvement." Peter Drucker informed a gathering of Human Resource professionals a year before his death in 2005 Benchmarking is the process of continuously comparing and measuring performance. Organisations can measure against "best in class," or against internal benchmarks. Benchmarking externally is about learning from the best. Benchmarking internally typically implies an undertaking to work hard for year over year improvement. Some organisations distinguish between two levels of benchmarking. At one end of the spectrum we have strategic benchmarking that involves using best practices to develop corporate, programmes, for product strategies and results. At the other end we have operational benchmarking, which involves asseSSing and implementing best practices to improve processes.

Return on Investment (ROI) in Human Resource Planning

-

Regardless of what you are trying to improve with benchmarking, the following generic steps usually apply: • Identify a management practice, work process or result to be improved. • Analyse your practice, flow-chart process, and identify results indicators. • Measure your own performance. • Identify benchmarking partners (if benchmarking externally). • Determine data collection methods. • Collect data. • Determine performance gap. • Project future performance. • Develop action plan. • Implement action plan. • Monitor results. • Recalibrate benchmarks. It is important to remember that benchmarking is not about the wholesale copying of another organisation's best practices. If we are benchmarking externally, it entails measuring our performance and processes against "best-in-class" organisations and integrating those relevant processes and practices into our organisation and its culture. Internally, it speaks to benchmarking the current state, setting improvement standards and then taking subsequent measures.

2. KEY PERFORMANCE: In 1995, the Human Resouce Conference Board established an international working group of representatives from major global corporations to support its research into performance measures. In striving to find tools to help companies better manage their business, non-financial measures were developed by the working group to augment more traditional indicators. These measures evolved and became known as key performance measures. The Conference Board Report titled New Corporate Performance Measures offers this typical sample of key measures: • Quality of output; • Customer satisfaction/retention; • Employee turnover; • Employee training; • R&D investments; • R&D productivity; • New product development; • Market growth/success; • Environmental competitiveness; and • Other measures specific to each company. While there is no hard and fast rule as to how many measures are appropriate, the tendency, is usually to start with a significant number and work the list down to a manageable group.

-

Human Resource Planning and Audit

3. HUMAN RESOURCE AUDIT:

A human resources audit can serve as an important measurement-related tool. Consulting organisations routinely conduct Human Resource audits and can usually rely on the expertise of senior consultants with extensive experience in the field of human resources management. A Human Resource audit affords an organisation a snapshot of the strengths, weaknesses and potential opportunities for the Human Resource function. With audit results, as one source of information, organisations may find themselves better equipped to set an internal benchmark regarding the efficiency and effectiveness of the human resources management function. From there, an improvement agenda can be set. Over the course of a three, or perhaps four-year period, the organisation can use the audit results in conjunction with other sources of information to set objectives. The organisation may seek to re-audit after a period of time to realise an independent assessment of how well they have done. In a 1997 article from Internal Auditor entitled "Talk to me Please: Supporting the Human Resource Functions," Giovanni Grossi, President of the European Confederation of Internal Auditing, comments that, "Employees must be considered an organisation's most valuable asset and should command an auditor's attention as much, or more so, than any other business asset.. .... Employees performing to the best of their ability and with the right tools can have an enormous effect on quality, productivity, and customer satisfaction. Therefore, we should focus on leadership audits, value audits, and social audits". This article provides several questions that Grossi suggests auditors might ask to make contributions to their Human Resource departments. • Do we get the most from the potential in our employees? (Average utilization is 60 per cent.) • Is the money we invest in salaries and compensation earning the proper return? Are we investing that money or are we simply spending (wasting) it? • What is the quality of the education programmes our company provides; measured not in days spent, but in actual knowledge provided and retained? • What is the temperature of the employees' morale, and what are the consequences of performance evaluations, turnover and terminations? • If, in the post industrial age, people should be led rather than managed, how do we assess the leadership skills of our top and middle managers?

4. PROGRAMME EVALUATION: Most organisations, at one time or another, have had occasion to engage in programme evaluation. Various human resources programmes such as recruiting, career management, new employee orientation, training, succession planning, employee relocation, to mention only a few, are processes where programme evaluation methodology is an entirely suitable assessment tool. Conceptually, programme evaluation findings may be used in a similar fashion to those that might result from an audit. Programme evaluation results can help answer the questions: • Are we dOing the right things? • And, if so, are we doing the right things well? A programme evaluation can provide baseline data that can serve as benchmarks against which to set improvement/measurement targets for the future.

Return on Investment (ROI)

In

Human Resource Planning

The Asian Institute of Management, Manila, Philippines (1999-2000) observed:

-

• Evaluation is important in a result-oriented environment because it provides feedback on the efficiency, effectiveness and performance of policies and can be critical to policy improvement and innovation. In essence, it contributes to accountability in management. The institute was involved in performance management-related work on a variety of fronts, including programme evaluation. Human resource professionals thinking about embarking on a programme evaluation as a means of measuring the effectiveness and/or efficiency of a given programme should consider this as an alternative.

5. COST MONITORING: Monitoring the cost of Human Resource is not new. In fact, in its simplest form, it preceded the industrial revolution and is part of the very foundation upon which the measurement movement we are experiencing today has been built. Although, such costs have been collected and collated by central repositories since the post-war boom of the '50s, expanding on their purely statistical application for competitive comparison purposes is relatively new. Today, for example, more than 80% companies in India, representing more than ten million employees do cost monitoring analysis by evaluating the comparative data by company size, industry and combined revenue growth rate as well as by geographical region. To enable organisations to compare "apples to apples," strict definitions are applied to each data element. Extensive documentation and a help-line service assists in ensuring the rigour needed to protect the integrity of the data. The following measurement examples are drawn from the various reports generated and released by corporates specifically in manpower planning: • Human Resource Investment Factor

= Total

Expense of the Human Resource Function.

• Voluntary Separation Rate = Total Voluntary Separation/Headcount. • Involuntary Separation Rate = Total Involuntary Separation/Headcount. • Cost per Hire = Total Hiring Costs/Total Hires. • Time to Fill = Calendar Days to Fill Position/Number Filled.

6. EMPLOYEE SURVEYS: Organisational studies support the argument that there is a correlation between successful/high performing organisations and a work environment that nurtures positive employee attitudes. Areas to cover in an employee satisfaction survey might include: • General employee satisfaction with the company as a place to work. • Satisfaction with immediate management. • Satisfaction with company's efforts at communicating with employees. • Training and career opportunities. • Physical working conditions. • Remuneration. • Employment security. • Recognition.

-

Human- Resource Planning and Audit

• Morale and Teamwork . • Industrial Relations.

This list is by no means exhaustive. Each organisation must consider their own context and determine what topics to probe with their employees to maximize the benefits from such surveys. In practice, the frequency and detail used in surveying employees seems to support newer trends in the literature which suggest replacing long and detailed annual surveys with more frequent and shorter surveys.

7. STRATEGIC HUMAN RESOURCE MANAGEMENT PROFILING: In the recent publication, Tomorrow's Human Resource Management, Michael Beer argues that "for an Human Resource function to develop a strategic role it will have to develop and institutionalize a core action learning process." He describes Strategic Human Resource Management Profiling as such a process. It permits managers to assess the alignment of their organisations with strategy and values. He explains that this is done in partnership with employees. The process is facilitated by a "profiler" from human resource or the strategic planning department. The process begins with the leadership team defining its strategic task and its values. An employee task force of eight high-potential employees, one or two levels below the top team, is appointed to interview 100 employees and customers about what barriers to strategy implementation they perceive and about the extent to which management's behaviour is aligned with its stated values. Data collected by the task force is fed back to the top management and processed in a threeday profiling meeting. The first day of the meeting is devoted to feedback with the task force using a fishbowl method to facilitate open communication. The second day is devoted to rigorous diagnosis using a diagnostic model. The third day is devoted to developing a vision as to how the organisation and its management processes must be redesigned and to the creation of a number of design teams which will be engaged in the actual redesign activity. To create accountability, it is intended that the general manager will report task force findings to the next level after reviewing them with the employee task force. Issues identified through Strategic Human Resource Management Profiling in several corporations revealed six key barriers to strategy implementation and reformulation: 1. Poor co-ordination and teamwork; 2. Unclear strategy and priorities; 3. An ineffective top team; 4. Top-down or laissez-faire management; 5. Poor vertical upward communication 6. Inadequate management and management development throughout the organisation. ("The Transformation of the Human Resource Function: Resolving the Tension between a Traditional Administrative and New Strategic Role," Tomorrow's Human Resource Management, pp. 91-92) Findings of this nature give a clear picture of where an organisation can set its sights with regard to benchmarking, seeking out best practices, etc., and then measuring improvement.

Return on Investment (ROI) in Human Resource Planning

EXERCISE FOR PRACTICE 1. How would you define the concept of Return on Investment? What is its value in Human Resource Planning? 2. What is the importance of Return on Investment in International Human Resource assignments and projects? 3. What are the reasons for minuscule application of Return on Investment in human resource planning in ttle Indian Industry as compared to its acceptance internationally? 4. What is the difference between Result based and Activity based Return on Investment? 5. Which are the activities in Human Resource where Return on Investment can be applied and the results are achieved? 6. Explain in details the implementation of process of Return on Investment? 7. What are the varioL's guiding principles we have to consider when we calculate Return on Investment in any area of Human Resource Planning? 8. Explain in detail, with examples, various approaches for measuring the effectiveness of Human Resource Planning Programmes. 9. Critically examine the case study of 'Swati Mishra and Focus Technologies' and mention what steps Swati had taken to implement Return on Investment in Focus Technologies. 10. Critically examine the 'Mission Statement' of Focus Technologies and analyse whether the contents of the statement are good enough to implement Return on Investment at Focus Technologies.

CORPORATE MISSION & VISION STATEMENTS

After completion of this chapter, the students will learn the following

Learning Objectives

CHAPTER FOUR CORPORATE MISSION AND VISION STATEMENTS LEVEL ONE:

IMPORTANT QUESTIONS ON CORPORATE MISSION, VISION AND STRATEGIC HUMAN RESOURCE PLANNING

78 - 87 88 - 90

LEVEL TWO:

UNDERSTANDING MISSION AND VISION STATEMENTS

LEVEL THREE:

DEFINING MISSION AND VISION STATEMENTS

LEVEL FOUR:

MISSION STATEMENT MODELS

104 - 113

LEVEL FIVE:

THEORIES OF MISSIONNISION STATEMENTS

114 - 127

LEVEL SIX:

CONCEPTUAL FRAMEWORK: DEVELOPING MISSION AND VISION STATEMENTS IN STRATEGIC PLANNING

128 - 132

LEVEL SEVEN:

INDIA INC.: MISSION AND VISION STATEMENTS

133 - 139

LEVEL EIGHT:

FORTUNE 500 COMPANIES: MISSION AND VISION STATEMENTS

140 - 155

91 - 103

LEVEL NINE:

DEVELOPING VISION STATEMENTS AND BUSINESS SUCCESS

156 - 161

LEVEL TEN:

EVALUATION OF MISSION STATEMENTS

162 - 166

LEVEL ELEVEN:

PANTALOON RETAIL (INDIA) LTD: CASE STUDY IN MISSION AND VISION STATEMENTS

167 - 172

MAHINDRA AND MAHINDRA LIMITED: CASE STUDY ON IMPACT OF MISSION AND VISION STATEMENT

173 - 179

WRITING MISSION AND VISION STATEMENTS

180 - 184

LEVEL TWELVE: LEVEL THIRTEEN:

IMPORTANT QUESTIONS ON CORPORATE MISSION, VISION AND STRATEGIC HUMAN RESOURCE PLANNING 1.

WHAT IS VISION, MISSION AND STRATEGY?

An organization's vision, mission and strategy are essentially the ''where, what and how" of an organization's Strategic Management Plan. A vision statement presents an inspiring vision of the future for participants to work toward, or of where the organization would like to be. The mission statement presents the present work of the plan, or what it is that participants will do. Finally, the strategy links the mission and vision together, and communicates how the present (what) connects to the future (where). Simply speaking, a mission statement informs you of the fundamental purpose c~ '.; Ie organization while the vision statement outlines what the organizations wants to be. The mission statement is rooted in the present while the vision statement is about the future identity

2.

WHY VISION, MISSION AND STRATEGY ARE IMPORTANT?

Any large change initiative that is not grounded by a clear vision, mission and strategy is likely to lose focus. Because a strategic management plan will need the participation and support of a large number of people, all of whom might come to the process with different ideas about what it means, it is important to create a guiding principle that will unify the efforts of everyone involved.

3.

WHAT DO VISION, MISSION AND STRATEGY CONSIST OF?

In simplistic terms, a plan's vision, mission and strategy consist of words and ideas. Without a framework within which they can be put into action, these words and ideas are easily forgotten or minimised, and the results (less focus, people working at cross-purposes, lack of direction) are the same as if they were never crafted. Therefore, it is crucial that once created, mechanisms are put into place that measure the working group's activities against the vision, mission and strategy of the plan at every available opportunity.

4.

WHAT IS THE PHILOSOPHY BEHIND MISSION, VISION AND STRATEGIC HUMAN RESOURCE PLANNING?

Consistent with the mission, values and operating principles, strategic human resource planning provides a work environment that values and respects the dignity of people demonstrated through the continual development of the person - spiritually, physically, emotionally and intellectually. The organization depends upon employees to participate fully in bringing success to the mission, vision and direction under the effective leadership of the management to achieve: • Organization's business goals. • Develop relationships that collaborates diversity and diverse ideas, perspectives and cultures. • Help people to realize their potential by developing competencies and skill sets.

Corporate Mission and Vision Statements

• Raise productivity and work effectiveness. • Support a balance between family and work life. • Recognise and reward individual and team achievement. • Provide appropriate working conditions and resources to enable people to do their work. • Respect and be sensitive to the needs of individuals when the employment relationship ends.

5.

WHY STRATEGIC PLANNING IS A KEY INGREDIENT IN DEFINING THE DIRECTION OF AN ORGANIZATION?

In a world of no hold's barred competition, a right series of decisions and actions could mean the difference between survival and destruction. The current economic meltdown has shown that there is no immunity from financial tsunamis. Strategic planning is a key ingredient in defining the direction of an organization and the allocation of resources. Strategies are of internal origin and pro-active in nature. The outcome is used to define the road map for the present and future. It generally comprises the following questions: 1. "What do we do?" 2. "For whom do we do it?" 3. "How do we beat the competition?" Therefore, an evaluation of the current situation, defining targets and a road map are important keys. Organizations often outline goals and objectives into a mission statement and a vision statement. The mission statement and vision statement are very similar yet very different. .

6.

WHY IS IT SO IMPORTANT ABOUT DEVELOPING MISSION AND VISION STATEMENTS?

Developing a mission statement offers significant benefits. The primary benefit is focus for now and for future. Only by agreeing which markets to go after, and which products or services to offer, can an organization concentrate its limited resources viz: 1. A Human Resource manager must know as to what are his inputs whereby, he can align his . objectives with the attainment of organizational·goals 2. A marketing manager must know which trade shows to attend, which mailing lists to rent, which media to consider for advertising. 3. A product manager must understand the needs of the target market to develop specifications for a new product. 4. An operations manager must understand the customer's need for reliability, for quick delivery. for customization and ultimately a quality product. The needs of each of these managers call for a common understanding and that is a "mission statement"

7.

WHY CURRENTLY, THERE SEEMS TO BE AN INCREASING INTEREST IN DEVELOPING MISSION AND VISION STATEMENTS?

Business managers are currently struggling with the ever-increasing complexity of our economy - with finding and developing skilled employees; with controlling costs; with managing productivity; dealing with competitive pressures and the resultant cost squeeze; with an increasingly long list of government regulations; and with understanding and applying technology.

Human Resource Planning and Audit

Managers everywhere are discovering that an important part of the solution to this dilemma is focus - concentration of resources. To achieve this focus, managers must share a common understanding of the very foundation of their enterprise - they must develop their company mission

8.

SHOULD WE WRITE OUR MISSION AND VISION STATEMENTS IN GENERAL TERMS OR SHOULD WE BE VERY SPECIFIC?

A well-developed mission statement will be neither very general nor very specific. Rather, it will be focussed. It will be broad enough to allow for the diversity which management intends such as new products or services, new markets, revised or new innovative Human Resource practices, etc. And it will be specific enough to provide the focus necessary to the success of the business.

9.

WHO, WITHIN THE ORGANIZATION, SHOULD DEVELOP THE MISSION AND VISION STATEMENTS?

Most often, the mission and vision statements are developed as an important element in the company's strategic plan. As such, these should be developed by the same planning team, which develops the strategic plan.

10. SOME MISSION AND VISION STATEMENTS ARE IN SINGLE SENTENCES. WHILE SOME ARE LONGER, WHICH IS BETTER, SHORTER, OR LONGER? A shorter mission/vision statement, describes the essence of the enterprise. It describes the internal dimensions of the business: the products and services offered and the functions performed. And it identifies the market... the customer, and the reason the customer chooses this particular company's products or services. In effect, the shorter mission statement builds a bridge between the company and its customer. A longer mission/vision statement builds this same bridge to the customer. But it goes on to describe a number of other relationships as well. It may describe the company's earning a profit... its relationship with its owners. Or it may describe its being a good employer ... its relationship with its employees. Or it may describe its substance in human capital investment Certainly, each of these other relationships is important, but only the relationship with the customer is at the very essence of the enterprise. Why? Because if the organization doesn't manage that one relationship well - if the company doesn't provide products and services which meet customer needs - then the company can maintain none of its other relationships. For this reason, it is better to develop a shorter mission/vision statement... one which is descriptive of the relationship with the customer as a focus for present and for future.

11. BUT IF THE OTHER RELATIONSHIPS ARE IMPORTANT, SHOULDN'T WE COMMIT THEM TO WRITING ALSO? Yes, one may commit them to writing. But one really shouldn't describe these relationships in the mission statement... for that would dilute the description of the relationship with the clients/ customers. In company's strategic plan, we can include a section called, "Company Philosophy." In that section, we may write about our company's relationships with (its philosophy towards) its owners, its employees, its community, etc.

Corporate Mission and Vision Statements

l1li

12. SHOULD THE MISSION STATEMENT DESCRIBE OUR BUSINESS AS IT IS TODAY, OR SHOULD IT DESCRIBE OUR BUSINESS AS WE WOULD LIKE IT TO BE IN THE FUTURE? The development of the mission statement is the step which moves the strategic planning process from the present to the future. In effect, the mission statement must "work" not only today but for the intended life of the strategic plan of which the mission statement is a part. If we are developing a five year strategic plan, for example, we should develop a mission statement which will "work" for the next five years.

13. DO ORGANIZATIONS NEED TO RE-WORD THEIR MISSION AND VISION STATEMENTS TO ENERGIZE STRATEGIC PLANNING? Yes, of course, we should. Even though, we intend that our mission statement "work" for a number of years, circumstances change. So we should be prepared for some change in our mission statement. But that change should be a fine tuning. An evolutionary change - rather than a revolutionary change - over time. Remember, our mission statement is our description of "what business we're in," of our relationship with our clients. As such, it represents the very foundation of our enterprise. Certainly, we would not want the foundation of our enterprise changing significantly from year to year. Mission and visions statements are not static. They are live and kicking. They are dynamic statements. They are not ornamental statements subscribed on the websites of corporate world. Organizations are living structures. They continue to grow and achieve the optimum levels. On the other side there are ones which stop growing due to innumerable reasons. In both the situations, the companies need to re-Iook and modify or re-word their visions and mission statements. Thus, revaluation of vision and mission statements gains highest level of importance and significance. To prove this assertion, let us take four recent case studies to show that it is pertinent for the corporate world to continue to evaluate and redefine their mission and vision statements for implementing the strategic plan to achieve their goals and objectives:

1. STATE BANK OF INDIA: The Elephant can Dance: Building Mission and Vision Statements: "I am not a management guru and this is something that even I don't fully understand. But what I do understand is that something good has happened," said State Bank of India Chairman, 0 P Bhatt, during a presentation on the transformation of SBI, at the first international conference on 'Igniting the Genius Within' at the Indian School of Business, Hyderabad. It wasn't easy. "But I could see the need for transformation. I took 25 of the top people into an offsite at Amby Valley, near Pune. This had never happened in the history of SBI. I first made a presentation for two hours on the state of the bank in the context of the country and the economy. I told them that all of us sitting in the room were responsible for what has gone wrong. And we alone could bring the bank out of this mess. This set the context for the discussion," said Bhatt.

III

Human Resource Planning and Audit

As expected, it wasn't easy. "On the first day there was a fair amount of skepticism, but by next afternoon it started to change. By the third day, there was a lot of energy and commitment within the group," said Bhatt. Whatever, was being discussed was being documented as well. This led to the making of a document called the 'State of The Nation'. And this became the basis for transforming SBI. It was communicated to SBI's 14,000-odd branch managers across India. "Initially our fourteen deputy managing directors had volunteered to travel around the country explaining the document. But when the time came, some of them were reluctant. They said they were pressed for time. But since I pushed them, they went. And the feedback we got was surprising. The branch managers asked why we didn't tell them all this before. They said they weren't aware that the bank was in such a shape," said Bhatt. The next point on the plan was to get working on the unions. "I had a four-day session with the 30-32 union leaders. The same thing happened in that case as well. They had not realised the state the bank was in. At the end of it, they made a document, which urged people across the bank to get to work. One of the points that the document made was 'If you have to sit late, to work for a customer, do that, because all your lives you have been going home early'." Along the way, Bhatt realised that something as simple as 'shaking hands' and listening to his employees did a lot to their morale. "I went to a branch. I shook hands with one of the counter clerks and I realised that the guy had high fever. So I asked him why he had come to office. 'Sir aap aaye hain', (sir, you have come) he replied. I realised that without doing anything I'd given him something." An in-house programme called "Parivartan" was launched. "It took 6-7 months for us to develop it. We launched it across the country and covered all our employees in 120 days. We have around 60 training centres across India. I stopped all other training. Typically, what happened earlier was that three people in a branch of 30 were sent for training. They came back wanting to do new things, but their colleagues didn't allow them to. So this time what we did was, if a branch had 30 people, we sent all of them together for training. It was carpet bombing," said Bhatt. What happened next was simply magical. "They don't ask for overtime. They sit in office late. They may not be able to help customers all the time. But at least they try." How the bank went about making a new vision statement, said Bhatt, was very interesting. "We have always had a vision statement. But even I, as the chairman of the bank, did not know it. In fact, it used to be a trick question for the candidates we used to interview. And none of them knew it. Even the guys who were asking the questions did not know it. So we employed a professional agency to come up with a new vision statement. But somehow we did not like what they came up with. So what we did was send out a questionnaire to our 200,000 employees asking them to craft a vision, mission and a value statement for the bank. We got 141,000 responses. We distilled that and came up with a simple vision: My S81. My Customer First. My S81 First in Customer Satisfaction. It is a very simple vision statement and something our employees can identify with."

Corporate Mission and Vision Statements

2. LEHMAN BROTHERS: INVESTMENT BANK USA:

-

Let us go through the mission statement of the leading US investment bank "Lehman Brothers" in the context of its bankruptcy due to its exposure to sub-prime loans that triggered the world economic slow-down and the recession since early 2008. Later in September 2008, Nomura Holdings Inc., Japan's largest brokerage house, made a deal to buy Lehman Brothers Holdings Inc. The deal includes Lehman's businesses in Japan and Australia. Nomura called the deal "a once in a generation opportunity" for the Japanese brokerage house. The deal includes Lehman's 3,000 employees in Asia, including the U.S. investment bank's biggest regional offices in Japan and Hong Kong.

A. Mission Statement of Lehman Brothers: "Our mission is to build unrivalled partnerships with and value for our clients, through the knowledge, creativity and dedication of our people leading to superior results for our shareholders".

B. Mission Statement of Nomura Holding: 1. We are committed to enriching society by delivering superior investment services. 2. We are not afraid to continually challenge conventional wisdom and actively encourage change in order to pursue growth. 3. We are committed to putting our clients at the heart of our business, developing and maintaining long-standing relationships based on trust. 4. We are one firm, committed to delivering the full range of our capabilities, knowledge and resources to meet the needs of our clients. 5. We respect diversity and value differences of opinion.

C. Principles of Conduct for Nomura Executives: • Be creative and innovative. • Seek out opportunities, communicate, execute. • Manage ourselves, our teams, and the Group. • Take appropriate risks and actively manage those risks. • Demonstrate leadership, inspire our colleagues.

D. Analysis: 1. The absence of seriousness of the top management and the board of directors of Lehman Brothers in revaluating the mission statement. 2. The components of the mission statement were never quantifiable and measurable. 3. They had no serious concerns ever for their stakeholders and shareholders. 4. The mission statement failed to communicate and convince the management to appropriately keep away from the greed of sub-prime business. 5. Had the company done a serious homework on the strategic planning issues involving subprime business, the company would not have succumbed to the exposures of sub-prime mortgages. 6. Nomura Holdings will have to remove the ornamental effects from the mission statement of Lehman Brothers and re-word it to make it more realistic, strategic and achievable.

3.

Human Resource Planning and Audit

SATYAM COMPUTERS, PRICEWATERHOUSECOOPER AND INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA:

SATYAM COMPUTERS: A. THE GROWTH: The word Satyam means "truth" in Sanskrit. Satyam Computer Services Ltd was found in 1987 by B.Ramalinga Raju. The company offers information technology (IT) services spanning various sectors, and is listed on the New York Stock Exchange and Euronext. Satyam's network covers 67 countries across six continents. The company employs 40,000 IT professionals across development centers in India, the United States, the United Kingdom, the United Arab Emirates, Canada, Hungary, Singapore, Malaysia, China, Japan, Egypt and Australia. It serves over 654 global companies, 185 of which are Fortune 500 corporations. Satyam has strategic technology and marketing alliances with over 50 companies. Apart from Hyderabad, it has development centers in India at Bangalore, Chennai, Pune, Mumbai, Nagpur, Delhi, Kolkata, Bhubaneswar, and Visakhapatnam.

B. THE FRAUD AND CONFESSION: On 7 January 2009, company Chairman Ramalinga Raju resigned after notifying board members and the Securities and Exchange Board of India (SEBI) that Satyam's accounts had been falsified. Raju confessed that Satyam's balance sheet of 30 September 2008 contained: • Inflated figures for cash and bank balances of INR 5,040 crore (as against INR 5,361 crore reflected in the books). • An accrued interest of INR 376 crore which was non-existent. • An understated liability of INR 1,230 crore on account of funds was arranged by himself. • An overstated debtors' position of INR 490 crore (as against INR 2,651 crore in the books). Raju claimed in the same letter that neither he nor the managing director had benefited financially from the inflated revenues. He claimed that none of the board members had any knowledge of the situation in which the company was placed. He stated that "What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew significantly (annualised revenue run rate of Rs 11,276 crore in the September quarter of 2008 and official reserves of Rs 8,392 crore). As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. It was like riding a tiger, not knowing how to get off without being eaten."

C. MISSION STATEMENT OF SATYAM COMPUTERS: 1. Did you know that an Intelligent Business functions similar to the human brain? "The human brain captures, analyzes and stores every interaction with the external world and uses the knowledge in the next interactions. Similarly, an Intelligent Business consolidates and analyses information about the market place, customers and competitors and uses that information to make critical business decisions and gain a competitive edge."

Corporate Mission and Vision Statements

l1li

2. Customer Relationship Management: Building Profitable Relationships. Why shout to 3 million people when you can talk to 500 potential customers. Many organizations may have thousands, maybe millions, of customers across multiple product lines. To build long lasting customer relationships, many organizations are rolling out customer relationship management systems. However, for profitable relationships to be built, an integrated view of the customer across multiple product lines, defining the customer's needs and wants, his lifetime value to the organization and behavioral factors is critical.

D. MISSION STATEMENT OF PRICEWATERHOUSECOOPER: Our middle market and private company services (PCS) professionals are trusted advisors to tens of thousands of private, medium-sized and smaller organisations around the globe. We have developed dedicated resources who focus on the audit, tax compliance and planning, and business advisory needs of middle market businesses, private companies and their owners. Our philosophy is simple: We work with clients to build relationships and add value to their organisation. Whether we're helping an entrepreneur grow his/her business or the management team of an innovative company enters new markets, we can apply our knowledge of the business, the industry and the geography to the specific circumstances."

E. MISSION STATEMENT IPROFESSIONAL ETHICS OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (ICAI): 1. Cardinal Principles: • Service before self. • Extends beyond the legal requirements.

2. Some Major Highlights: • Prohibition on other occupations. • Prohibition on solicitation. • Prohibition on advertisement and canvassing. • Prohibition on financial interest in auditee company. • Restriction on number of audits. • Limit on fees for non-audit aSSignments. • Prohibition on writing books of accounts of auditee company. • Demarcation between external and internal auditors. • Professional fees for audit and other services received by a firm not to exceed 40% of the gross annual fees of the firm. ANALYSIS: 1. Satyam initiated strategic management to defraud its clients, customers and employees and chopped, into innumerable pieces, the mission statement of building profitable relationship with its customers and clients. 2. Satyam scandal has destroyed confidence in Indian companies despite indictment of western companies after financial frauds involving most notably Enron (2002) and the $9 billion World com accounting fraud the same year.

-

Human Resource Planning and Audit

3. Most notably in this respect, Satyam employed an internationally acclaimed western auditor, PricewaterhouseCooper (PwC), using a mechanism yet to be introduced widely in India, one that ironically was meant to give investors more transpar~nt and accurate information of the financial state of the company. 4. The general verdict of accountants is that Satyam's auditors blew it big time, whatever, fraud and forgery the management could have produced to hoodwink them in a scandal that is estimated to have cost Satyam investors $2 billion on January 7, 2009 alone as the stock plunged by 77% on news of the fraud. 5. The local unit of PwC said in a statement that Satyam's accounts were supported by "appropriate audit evidence". 6. Collusion was a common term used by the "accountant community". Auditors not knowing about a fraud of this size does not seem possible, particularly with the confession that Satyam has been doing it for 7 years. 7. PwC, which calls itself the "world's largest professional services firm", could be worse hit than its client Satyam, with its credibility taking severe damage. The auditing firm, which has offices in 150 countries, stated that the audit of Satyam was carried out on the basis of the information, records, books of account and other documents given to them by the company. 8. ICAI, despite its strict norms on professional ethics, found itself helpless to stop its members from indulging in unethical practices. According to media reports, the sources stated that it is very difficult to find a firm of auditors who do not sign and certify the balance sheet and the profit and loss account of an auditee firm on the dotted lines as dictated by the chief executive/board of directors.

4. MERRILL LYNCH: FINANCIAL SERVICES COMPANY USA: A. Mission Statement: At Merrill Lynch, 'Responsible Citizenship' is more than a principle. It is a way of life. Through our global philanthropic efforts, we combine our financial resources and expertise with our greatest asset-our people to build brighter future in the communities throughout the world in which our employees and clients live and work. To achieve that goal, our charitable giving targets innovative and effective programmes for children and youth that provide direct services, have potential for broad impact, and offer significant volunteer opportunities for Merrill Lynch employees.

B. Short History: The Rise and The Fall: Merrill Lynch and Co., Inc. is a global financial services firm now owned by Bank of America. The firm was acquired by Bank of America under distressed circumstances during the 2008 financial crisis. Merrill Lynch provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related financial services worldwide. Merrill Lynch is headquartered in New York City. On September 14, 2008 Bank of America announced its intention to acquire Merrill Lynch for Bank of America common stock. Under the terms of the agreement Merrill Lynch shareholders receive 0.8595 shares of Bank of America stock. Shareholders of both companies approved the acquisition on December 5, 2008 which took effect January 1, 2009.

C. Fraud Charges Against Merrill Lynch: 1. On November 1, 2007, Merrill Lynch CEO Stanley O'Neal left the company, after being criticised for the way he handled the firm's risk management and the sub-prime mortgage crisis,

Corporate Mission and Vision Statements

l1li

which resulted in about US $2.24 billion in unexpected losses, and for discussing in public the possible merger with Wachovia Banking Corporation, without being authorized by the board to do so. He left Merrill Lynch with about US $161 million worth of stock options and retirement benefits. John Thain, CEO of the New York Stock Exchange, succeeded him as CEO on December 1, 2007. 2. On January 17,2008, Merrill Lynch reported a $9.83 billion fourth quarter loss incorporating a $16.7 billion write-down of assets associated with sub-prime mortgages. 3. On April 17,2008, Merrill Lynch reported a net loss of $1.97 billion for the first quarter of 2008. Merrill responded to its losses by raising capital through the sale of preferred shares; however, experts suggest that such a strategy may pose a risk to the company's credit rating which could cause an increase to the company's borrowing costs. 4. On January 22, 2009 John Thain resigned as CEO of the company after it was disclosed that he had rushed to payout $3-4 billion dollars in fourth quarter bonuses to Merrill employees by the end of 2008, just prior to Bank of America's acquisition of the company became final. Thain allegedly did not disclose the bonus payouts to Bank of America negotiators. Thain failed to warn shareholders of the magnitude of Merrill's losses prior to the Bank of America acquisition. 5. In November 2007,(ln sub-prime mortgage crisis) Merrill Lynch had announced it would writedown $8.4 billion in losses associated with the national housing crisis and remove E. Stanley O'Neal as its chief executive. O'Neal had earlier approached Wachovia bank for a merger, without prior Board approval, but the talks ended after O'Neal's dismissal. In December 2007, the firm announced it would sell its commercial finance business to General Electric and sell off major shares of its stock to Temasek Holdings, a Singapore investment group, in an effort to raise capital. 6. The deal raised over $6 billion. In July of 2008, the new CEO of Merrill Lynch, John Thain, announced $4.9 billion fourth quarter losses for the company from defaults and bad investments in the ongoing mortgage crisis. In one year between July 2007 and July 2008, Merrill Lynch lost $19.2 billion or $52 million daily. The company's stock price had also declined Significantly during that time. Two weeks later, the company announced the sale of select hedge funds and securities in an effort to reduce their exposure to mortgage related investments.

SIMPLY SPEAKING ... 1. No mission or vision statement can work for any corporate strategic planning if the intentions of CEO or the board of directors or their statutory auditors are dishonest or fraudulent.. . 2. Designing and writing mission and vision statements is not an easy task because these require clarity and assessment on the current status of the business and the future perspectives and its growth. Once the analysis is available, the writing of the statements can be handed over to a professional who can word and decorate them with a touch of class. That is all fine. What about the implementation? 3. Implementation takes time. Destroying it takes no time. But who would know about it other than a chief executive, board of directors or the auditors. Satyam computers destroyed beautifully worded mission statement within minutes seven years ago. And others followed in. Therefore, the implementation or the destruction of a mission or vision statement depends solely on the chief executive ...

.......

Human Resource Planning and Audit

LEVEL TWO

UNDERSTANDING MISSION AND VISION STATEMENTS CASE OF BIMAL AND MRUNAL SEN: Two budding entrepreneurs, Simal Sen and his father, Mrunal Sen, walked into SME (Small and Medium Enterprise) get-together and talked about growth challenges they are currently facing in their businesses. Soth focussed quite a bit, among several other issues, on the Human Resource Planning challenges that come with growth. Simal and Mrunal Sen own Horizon Real Estate and Construction Company established in 2004 at Gurgaon in the state of Haryana in North India. They have been seeing significant growth in their business till they began facing economic slowdown in the beginning of 2008. Real Estate market crashed by about 30-40 % but they continue to grow at 10-15% margin despite the recession. Simal is finding the need to step back from the day-to-day aspects of construction manc.dCment. That is, like many entrepreneurs he can no longer spend time "working in his business", but needs to shift to "working or his business." At the same time, his father, Mrunal is beginning to step away from the business - not retire, but clearly backing off from his role in the day-to-day operations of the business. So Simal has to take on more of a strategic leadership role in Horizon, by hiring people who can manage the operations "People say real estate is location, location, location. At this point in our business growth, I would say that the key has become people, people, people," Simal shared it with the gathering feeling little disappointed and finding himself stuck at crossroads. He feels that the key is not just finding the best people, but finding the right people for the right job. Soth the father-son duo tried keeping their overhead expenses at low levels, a lesson they learned over the years with lots of ups and down in their industry. And while their current growth creates the need for more people, they are trying to develop strategies that will keep all of the people they are adding, engaged and productive, having no idea whether the worse is yet to come or it's over. Simal has big plans to bring in information technology and other necessary electronic infrastructure and systems in various processes in Horizon besides enlarging his team. Sut Horizon is not large enough to afford such a big investment at this stage of the recession. During the course of dinner, the duo met Rajbir Shansali- the Chairman of Akash-Ganga Group of Real Estate and Construction Companies located at Gurgaon. They sought his advice to get the solution to their problem. Rajbir shared with them his thoughts and probable solution to their problem: 1. Conduct an Organizational SWOT analysis and match it with the employees SWOT analysis to get feedback on the current status of goal setting and the corresponding employee involvement in achieving the business goals of the company. In doing this, they may face obstacles and resistance from their managers and staff but the persistent efforts and consistency would definitely yield results. 2. Study the organisational structure, culture and effectiveness of functions of all the departments and divisions of the company.

Corporate Mission and Vision Statement$,

3. Study the current competencies and the skill sets of all the employees at various levels and match it with the employees' SWOT to understand the future needs of the company and the employees and the company's expectations and vice versa. 4. Based on the feed back, write the mission and the vision statements and work on human resource strategic planning and align them with the revised corporate business goals. 5. Once the Strategic human resource planning gets going, initiate manpower strategic planning for investment in human capital to look into the need for right people. 6. If the entire process comes through successfully, Simal would, in about a year's time, come out of the daily routine and begin working "at his business" rather than "in business". Rajbir Shansali proved to be right in giving them the solution to the problem. In about nine months from the time they met Rajbir, Bimal made aggressive inroads into human resource planning process. He brainstormed his company's goals and simplified mission and vision statements with his top management team by applying Management by Objectives (MBO) and Performance Management tools. Simal held series of meetings with Anup Chandra, Director - Human Resources to design and formulate a broad-spectrum human resource planning module based on strategic alliance between corporate goals, statements of mission and vision and human resource planning processes and systems. Horizon's mission and vision statements read: MISSION "To be amongst the top real estate companies in India, by consistently delivering superior and enduring value to all the company's customers and to the society at large, by making a qualitative improvement in the lives of people through its projects". VISION "The vision of the company now envisages stepping into the shoes of multi-dimensional corporate, satisfying wider based customer needs in next three year" Three months later ....... Bimal began working at his business.

THREE PERSPECTIVES OF MISSION: The literature identifies three basic schools of thought that apply to the concept of mission. Broadly speaking, one school of thought describes mission in terms of business strategy. The second school describes it in terms of philosophy, values and ethics. The third school, the military, looks at mission as the ultimate function of operational effectiveness.

1. Strategic Perspective The genesis of the strategic approach was an article by Theodore Levit, "Marketing Myopia", which appeared in the Harvard Business Review in 1960. This was later expanded upon by Abel and Hammond in their book "Strategic Market Planning" (1979). According to this approach, a mission is defined in terms of the product or service, the clients to be served and the technology used to deliver the product or service to the customer. To do it this way, they argue, avoids the problem of being too vague or generalised: "being in the transport business" is the oft-quoted example. When the mission is anchored to products and services, clients or customers, and to delivery technology, it gives, at the same time, a clear statement of strategic direction. The interface between strategy and mission is very concrete.

-

Human Resource Plannmg and AudIt

2. Philosophical and Ethical Perspective:

By contrast, the philosophical, social values and ethical view argues that mission is the cultural "glue" that enables an organization to function as a collective unity. This cultural "glue" consists of strong norms and values that influence the way people behave how they work together and how they pursue the goals of the organization. This approach sees mission as encapsulating some of the emotional aspects of the organization. We see that, in this respect, this approach encompasses many of the core concepts of vision as we have discussed it above.

3. Military Perspective: Military historians such as Little Hart, Von Clausewitz and many others, have, after studying many ''wars'', deduced what is commonly referred to as the "ten principles of war". The first and major principle is "the selection and maintenance of the aim". In order to achieve the aim, it is essential that strategies be formulated. The execution and achievement of these strategies are, in turn, dependent on the successful completion of one or more missions. It will be obvious from the above that "aim" is synonymous with Vision, an~ ~hat the military consider mission as an operational subset of vision. It is the "do", or objective, function. The military view is closely allied to the Abel and Hammond approach discussed above. The Abel and Hammond approach also incorporates a "do" function, in that it defines products and services, customers and technology in a three - dimensional, isometric spatial diagram. This spatial diagram can be related directly to the strategy of the organization.

SIMPLY SPEAKING ... The military and strategic approaches have much in common. In both, the ultimate function of the mission is the achievement of an objective or goal which contributes directly to successful strategy implementation. By definition, they are both very much functional in content and are therefore referred to as functional strategies. The ethical or philosophical approach, as reviewed above, has three distinct drawbacks. 1. It contains many of the elements of the vision which could be very confusing. 2. It lacks an action orientation. 3. The interface with the strategy of the organization is not clear.

l1li

Corporate Mission and Vision Statements

LEVEL THREE d

DEFINING MISSION AND VISION STATEMENTS CASE OF RAHUL AND MEGHNA JOSHI: "Rahul Kamalnath Joshi, the managing director and the owner of 2500 crores empire "Race Mobike Corporation" has cornered the automotive market in two-wheeler segment in Maharashtra and entire north India. Located at a major highway intersection of NH-4 and NH-8 at Pune, it has been number one buick manufacturer in India for last 5 years. Following the unexpected and sudden death of Rahul Joshi, his wife, Meghna took over as CEO, and son Kabir and daughter Aarti became Vice-President. Four days after the death of Rahul Joshi, Meghna and children addressed all the employees, customers and auto dealers that they would continue to lead the company from where Rahul Joshi left. Meghna recited a couplet from the diary of Rahul which he had penned couple of months before his death, while he and his management team had finished giving final shape to his corporate mission and vision statements. "Only as high as we reach can we grow, Only as far as we seek can we go, Only as deep as we look can we see, Only as much as we dream can we be." The applause was evident. All the employees and other constituents reposed their confidence in Meghna and her children. What Rahul Joshi had built was a business with legacy of excellence and prosperity. He had started as a car mechanic and his accomplishments led him to become the general manager of GM motors in US. For almost 20 years, he built his business into one of the premier manufacturing giant. It was not just his acumen that contributed to his company's excellence and success. Daughter Aarti said "Papa always fostered the philosophy that we are only as good as our employees". He treated his employees well and employee's satisfaction was very high as a result many of them had been with the company for years. Meghna Joshi has big shoes to fill in. She has leadership challenge of following someone who was loved and respected by his employees. Aarti, remembering his father, said "when any leader dies, this is the biggest time when people leave ship" Back from the meeting into her cabin, Meghna began reading the contents of the mission and the vision statements:

MISSION: "Our brand is the visual expression of our thoughts and actions. It conveys to everyone our intention to constantly inspire confidence. Our customers are the primary audience for our brand. Indeed, our brand identity is shaped as much by their belief in 'Race' as it is by our own vision. Everything we do must always reinforce the distinctiveness of our efforts to make our company a "world class organization" and the power of our extremely good and cordial relationships and cooperation with our employees, clients, customers and all our other constituents. We are conscious

-

Human Resource Planning and Audit

of the fact that our human resources are our assets and their overall education, training and growth is significant for achievement of our corporate goals". VISION:

"We have a dream to be a "world class organization" in two wheeler automobile segment with in next five years. Our vision stems from the fact that we are already in the process of making "Race Mobike" a learning organization based on our cherished and shared values in collaborating and cooperating with our employees for generating not only wealth but also for growing together. And to achieve this goal, we will depend upon our ability for organizational innovation, perfection, speed and transparency" On the 1Oth day after Meghna, Aarti and Kabir addressed the employees, five employees representing all the workmen personally submitted their Charter of Demands to Meghna stating that before his death, they had spoken to Rahul Joshi and he had promised them that he would look into their demands and it was unfortunate that he died suddenly. Meghna assured them that she would earnestly look into it and revert to them in about 15-20 days. After the workmen representatives left her cabin, she again glanced through company's mission and vision statements and then moved over to read the contents of the Charter of Demands: 1. 30% average rise in the basic wages for all the workmen. The existing average basic wage is Rs.1500/p.m. The total number of workmen is 140. 2. 40% rise in Dearness Allowance per month. The current dearness allowance scheme is as follows: A. On 1st Rs. 100 basic salary=

B. On 2

nd

DA is Rs. 1200/-

Rs. 100 basic salary= DA is Rs. 600/-

C. On 3rd Rs. 100 basic salary= DA is Rs. 300/D. On 4th Rs. 100 basic salary= DA is Rs. 150/E. On every successive basic of Rs. 100= DA is Rs.150/3. Annual earned Leave which is now 12 days to be increased to 22 days. 4. Existing annual Sick leave of 10 days to be increased to 20 days. 5. Existing Casual Leave of 5 days to be increased to 10 days. 6. Company should follow "Sons of Soil" practice while recruiting workmen and sons and daughters of employees should be given preference for any vacancy among workers and staff with immediate effect. Meghna immediately formed a negotiations committee comprising of Vice-Presidents - Human Resource, Finance, Corporate Relations and Modernization and briefed them: • The company does not wish to change or modify the company's mission and vision statements not because Rahul Joshi, who is no more, masterminded them along with his team but because the company would strive to become a "world class organization" in next five years and that cannot happen if our people are not with us to make our dream a reality. • We like and appreciate the contribution of our workmen in achieving our goals and generating profits year after year. But yet our productivity is low among the comparable industries in two wheeler segment. Our dream shall shatter if the productivity is not raised by about an additional 8-9% in stages with in next 12 months.

Corporate Mission and Vision Statements

EI

• Prepare the existing financial burden as against a statement showing increased burden if all the demands are accepted and implemented. • Prepare grounds for win-win n.egotiations with the employees representatives. We don't want any confrontation with our workers • Prepare a report on an "Industry cum region practice" to see what other comparable industries are giving. • Prepare in details the counter demands of the company for collective bargaining. • All the members of company's negotiating team must workout one to one relationship with the representatives of workmen and seek their cooperation to settle all the above matters across the table. • Vice-President Human Resource should send a letter to the secretary of workmen representatives to hold the negotiation meetings on day to day basis after all of you have done your homework. The company would like to sign the settlement with in thirty days from the date of the first meeting. Prepare the time s,chedule and it should be on my table within next 24 hours. In case of any bottleneck or breakup in the discussions with workers, the committee should revert to me with their counter proposals and suggestions and take fresh mandate from me.

THE RIGHT PERSPECTIVE: Meghna visualized and assessed the situation right and in absolutely correct perspective from the construction, the clear thought process in the form of words used and the focus and the goals to be achieved enumerated in the mission and the vision statements, among others: 1. A clear and focussed goal to bridge the diversity of purpose, culture and the organizational values and to seek the cooperation and the contribution of all to strengthen the human capital as the most important organizational asset. 2. A clear and inspiring vision of the future. 3. A clear and accurate assessment of the work contained in strategic management plan. 4. A focussed strategy statement linking mission with vision, and presenting a clear roadmap to travel from present to future. 5. A specific and measurable strategic management plan to be a "world class organization" within five years linking vision, mission and strategy.

THE STRATEGIC THINKING: Meghna had her thought process were very clear. She had realised that to be strategically oriented she needs to monitor her external environment constantly and be prepared to shift gears fast, combining planning with entrepreneurship. She had the answers to 'why we are here 'and' where are we today'? Her own analysis of the present was essential, because it provides the true picture of today from where the company begins the journey towards the future. For her, the vision was a compelling but not controlling force that keeps her reminding where she wants to be. She remembered having read KWAN 'JZU (3rd century B.C) "When planning for a year, sow corn; when planning for a decade, plant trees; when planning for life, train and educate men". She decided to strengthen her human capital assets, educate and train them and grow together.

121

Human Resource Planning and Audit

SIMPLY SPEAKING .... 1. Mission: Defines the fundamental purpose of an organization or an enterprise, basically describing why it exists. 2. Vision: Defines the desired or intended future state of a specific organization or enterprise in terms of its fundamental objective and/or strategic direction. 3. Mission and Vision Statements are important for success of a business as they provide the current status of the business and a sense of direction on where does one want his business to go. Without a vision, one is like a crewless boat; adrift with no destination in sight. 4. Mission and Vision Statements do not have to be long and complex. Instead, it should be concise and extremely clear. If it is too complex, it will take too long in developing it. The best way forward is to brainstorm a few key phrases that would denote where one wants his business to head. 5. The mission and the vision statements, would keep one focussed on the task at hand - business success. 6. A vision statement basically will remind one what goals he has set for his business. It will also show others what is the business all about and how it is different from all other similar businesses. 7. A vision statement will align one and all people who work in the organization towards a common purpose. As a decision-maker, one will be able to make timely decision and less controversial one. 8. Once the mission and vision statements are ready, one would be more focussed towards attaining the goals. A vision Statement has to be combined with hard work, strategic thinking, smart planning and prudent decision-making. 9. Mission and Vision Statement are significantly essential for navigating business success.

CONCEPT OF WRITING MISSION AND VISION STATEMENTS BECAME POPULAR WITH STEPHON COVEY: THE SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE: 1. Being with End in Mind: Habit 2: "To begin with end in mind means to start with a clear understanding of your destination" says Stephon Covey. This is about habit 2 for setting long-term goals based on "true north" principles. Covey recommends formulating a "personal vision statement" to document one's perception of one's own vision in life. He sees visualization as an important tool to develop this. He also deals with organizational vision statements, which he claims to be more effective if developed and supported by all members of an organization rather than prescribed.

2. Every Goal is Created Twice: How you envision the outcome of your activity is essential to its final success. If you have a clear vision of exactly what you are working to achieve you can then create the list of action steps needed to get there. Every goal is created twice, first in your mind, second in reality.

Corporate MIsSion and V,sIOn Statements

B : ~

3. Visualisation: Visualizing the outcome of your project is the vital first step. Without having a firm grip on the outcome, it is impossible to know when you can stop. "Busy-ness" for the sake of being busy is not productive, it's spinning your wheels. When your goal is clear in your mind, and the project has been determined to be worth doing, i.e., you have outlined the "Why" of the goal; your next step is to set the conditions that define its successful completion.

4. Questions You ask Yourself: Here is a short list of questions that can help create the vision of a successful outcome: • What do I want the future to be? • What benefit do I want to give to my _ _ _ _? (family, company, career, etc.) • What returns do I seek? • What standards am I aiming at? • What values do I believe in? • What are my strengths, and how can I leverage them to success? • What weaknesses do I have in approaching and overcoming obstacles? • Are there potential opportunities for changing the plan to meet changing conditions? • How might this affect the outcome? • What might prevent me from reaching the best result? • What will the success of this goal mean in a year? In three years? • What is the best possible result of my activities? Once you have completed a realistic analysis of the opportunities for change, the next step is to decide precisely what the aim of your plan is. Deciding and defining an aim sharpens the focus of your plan, and helps you to avoid wasting effort on irrelevant side issues.

S. Ready-Fire, Aim-Fire: The aim is best expressed in a simple single sentence. When the goal of a project is clear and sharp in your mind, it is that much easier to communicate with the decision-makers and those who will be implementing your project. Your description of the outcome is the final mark on the yard-stick that you will be using to measure your progress through the plan's stages. When you have properly defined the outcome of the project you can then create and define specific activities and suo-goals to reach your objective.

6. Mission and Vision are Complimentary: You can present this aim as a 'Vision Statement' or 'Mission Statement'. Vision Statements express the benefit that an organization will provide to its customers. Mission Statements give concrete expression to the Vision statement, explaining how it is to be achieved.

7. Write Your Own Mission Statement: A personal mission statement is similar to that for a company or organization, in that it defines the values and principles that will be followed in the everyday activities and long-term planning. Having a written set of core values can be a very helpful tool in planning and executing your activities.

-

Human Resource Plannmg and Audit

How different would your life be if you had had a clear understanding of what was truly important to you five or ten years ago? Some of you reading now may have performed an exercise like this back then, and have gone on to create wonderful things. Others may never have heard of this process. We will work through it together and be better for it.

8. Sample Applications: Stephen Covey has a list of recommended activities for implementing this habit. Four of them are: 1. Look carefully at your list of values and principles. Does a pattern emerge? Is this really the person that you are? Or want to be? 2. Identify a project that you have coming up. Apply the principle of visualizing the final outcome. Write down the results that you desire and the steps that you need to take to achieve those results. 3. Look at every task you have this week with a new perspective. Visualize the best end result, and decide if this action will get you there. 4. Use the worksheet to create your own personal mission statement. Keep it handy and be prepared to revise it if necessary. Watch for opportunities to incorporate this mission statement into your daily interactions and decisions.

WHY WE USE MISSION AND VISION STATEMENTS? We use mission and vision statements to turn our dreams and plans into reality.

1. Common Uses: Mission and Vision Statements are commonly used to: Internal Uses:

• Guide management's thinking on strategic issues, especially during times of significant change; • Help define performance standards; • Inspire employees to work more productively by providing focus and common goals; • Guiding management decision-making; • Help establish a framework for ethical behaviour. External Uses:

• Enlist external support; • Create closer linkages and better communication with customers, suppliers and alliance partners; • Serve as a public relations tool.

2. Corporate Uses: Corporate uses are: • Greatly improved business focus. • Everyone has the same corporate/organizational view of the future - no misunderstandings. • Enhances the professional perception of business.

-

Corporate MIssion and Vision Statements

• Fosters a team oriented environment. • Enhances employee morale. • Helps attract and retain the best people. • Corporate decision-making. • Disaster management. • Image building. • Business expansion. • Diversification. • Strategic planning. • Talent management and employee retention.

3. What the Leaders of the World Say: Why We use Mission and Vision Statements? Wal-Mart's Sam Walton in Wal-Mart Way: In everything we do, we are driven by a common mission: To improve the quality of life for everyday people around the world. "The process is always the same. You need to know what you're looking for and then go look for it!" Robert Kiyosaki in his book "Rich Dad, Poor Dad" Rick Warren in "The Purpose Driven Life" asks us the question "What on earth am I here for?"and states "we were made for a mission."

Mission and Vision Statements

"Cherish your visions and your dreams, as they are the children of your soul, the blueprints of your ultimate achievements." Napoleon Hill

People often say that motivation doesn't last. Well, neither does bathing - that's why we recommend it daily." - Zig Ziglar Bob Proctor In the movie "The Secret" says we should ask ourselves "What do you really want? and How do you want your life to be?" Learn to visualize because, as Dr Denis Waitley says in the movie, "When you visualize, you materialize." "Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion." Jack Welch, Chairman, General Electric

A. PETER DRUCKER: 1. Mission's Ultimate Test is 'Right Action': The first thing to talk about is what missions work and what missions don't work, and how to define the mission. For the ultimate test is not the beauty of the mission statement. The ultimate test is right action.

2. Corporates Operate on Theory of Business: "Every organization operates on a theory of Business, that is, a set of assumption as to what its business is, what its objectives are, how it defines results, who its customers are, what the customer's value and pay for.

Human Resource Planning and Audit

3. Focus on Goals and Action: Starting with the mission and its requirements may the first lesson business can learn for successful non-profits. It focusses the organization on action. It defines the specific strategies needs to attain the crucial goals. It creates a disciplined organization. It along can prevent the most important common degenerative disease of organization especially large one: splintering their always limited resources on things that are "interesting" or look "profitable" rather than concentrating them on a very small number of productive efforts"

4. Business is defined by Mission: "My favourite mission definition, however, is not that of a non-profit institution, but of a business. It's a definition that changed Sears from a near bankrupt, struggling mail-order house at the beginning of the century into the world's leading retailer within less than ten years. Mission and Philosophy is the key starting point in business. A business is not defined by its name, statues or articles of incorporation. It is defined by business mission. Only a clear definition of the mission and purpose of the organization makes possible clear and realistic business objectives

S. Mission Statement Needs to be Operational: Almost every hospital I know says Peter Drucker, "Our mission is health care." And that's the wrong definition. The hospital does not take care of health; the hospital takes care of illness. You and I take care of health by not smoking, not drinking too much, going to bed early, watching our weight, and so on. The hospital comes in when health care breaks down. An even more serious failing of this mission is that nobody can tell you what action or behaviour follows from saying: "Our mission is health care." "A mission statement has to be operational, otherwise it's just good intentions. A mission statement has to focus on what the institution really tries to do and then do it so that, everybody in the organization can say: This is my contribution to the goal".

6. Mission is Setting Concrete Action Goals: "One of our most common mistakes is to make the mission statement into a kind of hero sandwich of good intentions. It has to be simple and clear. As you add new tasks, you de-emphasize and get rid of old ones. You can only do so many things. If you have 186 objectives, nothing ever gets done. I always ask: What's the one thing you want to do?

7. Leadership is lifting a Person's Vision: The first job of the leader is to think through and define the mission of the institution. "Leadership is lifting a person's vision to higher sights, the raising of a person's performance to a higher standard, the building of a personality beyond its normal limitations. The most common question I am asked: What are the qualities of a leader? The question seems to assume that leadership is something you can learn in a charm school. But it also assumes that leadership by itself is enough, that it's an end. And that's misleadership. What matters is not the leader's charisma. What matters is the leader's mission.

S. Vision needs to be Specific and Measurable: Vision is a picture of what the organization is trying to accomplish in carrying out its purpose. It describes how the organization intends to focus its role or "business" in the future. It answers the question, "What are we trying to create or achieve?" The vision statement should describe what will

III

Corporate Mission and Vision Statements

be accomplished, where and for whom. While purpose tends to be abstract, vision is specific and measurable or at least assessable.

9. Vision is Unique: While purpose may not be unique, vision is unique and differentiates the organization from others. The perceived gap between your organization's vision and its current reality is the source of the emotional energy that drives its actions.

10. Vision cannot be Synonymous with Mission: Purpose and vision are often used synonymously with mission. This approach has some pitfalls. USing only the purpose as the mission statement does not communicate what the organization does or what it wants to accomplish.

11. Vision and Mission Statements are Complimentary: Using only the vision as the mission statement leaves out why the organization is engaged in this activity and why people should be committed to it. Combining purpose and vision creates a more meaningful mission statement describing why the organization exists and what it intends to accomplish. The mission statements are capable of generating commitment from its sense of purpose and emotional energy from the vision statements.

B. CHRISTOPHER BART: Although, biological metaphors have become commonplace in the organization science literature, Bart (1997), in a Business Horizons article entitled, "Sex, Lies, and Mission Statements," advances the analogy to a vividly descriptive level. He likens mission statements to the "libido" or "sex drive" of a company, inferring that mission statements not only inspire passion and personal pleasure in the firm, but also compel organizationally beneficial activity. While the simile may be novel, the theoretical underpinnings of the comparison are not. One need not look beyond basic business policy textbooks to find the assertion that mission statements, as a strategic planning and management tool, provide the basis for organizational performance and indeed, organizational survival. For example, Miller and Dess (1996) model the relationship between mission statements and the fate of a firm by specifying the intermediate linkages as follows: Mission Statement Objectives

~

Operationalisation of Behaviour ~

Goal Directed Employee

~

Firm Performance

Firm Survival

~

•

A frequently repeated definition of a mission statement is that it is, "a broadly defined but enduring statement of purpose that distinguishes the organization from others of its type and identifies the scope of its operations in product (service) and market terms" (Pearce, 1982, 15). Formulation of such a statement appears to have evolved into a prerequisite of doing business, as a Bain and Company annual survey has consistently reported "mission statements" are the most common management tool out of a collection of over 25 tools, and that over 90% of companies have had a mission statement sometime within the last five years.

-

Human Resource Plannmg and Audit

Recognised as "the starting point for a corporate identity programme," mission statements are described as wielding significant influence over organizational performance (Leuthesser and Kohli, 1997). As Bart and Tabone (1998) summarize, "in recent years, mission statements have become recognized in modern management theory as one of the cornerstones of an organization. The conclusion of most commentaries on mission statements is that they are an essential factor contributing to an organization's enduring success"

C. BAIN AND CO: Boston-based Bain and Company recently reported that of the 400 firms it surveyed, nine out of ten had used a mission statement some time in the last five years thus, making it the most popular management tool deployed in recent decades. The reason for such popularity is that mission statements are usually considered the cornerstone of every company's strategy formulation exercise. Most commentaries on mission statements imply that superior performance results follow shortly after inception. Little evidence exists, however, that proves their true value. Most studies have tended to focus almost exclusively - even obsessively - on their content. None has attempted to compare prescription with practice and only a few have tried to link findings about mission statements to any measures of performance or satisfaction. Although, it would be a stretch to claim that the field has established consensus on the essential skeletal components of an effective mission statement, over a decade ago. Peasce and David's (1987) ground-breaking study concluded that higher performing firms have comparatively more comprehensive mission statements amongst a sample of Fortune 500 companies.

D. DE GEUS: De Geus's book "The Living Company: Growth, Learning, and Longevity in Business" has been widely recognized as one of the most important management books of the decade (Zhu, 1999, p.28). The essence of de Geus' argument is as follows: Research Objective 1: In the exploratory genre of previous mission statement studies, specific types of purpose, strategy, values, and behavioral standards will be correlated with organizational longevity to assess the degree to which specific mission statement components are related to the life expectancy of companies. Research Objective 2: A regression analysis will be conducted to attempt prediction of lifespan according to de Geus' theoretical formulation. Specifically, it is proposed that mission statement references to certain ideas (community, fiscal conservatism, learning/developing and adapting), as well as certain corresponding financial measures (leverage/debt utilization and research and development expenditures) will predict lifespan.

CONCLUSION: Bart (1999) concluded, however, that sufficient evidence now existed to "challenge those critics and cynics who liked to pronounce (unjustifiably) that mission statements were not important or that there was no direct link between a mission statement and performance."Based on the results of our study, we would caution that claiming such a victory might be premature".

Corporate MIssIOn and VIsion Statements

III·

Instead, we would concur with Bart's (2000) most recent admission that "performance-based empirical evidence [on the relationship between mission statements and organizational outcomes] is ... very thin" Indeed, this study is not the first to cast doubt on the relationship or impact of mission statements and outcomes (see David (1989) who examined earnings, ROI, and earning per share; and Klemm et. aI., (1991) who examined profit and turnover}.

MANAGEMENT GURUS SPEAK: DEFINING MISSION AND VISION STATEMENTS:

MISSION IS ENDURING STATEMENT OF PURPOSE: A company's mission is an enduring statement of purpose that distinguishes its business from its peer firms, identifies its scope of operations, embodies its business philosophy and reflects the image it seeks to project The mission statement answers the first question of any business venture: What business is it in and what is its reason for being? Establishing this purpose in black and white must come first in order to provide a sense of direction to the company. Companies that do not have a clear and concise written mission statement risk wandering aimlessly in the sea of competitors.

A. JACK WELCH 1. Mission Balances Possible and Impossible Jack Welch, Ex-Chairman and CEO OF General Electric (GE) in his book "Winning" says "Effective mission statements balance the possible and the impossible" he continues, "they give the people a clear sense of the direction to profitability and inspiration to feel they are part of something big and important".

2. How do we intend to win in business? An effective mission statement basically answers one question: How do we intend to win in this business? It does not answer: What we did used to be good in the good old days? Nor does it answer: How can we describe our business so that no particular unit or division or senior executive gets pissed off? "Instead, the question "How do we intend to win in this business?" is defining. It requires companies to make choices about people, investments, and other resources, and prevent them from falling into the common mission trap of asserting they will be all things to all people at all time.s".

3. Top Management Responsibility: Jack 'Welch, during his forty years tenure with GE, always and emphatically maintained that "setting the mission is the top management's responsibility". During a meeting with his top management team at GE, he categorically added while making a presentation on "GE and Emerging Markets", that "a mission cannot be delegated to anyone except the people ultimately held accountable for it".

B. IRELAND AND HILL: Ireland and Hill (1992) in "Mission Statements: Importance, Challenge, and Recommendations for Development" observe that the "mission statement should include the organizations goals, purpose, product and market scope and philosophical views".

-

Human Resource Planning and Audit

C. DAVIES AND GLAISTER: Davies and Glaister (1997) in "Business School Mission Statements-The Bland Leading the Bland" believe that a "mission statement should include the organizations statement of purpose and inspirational view for the future".

D. BARTKUS, GLASSMAN AND McAFEE: One of the better practical definitions has been provided by Bartkus, Glassman and McAfee (2000) in "Mission Statements: Are They Smoke and Mirrors?", state a "mission statement is a statement to communicate a description of the firm to its current and prospective stakeholders to determine if they want to be involved with it".

E. JUSTICE, THOMAS AND DAVID W. JAMIESON: Justice, Thomas and David W. Jamieson (1999) in "The Facilitator's Field Book" state that the "framework for the development of a mission statement should begin with the organizations primary purpose, target market, core products or services, critical values and measures of success".

F. PEARCE, J: Pearce J in his article "The Company Mission as a Strategic Tool" observed that a "mission statement can be defined as an enduring document of purpose that distinguishes one business from other firms of its type. A mission statement is a declaration of an organization's business or "reason for being." He further elaborated the concept stating that "a clear statement of a company's mission is essential to effectively establishing objectives, formulating strategies, setting goals, devising policies, allocating resources, and motivating employees".

G. PEARCE J AND RICHARD B. ROBINSON: In 'Strategic Management: Formulation, Implementation and Control', Pearce and Robinson stated that "a mission statement embodies the "business philosophy of the firm's strategic decision makers, implies the image the firm seeks to project, reflects the firm's self-concept and indicates the firm's principal product or service areas and the primary customer needs that the firm will attempt to satisfy".

H. ZALEZNIK, A.: Zaleznik in 'Power and Politics in Organizational Life' found that effective organizational "missions" help to satisfy people's needs to produce something worthwhile, to gain recognition, help others, to beat opponents or earn respect.

I. QUINN, J.B.: Quinn in 'Strategies for Change: Logical Incrementalism' observed the "firms must distinguish themselves from all others in the competitive environment. So far, at least, the mission statement must transcend the criteria usually attributed to objectives such as measurable, achievable, etc. in that it should lift the firm above its present state.

J. BART,C. K AND BATEZ, M. C.: Bart and Batez in "The Relationship between Mission Statements and Firm Performance: An Exploratory Study observed that "'A good mission statement captures an organization's unique and

Corporate MIssIOn and VIsIon Statements

III

enduring reason for being and energizes stakeholders to pursue common goals. It also enables a focused allocation of organizational resources because it compels a firm to address some tough questions: what is our business? Why do we exist? What are we trying to accomplish?"

K. STONE, R.: Stone in his article "Mission Statements Revisited" (1996) observed "Corporate mission statements ... are the operational, ethical and the financial guiding lights of companies. They are not simply slogans and mottos; they articulate the goals, dreams, behaviour, culture and strategies of companies.

L. ABRAHAMS JEFFREY: In "Mission Statements Book" (1995) Abrahams defined a mission statement as "an enduring statement of purpose for an organization that identifies the scope of its operation in product and market terms and reflects its values and priorities"

M. THOMPSON and STICKLAND: In the book "Strategic Management: Concepts and Cases (1996), Thompson and Stickland stated that "a mission defines a company's business and provides a clear view of what the company is trying to accomplish for its customers"

N. MILLER: Miller (1998) states that obligations to stockholders and sources of competitive advantage should also be the agenda (in addition to the scope of the business and a view of the future).

O. LUCAS: Lucas (1998) prefers the term "vision statement" for a company declaration phrase that not only encompasses the core values, core competencies, and future goals, but inspires, guides, and controls as well.

SIMPLY SPEAKING .... 1. A company's mission is an enduring statement of purpose that distinguishes its business from its peer firms, identifies its scope of operations, embodies its business philosophy and reflects the image it seeks to project The mission statement answers the first question of any business venture: What business is it in and what is Its reason for being? 2. Mission statement embodies the "business philosophy of the firm's strategic decisionmakers, implies the Image the firm seeks to project, reflects the firm's self- concept and indicates the firm's principal product or service areas and the primary customer needs that the firm will attempt to satisfy" 3. We use mission and vision statements to turn our dreams and plans into reality.

III

. Human Resource Plannmg and AudIt

. LEVEL fOUR'

MISSION STATEMENT MODELS MANAGEMENT GURUS SPEAK: The analysis of the definitions of the mission and vision statements attributed by the management gurus and theorists lead us to conclude as to what should be the contents of the statements when we sit down to design, write and give shape to our corporate and organizational or even personal mission statements. A mission statement must be an enduring statement of purpose which must: • Focus on goal setting and action in establishing objectives, formulating strategies, setting goals, devising policies, allocating resources and motivating employees. • Reflect philosophy purpose, core products and services and market scope. • Reflect core values and core competencies. • Give people a clear sense of direction to profitability and inspiration then they belong to an organization. • Reflect organizational critical values and measures of success. • Communicate to its current and prospective stakeholders to get involved for the benefit of the company. • Articulate goals, dreams, behaviour, culture and strategies of a company. • Reflect a clear view of what the company is trying to accomplish for its customers. • Help satisfy people's needs to produce something worthwhile, to gain recognition, and help others, to beat opponents or earn respect.

1. PETER DRUCKER: PURPOSE and STRATEGY: Peter Drucker in "Management: Tasks, Responsibilities, Practices" (1974) observed that the "mission is carried through commitments to action in the form of objectives and that the objectives should be operational. Objectives are the fundamental strategy of business. Purpose and strategy are the two key components of a mission and therefore of the mission statement.

2. CHRISTOPHER BART: TWENTY-FOUR COMPONENTS: Christopher Bart in "Mission Matters" proposed twenty -four components/ contents that make up a mission statement: • Purpose. • Concern for satisfying customers. • General corporate goals. • Values and philosophy. • Distinctive competence. • Concern for satisfying employees. • Business definition. • Concern for satisfying shareholders.

Corporate MIssion and VIsion

Statement~

• Competitive strategy. • Desired public image. • Behaviour standards. • Non-financial objectives. • Specific products offered. • Specific markets served. • Concern for satisfying society. • Concern for satisfying suppliers. • Specific financial objectives. • Technology defined. • Location of business. • Desired competitive position. • Mention of stake holders. • One big goal. • Self-concept. • Vision statement.

3. PEARCE, J. and DAVID, F.: EIGHT COMPONENTS: Pearce and David in "Corporate Mission Statements: The Bottom Line" (1987) identified eight key components of mission statements: • The specification of target customers and markets. • The identification of principal products and services. • The specification of geographic domain. • The identification of core technologies. • The expression commitment to survival, growth and profitability. • The identification of key elements in company philosophy. • The identification of the company self concept. • The identification of firm's desired public image.

4. JUAN, D. K.: CONCERNS TO ACTION: Juan, D.K. in "Components of Mission Statements: Relevance in 21 st Century" (1997) mentioned nine characteristics or mission statement components. Since a mission statement is often the most visible and public part of the strategic management process, it is important that it include most, if not all, of these essential components. Components and corresponding questions that a mission statement should answer are given here: 1. Customers: Who are its enterprise's customers? 2. Products or services: What are the company's major products or services? 3. Markets: Where does the firm compete? 4. Technology: What is its basic technology?

,.

} ", .................. ::

Human Resource Plannmg and Audit

5. Concern for survival, growth, and profitability: What is the company's commitment towards economic objectives? 6. Philosophy: What are the basic beliefs, core values, aspirations and philosophical priorities of the company? 7. Self-concept: What are its major strengths and competitive advantages? 8. Concern for public image: What is the company's public image? 9. Concern for employees: What is the its attitude/orientation towards employees?

S. CAMPBELL, A.: ASHRIDGE MISSION MODEL: Campbell in "The Power of Mission: Aligning Strategy and Culture" (1992) mentioned four components/contents for his Ashridge mission model. The Ashridge Mission Model (Campbell) PURPOSE Why the company exists

EMPLOYEE VALUES Employees'

pe""oo' STRATEGY The competitive position and distinctive competence

i"'"

COMPANY VALUES What the company believes in

STANDARDS AND BEHAVIOURS The policies and behavioral pattems that underpin the distinctive competence and the value system

The model" is based on research conducted in 53 large companies by the Ashridge Strategic Management Centre. Its founding director, Andrew Campbell, has spent much of his professional career studying mission statements. Campbell's framework of four important mission statement dimensions has come to be known as the Ashridge Mission Model.

1. What is Ashridge Mission Model? Managers and employees are occasionally searching for a purpose and a sense of identity. They want more than just pay, safety and an opportunity to develop their skills. They want a "Sense of Mission". In fact there are a number of functions that a Mission can have in any organization. These can be internal and external and include to: 1. Inspire and motivate managers and employees to higher levels of performance. (Sense of Mission) 2. Guide resource allocation in a consistent manner. 3. Help balance the competing and often conflicting interests of various organizational stakeholders. 4. Provide a sense of direction. 5. Promote shared values amongst employees. 6. Refocus on organization during crises. 7. Improve corporate performance.

Corporate MIssIon and VisIOn Statements

A Mission Statement is an articulation of a company's mission. An often-used definition of a mission statement is: "a broadly defined but enduring statement of purpose that distinguishes the organization from others of its type and identifies the scope of its operations in product (service) and market terms" According to Campbell, mission statements frequently do more harm than good because they imply a sense of direction, clarity of thinking, and unity that rarely exists. Instead of uplifting employees with elevating ideals, they encourage cynicism. The Ashridge Mission Model from Andrew Campbell is a method that can be used to create or analyse a mission, sense of mission and mission statement. The Ashridge model integrates two historic schools to determine a mission: 1. The Strategic School: A Mission is primarily seen as the first step in the strategy process. It defines the business's commercial rationale and target market. 2. The Cultural/Philosophy/Ethics School: A Mission is primarily seen as an expression or statement that should ensure good cooperation between employees. It is cultural glue which enables an organization to function as a collective unity.

2. Four Elements of Ashridge Model: The Ashridge Mission Model contains the following four elements which should be linked tightly together, resonating and reinforCing each other to create a strong mission: 1. Purpose. Three categories: • For the benefit of the shareholders • For the benefit of all its stakeholders • For the benefit of a higher ideal, going beyond merely satisfying the needs of its stakeholders. 2. Strategy. The commercial logic for the company. Strategy links purpose to behaviour in a commercial, rational, left-brain way. 3. Values. The beliefs and moral principles that lie behind a company's culture. A sense of mission occurs when employees find their personal values aligned with the organizational values. Values give meaning to the norms and behavioural standards in the company. Values are strong motivators to act in the best interests of the purpose of the company. They can provide a rational behavior that is just as strong as strategy, but in another, emotional, moral, ethical and right-brain way. It is for this reason that the Ashridge framework has a diamond shape. 4. Policies and Behavioural Standards. Guidelines to help people to decide what to do on a dayto-day basis.

3. Usages of the Ashridge Mission Model in Application: • Helps to think clearly about mission . • Helps to discuss mission with colleagues. • Both for developing a new mission and analysing an existing mission. • A corporate mission must not be confused with a corporate vision. A vision is a mental image of a possible and desirable future state of the organization.

4. Steps in the Process in Ashridge Mission Model: There are ten questions by which one can measure the quality of a mission statement are:

III

Human Resource Planning and Audit

1. Purpose: 1. Does the statement describe an inspiring purpose that avoids playing to the selfish interests of the stakeholders - shareholders, customers, employees, suppliers? 2. Does the statement describe the company's responsibility to its stakeholders?

2. Strategy: 3. Does the statement define a business domain and explain why it is attractive? 4. Does the statement describe the strategic positioning that the company prefers in a way that helps to identify the sort of competitive advantage it will look for?

3. Values: 5. Does the statement identify values that link with the organization's purpose and act as beliefs that employees can feel proud of? 6. Do the values 'resonate' with and reinforce the organization's strategy?

4. Behavioural Standards: 7. Does the statement describe important behavioural standards that serve as beacons of the strategy and the values? 8. Are the behavioural standards described in such a way that individual employees can judge whether they have behaved correctly or not?

5. Character: 9. Does the statement give a portrait of the company and does it capture the culture of the organization? 10. Is the statement easy to read?

s.

Strengths and Advantages of the Ashridge Mission Model: 1. Combines strategic and cultural motivators to guide an organization. 2. The model is particularly useful to ensure that a company has a clear mission and it has employees with a strong sense of mission. 3. Like the 7-S Framework of McKinsey, the Ashridge Mission Model emphasizes the need for a fit between strategy and values. Additionally, the Ashridge model recognises the importance of the link between the organizational shared values and the private values of employees and managers. 4. Improves decision-making. Raises energy levels. Reduces the need for supervision. Promotes constructive behaviour. Increases satisfaction and loyalty. 5. Puts corporate purpose as the corner stone and starting point of mission.

6. Limitations of the Ashridge Mission Model: 1. Having inappropriate values or an inappropriate sense of mission is a powerful negative influence on employee behaviour. 2. Shared values and sense of mission often are extremely difficult to change and can become an obstacle for change. 3. Strongly shared values or a strong sense of mission can lead to an insularity that becomes xenophobic.

III

Corporate MIssIOn and Vision Statements

4. Creating a mission statement is often a time-and resources-consuming process. 5. A mission paper may be a 'paper tiger'.

7. Assumptions of the Ashridge Model: • Committed employees and teams perform more efficiently and more effectively than apathetic employees and teams do. • People connect themselves more easily to values than to abstract strategic concepts. A mission must be clearly defined and managed. An intuitive understanding of mission is not enough. Table 3.1 How Ashridge Mission Model Works? Components of Mission Statement

1. 1. 2. 3.

PURPOSE Customers/clients/users

Investors/shareholders/owners Community/society

2. STRATEGY 1. How does the company pursue its strategic objectives?

2. How does one identify the commercial rationale for the business?

3. VALUES 1 . What does the company believe in? 2. Setting priorities and basic beliefs, aspirations and philosophical priorities and moral rationale for business.

4. STANDARDS OF BEHAVIOUR 1. How does it act or behave? and fairly.

Key Mission Statement Terms

1. 2. 3. 4. 5. 6.

Why does the company exist? What is its reason for being?

1.

Fiscal approach Market share Leverage

2. 3. 4. 5. 6. 7. 8.

For whose benefit does it exist? Employers/associates/workers Management Suppliers

Sales, Profit, Return Competition dominance Long term perspectives Global perspectives Research and Development

1. 2. 3. 4. 5. 6.

Cost consciousness Social responsibility Accountability Commitment Employee well-being and Quality of life Training and Development and learning

1. 2. 3. 4. 5. 6. 7. 8.

Ethically, morally, honestly Professionally Aggressively Improvement oriented Winning and achieving Adapting and responding Innovating Empowering

-

Human Resource Plannmg and Audit

McKINSEY: 7 S FRAMEWORK: 1. What is the 7-5 Framework?

The 7-S Framework of McKinsey is a management model that describes 7 factors to organize a company in an holistic and effective way. Together these factors determine the way in which a corporation operates. Managers should take into account all seven of these factors, to be sure of successful implementation of a strategy. Large or small. They're all interdependent, so if we fail to pay proper attention to one of them, this may affect all others as well. On top of that, the relative importance of each factor may vary over time.

2. Origin and History of the 7-5 Framework: The 7-S Framework was first mentioned in "The Art Of Japanese Management" by Richard Pascale and Anthony Athos in 1981. They had been investigating how Japanese industry had been so successful. At around the same time that Tom Peters and Robert Waterman were exploring what made a company excellent. The Seven S model was born at a meeting of these four authors in 1978. It appeared also in "In Search of Excellence" by Peters and Waterman, and was taken up as a basic tool by the global management consultancy company McKinsey. Since then it is known as their 7S model.

3. The Meaning of the 7-5 Framework 1. Shared Values: The interconnecting center of McKinsey's model is: Shared Values. What does the organization stands for and ·what it believes in. Central beliefs and attitudes. 2. Strategy: Plans for the allocation of a firms scarce resources, over time, to reach identified goals. Environment, competition, customers. 3. Structure: The way in which the organization'S units relate to each other: centralised, functional divisions (top-down); decentralised; a matrix, a network, a holding, etc. 4. Systems: The procedures, processes and routines that characterize how the work should be done: financial systems; recruiting, promotion and performance appraisal systems; information systems.

Corporate MIssion and VIsion Statements

5. Staff: Numbers and types of personnel within the organization.

S. Style: Cultural style of the organization and how key managers behave in achieving the organization's goals. 7. Skills: Distinctive capabilities of personnel or of the organization as a whole.

4. Strengths/Benefits of the 7-5 Model: • Diagnostic tool for understanding organizations that are ineffective. • Guides organizational change. • Combines rational and hard elements with emotional and soft elements. • Managers must act on all Ss in parallel as all Ss are interrelated.

S. How to use the Model? The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change. Whatever the type of change - restructuring, new processes, organizational merger, new systems, change of leadership, and so on - the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration. We can use the 7-S model to help analyze the current situation, a proposed future situation and to identify gaps and inconsistencies between them. It's then a question of adjusting and tuning the elements of the 7-S model to ensure that organization works effectively once we reach the desired endpoint. Sounds simple? Well, of course not: all! Whole books and methodologies are performance and managing change. The questions - but it won't give you all the knowledge, skills and experience.

Changing your organization probably will not be simple at dedicated to analysing organizational strategy, improving 7-S model is a good framework to help you ask the right answers. For that you'll need to bring together the right

6. 7-5 Checklist Questions: Here are some of the questions that you'll need to explore to help you understand your situation in terms of the 7-S framework. Use them to analyse your current situation first, and then repeat the exercise for your proposed situation. Strategy: • What is our strategy? • How to we intend to achieve our objectives? • How do we deal with competitive pressure?

-

Human Resource Plannmg and AudIt

• How are changes in customer demands dealt with? • How is strategy adjusted for environmental issues?

Structure:

• How is the company/team divided? • What is the hierarchy? • How do the various departments coordinate activities? • How do the team members organize and align themselves? • Is decision-making and controlling centralized or decentralized? Is this as it should be, given what we're doing? • Where are the lines of communication? Explicit and implicit? Systems:

• What are the main systems that run the organization? Consider financial and human resource systems as well as communications and document storage. • Where are the controls and how are they monitored and evaluated? • What internal rules and processes does the team use to keep on track? Shared Values:

• What are the core values? • What is the corporate/team culture? • How strong are the values? • What are the fundamental values that the company/team was built on? Style:

• How participative is the managemenVleadership style? • How effective is that leadership? • Do employees/team members tend to be competitive or cooperative? • Are there real teams functioning within the organization or are they just nominal groups? Staff:

• What positions or specializations are represented within the team? • What positions need to be filled? • Are there gaps in required competencies? Skills:

• What are the strongest skills represented within the company/team? • Are there any skill gaps? • What is the company/team known for doing well? • Do the current employees/team members have the ability to do the job? • How are skills monitored and assessed?

Corporate MIssion and V,s,on Statements

SIMPLY SPEAKING... Using the information you have gathered, now examine where there are gaps and inconsistencies between elements. Remember you can use this to look at either your current or your desired organization. 1. Start with your shared values: Are they consistent with your structure, strategy, and systems? If not, what needs to change? 2. Then look at the hard elements. How well does each one support the others? Identify where changes need to be made. 3. Next look at the other soft elements. Do they support the desired hard elements? Do they support one another? If not, what needs to change? 4. As you adjust and align the elements, you'll need to use an iterative (and often time consuming) process of making adjustments, and then re-analysing how that impacts other elements and their alignment. The end result of better performance will be worth it.

-

Human Resource Plannmg and Audit

LEVEl. FIVE THEORIES OF MISSIONNISION STATEMENT

1., PERSONAL MISSION THEORY: KEVIN LIM: Kevin Lim studies and shares his interest in the wide-ranging aspects of management of growth, cultural affordances of technology, focusing particularly on the pedagogical aspects of social media. Through the use of popular culture, he makes it easy to understand various online phenomena via his blog. Kevin is a social and budding management thinker and an aggressive online businessman in property, real estate and photography. Presently in the field of communication, his research work has ranged from the anti-censorship of China, multi-dimensional regulation of online spam, social capital among non-profit organizations, and the influence of blogs on purchasing decisions. He also gives social media related workshops and produces user-centric guides at the Teaching and Learning Center (TLC), located in the University at Buffalo of the State University of New York. He believes that until we write our personal mission statement, we may not have the pleasure of achieving an ultimate corporate mission and the vision statement for future strategic planning. Read him through and between the lines:

IN SEARCH OF GUIDING FORCE: "I believe that we often end up being unhappy with what we're doing not because of where we are, but because of how we don't really know where we wanted to go in the first place. It's so important to have some form of direction in life, and while it's hard to figure out our longterm plans, it's better to just have something good enough to get by. Making a judgement call, even if it's not the best one, is better than not making one at all. As students, we often get people asking us what we're doing now and where we plan to go for our future. Stating a clear course of action, even if difficult or unsure, gives others something to hold onto and remember us by. As with all things in life, nothing ever works in a straight line, so I accept that change is inevitable and as such, totally excusable. Before embarking on my dissertation quest, it became a natural for me build my personal mission statement so I could see what I wanted in life (e.g., career). Dissertation writing should become more passionate, which in turn makes the research more effective. This goes well with Alex Halavais' idea of how writing a dissertation should be like coming up with a book you've always wanted to write. Thing is I get bored easily, so finding something really unique is going to be my challenge. Over at 43 things, about 60 people pledged to write a personal mission statement. After reading some of their tips, I got started by using Franklin Covey's Personal Mission Builder."

PERSONAL MISSION STATEMENT: Here's my "Personal Mission" Statement for providing "vision" to my life: To find happiness, fulfillment, and value in living I will: REVERE admirable characteristics in others, such as being ambitious, committed, creative, enthusiastic, educated, and self-reliant, and attempt to implement similar characteristics in my own life.

Corporate MIsSIOn and VIsIOn Statements

-

RECOGNIZE my strengths and develop talents as a person who is a creative thinker, decisionmaker, good with words, good at sensing needs, good at making things happen, and working well with people. UTILIZE these talents in things I love to do, especially .. .fixing, writing, reading, blogging, swimming, running, playing tennis, and listening to music. ENVISION myself becoming a person who: My Dad thinks is compassionate, creative, and educated. My Mom thinks is educated, creative, and responsible. Penny thinks is ambitious, caring, and enthusiastic. And I Will Remember "What Matters Most to Me" 20 years from now, I hope to be surrounded by the most important people in my life. This is who they are and what I plan to be doing: The most important people in my life include my parents, my siblings and my girlfriend. I would be in a reputable career which engages my passions and makes enough for me to take care of those I love. If a six inch steel beam were placed across two skyscrapers, this is what I would be willing to cross for: Above all else, I would cross to save a life. If I could spend one day in a great library studying anything I wanted, this is what I would study: I would love to study science fiction (is that possible?) This is what I feel represents me, and why: A cat would represent me best since it is smart and agile. This is a time when I was deeply inspired: When I saw greatness within the simplest of things. If I could spend one hour with any person who ever lived, this is who it would be, and what I would ask: Steve Jobs, simply because he seems to have found a balance in life, yet remains mysteriously interesting. I would ask him what he looks for in life. I'm still not sure if this gives me the clarity I seek, so perhaps you could supplement it by telling me things I might not realize about me. Getting feedback and improving on this statement is something I see as a continuous process. Perhaps we can all help each other out. Start by building your own Personal Mission Statement today!

2. REAL LIFE LEADERSHIP THEORY: KATES BRANDON: Real life leadership: mission statement defines aim of a business, values statement the philosophy "I've been dealing with Mission, Vision and Values statements for a dozen years. Here is how I've come to understand their usefulness to leaders"

-

Human Resource Plannmg and Audit

Values

I

RELATIONSHIPS Vision

,,.....--------, ~

~

Mission

ORGANIZATIONAL STRUCTURE

A. Mission Statement: A Connecting Link: A mission statement connects the fundamental ideas of the purpose and design of the business to the structure of the business. If your mission lacks clarity, you may find your organization floundering just doing things because you've always done them. When an organization loses its sense of mission, it simply becomes a place where business processes are conducted. This is particularly true in large complex organizations that find it easy to get "silo-ed" into separate functioning units that have little relationship to the others. "A number of years ago I did a project for a hosiery mill. We were dealing with changing their production process. There were seventeen steps in the process of making a pair of socks. None of the people at one stage knew what the people at the stage before or after did. It didn't matter to them. All that mattered was their specific task. Their relationship to the company lacked a clear sense of mission. As a result, they just showed up did their job and left. The company implemented a different approach which linked together the seventeen steps in a meaningful way that reduced cost, inventory and increased efficiency. In the end though, it was too little too late, and the company closed. When the mission or purpose of an organization is severed from the work of the business, you end up with a collection of little fiefdoms, each protecting their little piece of turf. By work I'm talking about everything that goes into the organizational structure, governance, programme (products and services), operations and resource development. So, it is vital that business have a clear sense of mission, and that mission be clearly structured throughout their business. B. Vision Statement: Provides Perspective: A vision statement is different than a mIssIon statement. Where the mission Statement conceptualizes the organizational structure of the business, a vision statement provides a perspective on how people work within that structure to create impact. When we focus on impact, or the difference a person or process makes, we are seeing positive change occur. When the people of an organization understand the potential that their contribution has, then a picture, a vision, of the ultimate benefit of the organization can be realized. C. Vision Statement: An Action Statement: A vision statement is an action statement. It says, "We see this taking place through the work of the people of XYZ Company." It is the difference between a formal portrait of the CEO and a video of people interacting with one another and with their customers. A mission statement touches more left brain, logical thought about a business. An ideal vision statement is more right brain allowing for a more creative picture of the effect of the business upon the people who receive its products and services and those who produce and provide them.

Corporate MIssIOn and VIsion Statements

D. Vision Statement: A Picture of Change: A Vision statement is a picture of change. It you can't show the difference that you seek to create, then you don't have a vision. The key to understanding a vision is: understanding the actions of people within the structure of your organization. If you were able to take every little action that people do in the course of a typical day, and look at it from the standpoint of the impact that this creates for your market, then you are beginning to understand what a vision truly is. E. Vision Statement: Clarifies Mission: A Vision statement should clarify your Mission by making it real, less analytical, less dry. It should inspire people to take pride in what they do. However, if your Vision is not dOing that, then the problem may be at the Values side of the diagram. RELATIONSHIP Values

J

Action

IMPACT Ethical

s~ndards I

Shared Values

IDEAS

7

Value Statements

ORGANIZATIONAL STRUCTURE

F. Value: Shared Values of a Company: A values statement is very different from a mission or vision statement. It is not primarily focused on the externals of the business. Rather, it is focused on those ideas that unite people together with a common understanding of what the business stands for. If the mission of the organization is not clear, then quite possibly the leadership lacks a clear sense of what the company stands for. We normally think of values in ethical terms. In this sense these values provide a social boundary for what is appropriate behaviour for the company. The values of a company develop over time and become the standard by which the organization is judged. If, to the founders, trust was a core value of the company, then decisions and actions throughout the company will be focused on how they either enhance the expression of trust or diminish it. In the above diagram, you can see a bit of how values function in an organizational setting. First, values that are essential to the health of the business become shared values thl:lt have meaning and application within the relationships associated with the company. If you have a strong values statement, then you will attract people who want to work for a company who believes in those values. If the values are just words on paper, then those people who come to a company expecting one type of experience and finding another will leave and go somewhere else. It is important, therefore, that the values are embedded in the policies and practices of the organization.

-

Human Resource Plannmg and Audit

The company's values must be integral to the organization's governance, programme, operations and resource development policies and practices.

A values statement articulates the shared values of the company. That statement becomes the foundation of the ethical standards by which the company operates. Those same values become the character of the work that takes place in the company. If the values are built on trustworthiness, pride in performance and excellence in all that each person does, then that is what people will see in the activity of the organization.

G. Values Statement: Not Abstract Principles: When we talk about values, we are not simply talking about a set of abstract philosophic principles that make people feel good. We are also setting a standard for personal conduct as a member of the organization's community. If we share the value of trust in relationships, then when that trust is broken, we look to reestablish that trust because it is important in every aspect of what we do. "The difference between a values statement and mission and vision statements is more than the language. It is the difference between someone working hard at what they do and someone who works with a passion for doing their very best. A values statement addresses the human dim~nsion that exists in every organization. The mission and vision Statements address the organizational structural dimension."

H. Develop an Organizational Value Statement: If your organization lacks a values statement, let me suggest that you consider creating one. It may just be the difference between success that is sustainable and success that is just luck being the in the right place at the right time. The process is similar to the creation of mission and vision Statements. It needs to be a process that involves people in conversation about what the company stands for and how that gets applied in aspects of the business.

3. STRATEGIC MANAGEMENT THEORY: SARK H. M. An organization's mission statement describes what the organization stands for and why it exists. It explains the overall purpose of the organization and includes the attributes that distinguish it from other organizations of its type. An organization's internal environment is composed of the elements within the organization, including current employees, management, and especially corporate culture, which defines employee behavior. Although some elements affect the organization as a whole, others affect only the manager. A manager's philosophical or leadership style directly impacts employees. Traditional managers give explicit instructions to employees, while progressive managers empower employees to make many of their own decisions. Changes in philosophy and/or leadership style are under the control of the manager. The following sections describe some of the elements that make up the internal environment:

A. Organizational Mission Statement: An organization's mission statement describes what the organization stands for and why it exists. It explains the overall purpose of the organization and includes the attributes that distinguish it from other organizations of its type. A mission statement should be more than words on a piece of paper; it should reveal a company's philosophy, as well as its purpose. This declaration should be a living, breathing document that provides information and inspiration for the members of the organization. A mission statement should

Corporate MIssion and VIsIOn Statements

-

answer the questions, "What are our values?" and "What do we stand for?" This statement provides focus for an organization by rallying its members to work together to achieve its common goals. But not all mission statements are effective in businesses. Effective mission statements lead to effective efforts. In today's quality-conscious and highly competitive environments, an effective mission statement's purpose is centered on serving the needs of customers. A good mission statement is precise in identifying the following intents of a company: • Customers -

who will be served?

• Products/services • Location -

what will be produced?

where the products/services will be produced?

• Philosophy -

what ideology will be followed?

B. Company Policies: Company policies are guidelines that govern how certain organizational situations are addressed. Just as colleges maintain policies about admittance, grade appeals, prerequisites, and waivers, companies establish pOlicies to provide guidance to managers who must make decisions about circumstances that occur frequently within their organization. Company policies are an indication of an organization's personality and should coincide with its mission statement.

C. Formal Structure: The formal structure of an organization is the hierarchical arrangement of tasks and people. This structure determines how information flows within the organization, which departments are responsible for which activities, and where the decision-making power rests. Some organizations use a chart to simplify the breakdown of its formal structure. This organizational chart is a pictorial display of the official lines of authority and communication within an organization.

D. Organizational Culture: The organizational culture is an organization's personality. Just as each person has a distinct personality, so does each organization. The culture of an organization distinguishes it from others and shapes the actions of its members.

Four Main Components: Four main components make up an organization's culture:

1. Values: Values are the basic beliefs that define employees' successes in an organization. For example, many universities place high values on professors being published. If a faculty member is published in a professional journal, for example, his or her chances of receiving tenure may be enhanced. The university wants to ensure that a published professor stays with the university for the duration of his or her academic career - and this professor's ability to write for publications is a value.

2. Heroes: The second component is heroes. A hero is an exemplary person who reflects the image, attitudes, or values of the organization and serves as a role model to other employees. A hero is sometimes the founder of the organization (think Sam Walton of Wal-Mart). However, the hero of a company doesn't have to be the founder; it can be an everyday worker, such as hardworking paralegal Erin Brockovich, who had a tremendous impact on the organization.

III

. Human Resource Planning and Audit

3. Rites and Rituals:

Rites and rituals, the third component, are routines or ceremonies that the company uses to recognize high-performing employees. Awards' banquets, company gatherings, and quarterly meetings can acknowledge distinguished employees for outstanding service. The honourees are meant to exemplify and inspire all employees of the company during the rest of the year. 4. Social Network:

The final component, the social network, is the informal means of communication within an organization. This network, sometimes referred to as the company grapevine, carries the stories of both heroes and those who have failed. It is through this network that employees really learn about the organization's culture and values. E. Organizational Climates:

A by-product of the company's culture is the organizational climate. The overall tone of the workplace and the morale of its workers are elements of daily climate. Worker attitudes dictate the positive or negative "atmosphere" of the workplace. The daily relationships and interac.ti '::1s of employees are indicative of an organization's climate. F. Resources:

Resources are the people, information, facilities, infrastructure, machinery, equipment, supplies, and finances at an organization's disposal. People are the paramount resource of all organizations. Information, facilities, machinery equipment, materials, supplies, and finances are supporting, nonhuman resources that complement workers in their quests to accomplish the organization's mission statement. The availability of resources and the way that managers value the human and non-human resources impact the organization's environment. G. Managerial Philosphies:

Philosophy of management is the manager's set of personal beliefs and values about people and work and as such, is something that the manager can control. McGregor emphasized that a manager's philosophy creates a self-fulfilling prophecy. Theory X managers treat employees almost as children who need constant direction, while Theory Y managers treat employees as competent adults capable of participating in work-related decisions. These managerial philosophies then have a subsequent effect on employee behaviour, leading to the self-fulfilling prophecy. As a result, organizational philosophies and managerial philosophies need to be in harmony. H. Managerial Leadership Styles:

The number of co-workers involved within a problem-solving or decision-making process reflects the manager's leadership style. Empowerment means delegating to subordinates decision-making authority, freedom, knowledge, autonomy, and skills. Fortunately, most organizations and managers are making the move toward the active participation and teamwork that empowerment entails. When guided properly, an empowered workforce may lead to heightened productivity and quality, reduced costs, more innovation, improved customer service, and greater commitment from the employees of the organization. In addition, response time may improve, because information and decisions need not be passed up and down the hierarchy. Empowering employees makes good sense because employees closest to the actual problem to be solved or the customer to be served can make the necessary decisions more easily than a supervisor or manager removed from the scene.

Corporate MIssIon and V,sIOn Statements

III

4. LEADERSHIP THEORY: LEADERS PROVIDE VISION, STRATEGY AND DEFINE REALITY: MAX DEPREE: MAX DEPREE: Max DePree is an American writer, son of D.J. DePree, founder of 'Herman Miller' office furniture company, he and his brother Hugh DePree assumed leadership of the company in the early 1960s. He succeeded his brother Hugh as CEO in the mid-1980s and served in that capacity to 1990. His book Leadership is an Art has sold more than 800,000 copies. In 1992, DePree was inducted in.to Junior Achievement's U.S. Business Hall of Fame. DePree brought the 'Herman Miller' to the level of one of the most profitable Fortune 500 companies. Max DePree organizational theories contain pragmatic and solid business sense. In the growth of "Herman Miller", Max DePree made very smart hires that look unconventional on the surface. Their hiring decisions always emphasized his quality and smart marketing.

A. Mission and Vision: DePree's leadership theory on mission and vision is based on his CEO experience and all his experience with employees. One of his most famous quotes is: liThe first responsibility of a leader is to define reality. The last is to say thank you. In between, the leader is a servant."

The management theory ot Max DePree is based on the idea that leadership is an art. His theory questions some of the basic iaeas about leadership, such as whether leadership has a future. His company thrived on diversity, and a belief that quality work can be done with openness, ideas, joy, healing and dignity. The three dimensional theory is: 1. Leaders give workers the strategy and the 'vision of the organization. 2. Leaders need to remove obstacles and get out of the way for workers to perform their jobs. 3. DePree's management theory is basically humanitarian, focussing on employee needs financially and emotionally, and giving incentives to employees such as stock options in the company.

B. Leadership is an Art: 1. The first responsibility of a leader is to define reality. The last is to say thank you .•In between the two, the leader must become a servant and a debtor. 2. Leaders should leave behind them assets and a legacy. First, consider assets; certainly leaders owe assets. Leaders owe their institutions vital financial health, and the relationships and reputation that enable continuity of that financial health. 3. Leaders must deliver to their organizations the appropriate services, products, tools, and equipment that people in the organization need in order to be accountable. In many institutions leaders are responsible for providing land and facilities. 4. Besides owing assets to their institutions, leaders owe the people in those institutions certain things. Leaders need to be concerned with the institutional value system which, after all, leads to the principles and standards that guide the practices of the people in the institution. Leaders owe clear statements of mission, vision the values of the organization. These values should be broadly understood and agreed to and should shape our corporate and individual behaviour. What is this value system based on? How is it expressed? How is it audited? These are not easy questions to deal with.

-

. Human Resource Plannmg and AudIt

5. Leaders are also responsible for future leadership. They need to identify, develop, and nurture future leaders by adopting competencies and skills management system and strategic planning. 6. Leaders are responsible for such things as a sense of quality in the institution, for whether or not the institution is open to influence and open to change. Effective leaders encourage contrary opinions, an important source of vitality. Leaders can nurture the roots of an institution, about a sense of continuity, about institutional culture. 7. Leaders owe a certain maturity. Maturity as expressed in a sense of self-worth, a sense of belonging, a sense of expectancy, a sense of responsibility, a sense of accountability, and a sense of equality. All this can happen by bringing in maturity in systems, standards, structure and styles of management and using all these to achieve corporate goals by strategic management. 8. Leaders owe the corporation rationality. Rationality gives reason and mutual understanding to programmes and to relationships. It gives visible order. Excellence and commitment and competence are available to us only under the rubric of rationality. A rational environment values trust and human dignity and provides the opportunity for personal development and selffulfillment in the attainment of the organization's goals. 9. Leaders are obligated to provide and maintain momentum. Leadership comes with a lot of debts to the future. There are more immediate obligations as well. Momentum is one. Momentum in a vital company is palpable. It is not abstract or mysterious. It is the feeling among a group of people that their lives and work are intertwined and moving toward a recognisable and legitimate goal. It begins with competent leadership and a management team strongly dedicated to aggressive managerial development and opportunities. This team's job is to provide an environment that allows momentum to gather. Momentum comes from a clear vision of what the corporation ought to be, from a well-thought-out strategy to achieve that vision, and from carefully conceived and communicated directions and plans that enable everyone to participate and be publicly accountable in achieving those plans.

10. Leaders are responsible for effectiveness. Much has been written about effectiveness - some of the best of it by Peter Drucker. He tells us is that efficiency is doing the thing right, but effectiveness is doing the right thing.

S. TRANSFORMATION THEORY: JOHN P KOTTER: Kotter holds that "the methods used in successful transformations are all based on one fundamental insight: that major change will not happen for a long list of reasons". Kotter holds that the key to the success of a change programme is to move through the 8 stages of Kotter. Additionally, addressing the 3 stages of transition as described by Bridges in a step by step manner could allow a leader of change to better support the transformation required within people to support the change effort. From Kotter, the leading thought leader on change management, here are "Eight Steps to Transform Your Organization:"

1. Establish a Sense of Urgency: 1. Examine market and competitive realities. 2. Identify and discuss crises, potential crises, or major opportunities. 3. For change to happen, it helps if the whole company really wants it. Develop a sense of urgency around the need for change. This may help you spark the initial motivation to get things moving.

Corporate Mission and Vision Statements

-

4. This isn't simply a matter of showing people poor sales statistics or talking about increased competition. Open an honest and convincing dialogue about what's happening in the marketplace and with your competition. If many people start talking about the change you propose, the urgency can build and feed on itself.

A. What you can do: 1. Identify potential threats, and develop scenarios showing what could happen in the future. 2. Examine opportunities that should be, or could be, exploited. 3. Start honest discussions, and give dynamic and convincing reasons to get people talking and thinking. 4. Request support from customers, outside stakeholders and industry people to strengthen your argument. 5. Kotter suggests that for change to be successful, 75% of a company's management needs to "buy into" the change. In other words, you have to really work hard on step one, and spend significant time and energy building urgency, before moving onto the next steps. Don't panic and jump in too fast because you don't want to risk further short-term losses - if you act without proper preparation, you could be in for a very bumpy ride.

B. Action Tools: 1. SWOT matrix. 2. Examine the market and competitive realities.

2. Form a Powerful Guiding Coalition: Assemble a group with enough power to lead the change effort and encourage the group to work as a team: 1. Convince people that change is necessary. This often takes strong leadership and visible support from key people within your organization. Managing change isn't enough - you have to lead it. 2. You can find effective change leaders throughout your organization - they don't necessarily follow the traditional company hierarchy. To lead Change, you need to bring together a coalition, or team, of influential people whose power comes from a variety of sources, including job title, status, expertise, and political importance. 3. Once formed, your "change coalition" needs to work as a team, continuing to build urgency and momentum around the need for change.

A. What you can do: 1. Identify the true leaders in your organization. 2. Ask for an emotional commitment from these key people. 3. Work on team building within your change coalition. 4. Check your team for weak areas, and ensure that you have a good mix of people from different departments and different levels within your company.

B. Action Tools: 1. 5 stages in team development tool.

III

Human Resource Plannmg and Audit

3. Create a Vision: Create a vision to help direct the change effort and develop strategies for achieving that vision 1. When you first start thinking about change, there will probably be many great ideas and solutions floating around. Link these concepts to an overall vision that people can grasp easily and remember. 2. A clear vision can help everyone understand why you're asking them to do something. When people see for themselves what you're trying to achieve, then the directives they're given tend to make more sense. A. What you can do:

1. Determine the values that are central to the change. 2. Develop a short summary (one or two sentences) that captures what you "see" as the future of your organization. 3. Create a strategy to execute that vision. 4. Ensure that your change coalition can describe the vision in five minutes or less. 5. Practice your "vision speech" often. B. Action Tools:

1. Vision building tool. 2. Develop strategies for achieving the vision. 3. Questionnaire to develop shared mission and vision statement.

4. Communicate the Vision: Use every vehicle possible to communicate the new vision and strategies and teach new . behaviours by the example of the guiding coalition 1. What you do with your vision after you create it will determine your success. Your message will probably have strong competition from other day-to-day communications within the company, so you need to communicate it frequently and powerfully, and embed it within everything that you do. 2. Don't just call special meetings to communicate your vision. Instead, talk about it, at every chance you get. Use the vision daily to make decisions and solve problems. When you keep it fresh on everyone's minds, they'll remember it and respond to it. 3. It's also important to ''walk the talk." What you do is far more important - and believable - than what you say. Demonstrate the kind of behaviour that you want from others. A. What you can do:

1. Talk often about your change vision. 2. Openly and honestly address peoples' concerns and anxieties. 3. Apply your vision to all aspects of operations - from training to performance reviews. Tie everything back to the vision. 4. Lead by example.

Corporate MIssion and VIsion Statements

B. Action Tools:

-

1. Communication plan template. 2. Storytelling tool. 3. Have the vision put up on screen savers, posters, etc.

5. Empower Others to Act on the Vision: Get rid of obstacles to change Change systems or structures that seriously undermine the vision Encourage risk taking and non-traditional ideas, activities, and actions: 1. If you follow these steps and reach this point in the change process, you've been talking about your vision and building buy-in from all levels of the organization. Hopefully, your staff wants to get busy and achieve the benefits that you've been promoting. 2. But is anyone resisting the change? And are there processes or structures that are getting in its way? 3. Put in place the structure for change, and continually check for barriers to it. Removing obstacles can empower the people you need to execute your vision, and it can help the change move forward.

A. What you can do: 1. Identify, or hire, change leaders whose main roles are to deliver the change. 2. Look at your organizational structure, job descriptions, and performance and compensation systems to ensure they're in line with your vision. 3. Recognize and reward people for making change happen. 4. Identify people who are resisting the change, and help them see What's needed. 5. Take action to quickly remove barriers (human or otherwise).

B. Action Tools: Remove obstacles, encourage risk taking and non-traditional ideas, activities, and actions, so that those who want to make the vision a reality can do so.

6. Plan for and Create Short-Term Wins: Plan for visible performance improvements. Create those improvements Recognize and reward employees involved in the improvements: 1. Nothing motivates more than success. Give your company a taste of victory early in the change process. Within a short time frame (this could be a month or a year, depending on the type of change), you'll want to have results that your staff can see. Without this, critics and negative thinkers might hurt your progress. 2. Create short-term targets - not just one long-term goal. You want each smaller target to be achievable, with little room for failure. Your change team may have to work very hard to come up with these targets, but each ''win'' that you produce can further motivate the entire staff.

A. What you can do: • Look for sure-fire projects that you can implement without help from any strong critics of the change . • Don't choose early targets that are expensive. You want to be able to justify the investment in each project.

III

Human Resource Planmng and Audit

• Thoroughly analyze the potential pros and cons of your targets. If you don't succeed with an early goal, it can hurt your entire change initiative. • Reward the people who help you meet the targets. B. Action Tools: Publicly recognise and reward people who make wins possible through use of the rewards and recognition guidelines.

7. Consolidate Improvements and Produce still more Change: Use increased credibility to change systems, structures, and policies that don't fit the vision. Hire, promote, and develop employees who can implement the vision. Reinvigorate the process with new projects, themes, and change agents: 1. Kotter argues that many change projects fail because victory is declared too early. Real change runs deep. Quick wins are only the beginning of what needs to be done to achieve long-term change. 2. Launching one new product using a new system is great. But if you can launch 10 products, that means the new system is working. To reach that 10th success, you need to keep looking for improvements. 3. Each success provides an opportunity to build on what went right and identify what you can improve. A. What you can do: 1. After every win, analyze what went right and what needs improving. 2. Set goals to continue building on the momentum you've achieved. 3. Learn about kaizen, the idea of continuous improvement. 4. Keep ideas fresh by bringing in new change agents and leaders for your change coalition. B. Action Tools: Hire, promote or develop people who can implement the change vision.

S. Institutionalize New Approaches: • Articulate the connections between the new behaviours and organizational success • Develop the means to ensure leadership development and succession 1. Finally, to make any change stick, it should become part of the core of your organization. Your corporate culture often determines what gets done, so the values behind your vision must show in day-to-day work. 2. Make continuous efforts to ensure that the change is seen in every aspect of your organization. This will help give that change a solid place in your organization's culture. 3. It's also important that your company's leaders continue to support the change. This includes existing staff and new leaders who are brought in. If you lose the support of these people, you might end up back where you started. A. What you can do: • Talk about progress at every chance you get. Tell success stories about the change process, and repeat other stories that you hear.

Corporate Mission and Vision Statements

III

• Include the change ideals and values when hiring and training new staff . • Publicly recognise key members of your original change coalition, and make sure the rest of the staff - new and old - remembers their contributions. • Create plans to replace key leaders of change as they move on. This will help ensure that their legacy is not lost or forgotten. B. Action Tools: • Institutionalise the new approaches, articulate the connection between new behaviours, the organisation's strategic objectives and organisational success and sustainability. • Tell vivid stories over and over about the new organization. • Make sure induction/orientation programmes reflect the new way of working. • Use the promotions process to place people who act according to the new values, norms and ways into visible and influential positions. • Create better performance through customer and productivity oriented behaviour, better leadership and more effective management. • Develop the means to ensure leadership development through succession.

-

Human Resource Planning and Audit

LEVEL SIX

CONCEPTUAL FRAMEWORK: DEVELOPING MISSION AND VISION STATEMENTS IN STRATEGIC PLANNING 1. THE BEGINNING: Essential to a good strategic plan are clear statements of core values, vision, purpose and mission. In strategic planning there are differing ways in which the words vision and mission are used. There is no particular way that is standard or correct. Here are two ways in which the words "vision" and "mission" are often used: A. Vision: • A view of where an organization wants to be or what it wants to look like at some point in the future; a picture of the ideal state of the organization and/or its impact on society. • A view of who we are as an organization. B. Mission: • A declaration of organizational purpose that states, who it is, who it serves, what needs it meets, what it does to respond to those needs, and to what end • A brief and memorable statement of the essential purpose of an organization. C. Three Statements in Strategic Planning: • A mission statement of the more comprehensive type. • A vision statement that gives a view of our ideal future and impact • A purpose statement that is very short and memorable, like a tag line

2. RATIONALE IN DEVELOPING MISSION AND VISION STATEMENT: 1. JOHN KOTTER: IN " LEADING CHANGE": A professor of leadership at the Harvard Business School, Kotter gives an eight-stage process for leading change, the third of which is "Developing Vision and Strategy"

A. Vision: "Vision refers to a picture of the future with some implicit or explicit commentary on why people should strive to create future."

B. Good Vision Statement: Kotter explains that in a change process, good vision serves three important purposes: • It clarifies the general direction for change.

• It motivates people to take action in the right direction. • It helps to coordinate the actions of different people.

2. JAMES KOUZES AND BARRY POSNER: IN "THE LEADERSHIP CHALLENGE" Kouzes is chairman emeritus of the Tom Peters Group and Posner is Dean of the Leavey School of Business and Administration at Santa Clara University. Drawing from a research database of more than 60,000 leaders and constituents, the authors discovered recurring patterns of success

Corporate Mission and Vision Statements

&I

and formulated the "Five Fundamental Practices of Exemplary Leadership" presented in this book. The second of these is "Inspiring a Shared Vision."

A. Vision: An Ideal and Unique Image of Future: "We define vision as an ideal and unique image of the future." "Visions are statements of destination, of the ends of our labour; they are therefore future-oriented and are made real over different spans of time."

B. Vision Statement: Must Appeal to all Who Have Stake in it: "A vision is a mental picture of what tomorrow will look like. It expresses our highest standards and values. It sets us apart and makes us feel special. It spans years of time and keeps us focused on the future. And if it's to be attractive to more than an insignificant few, it must appeal to all of those who have a stake in it."

3. GIL RENDLE AND ALICE MANN: IN HOLY CONVERSATIONS: Vision Statement: Draw a Picture of Future: "A vision statement is a word picture of the future of what our congregation would look like if we were, in fact, able to fulfill our mission statement. It identifies what would be different if we were faithful. It includes hints of the criteria by which we will measure our ministry by describing what will be different about us in three to five years. Vision statements are descriptive and therefore usually not as brief and concise as mission statements. They draw a picture of a future that is sufficiently rich in detail to offer some direction and guidance for the trip."

4. JOHN BRYSON: IN STRATEGIC PLANNING FOR PUBLIC AND NON-PROFIT ORGANIZATION: John Bryson, a professor of planning and public affairs at the University of Minnesota, was influential in the strategic planning models advocated by the National Center for Non-profit Boards.

A. Vision:Helps to Achive Full Potential: A vision statement is a "clear and succinct description of what the organization or community should look like after it successfully implements its strategies and achieves its full potential."

B. Mission and Vision: Operate in Tandem: "A mission outlines the organizational purpose while a vision goes on to describe how the organization will look when it is working extremely well in relation to its environment and its key stakeholders."

5. PETER SENGE: IN " THE FIFTH DISCIPLINE": THE ART AND THE PRACTICE OF LEARNING ORGANIZATION: Shared Vision: A Must for a Learning Organization to Establish Goals: "You cannot have a learning organization without shared vision. Without a pull toward some goal which people truly want to achieve, the forces in support of the status quo can be overwhelming. Vision establishes an over reaching goal. The loftiness of the target compels new ways of thinking and acting. A shared vision also provides a rudder to keep the learning process on course when stresses develop. Learning can be difficult, even painful. With a shared vision, we are more likely to expose our ways of thinking, give up deeply held views, and recognise personal and organizational shortcomings. All that trouble seems trivial compared with the importance of what we are trying to create."

-

Human Resource Planning and Audit

6. JAMES COLLINS AND JERRY PORRAS: IN 'BUILT TO LAST': Collins is the author of the current bestseller Good to Great. Both authors have been associated with the Stanford University School of Business where Porras currently teaches and directs the Executive Programme in Organizational Change.

Vision Consists of Core Ideology and Envisioned Future: "A well-conceived vision consists of two major components future."

core ideology and an envisioned

A. Core Ideology: Core ideology consists of both core values and core purpose: Core values are the organization's essential and enduring tenets - a small set of timeless guiding principles that have no external justification; they have intrinsic value and importance to those inside the organization. Core purpose ... is the organization's fundamental reason for being. B. Envisioned Future Consists of two Parts: • A ten-to thirty-year BHAG (Big Hairy Audacious Goal) . • Vivid descriptions of what it will be like when the organization realises the BHAG.

Example One: DARE - A MARTIAL ART COMPANY: Defence Against Rape and Eveteasers: A Martial Art Organization in Mumbai, India, A. Our Mission Statement: 1. Teach Avoidance of first Hostile Intrusion (To avoid hostile situations) 2. Teach Verbal and Eye Response to Hostile Intrusion (When he comes uncomfortably close) 3. Teach Reaction to First Physical Contact. (When he grabs your hand) 4. Teach Use of Force to Counter Aggression. (When he starts using force) 5. Teach Defence Tactics to Sexual Assault. (When tries to tear your clothes) 6. Teach Survival and Escape Maneuvers in attempted Rape. (When he tries to penetrate) 7. Teach a Fitness Programme for Surviving Adversity. (The exercises to get fit in a short time) 8. Educate about Legal perspectives in Sexual offence (The law and what is to be done) B. Our Vision Statement: Trouble comes when it is least expected. 'What happens to others need not happen to me" is a common rationalisation among women. We have to prepare to protect our women against the unknown and untimely enemy in this violent and unpredictable world that we live in. "Even Fortune favours the Prepared". We would cherish to be the most preferred martial art and kick boxing teaching organization within next 3-5 years. 1. Non-Consensual Mission Statements: There is much less consensus on mission statements. This is the type of advocated by Bryson, which answers six questions: 1. Who are we?

Corporate Mission and Vision Statements

2. What needs to we exist to meet? 3. What do we do to meet those needs? 4. Who do we serve? 5. What are our philosophy, values and culture? 6. What makes us distinctive or unique? Here is an example of this type of mission statement

Example Two: Dignity Foundation Mumbai: A NGO for Cause and Care of Senior Citizens Since 1995: 1. Mission: • We will provide opportunities that inspire and motivate seniors to lead active and meaningful lives post-retirement. • We will facilitate seniors to derive self esteem i.e., dignity, through involving themselves in activities that promote "successful" ageing. • We will provide best-in-class social support systems (Elder Care, Housing, Companionship, etc.) that deliver care facilities for families where none exist. • We will provide a wide range of innovative services designed to enrich every aspect of the lives of seniors. • Provide information to seniors through publishing, holding seminars and discussions. • Undertake various services for their support and welfare and enable them to live productive, meaningful and interesting lives, drawing upon their knowledge, skills and experience. • Construct a database to determine needs of senior citizens in India and devise ways to meet them. • Build awareness by dissemination of such data. Mobilise senior citizens into an identity group. Undertake advocacy with government and public welfare bodies.

2. Mission: Succinct and Memorable Statement of Purpose: The other type of mission statement is the succinct and memorable statement of purpose.

Example Three: Microsoft Technologies: Mission: At Microsoft, we work to help people and businesses throughout the world realise their full potential. Vision: "A personal computer in every home running microsoft software"

Example Four: Ford Motors: Mission: We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. Vision: To become the world's leading consumer company for automotive products and services.

III

Human Resource Planning and Audit

3. COMPONENTS OF MISSION AND VISION: RENDLE AND MANN: They make the observation that there are two components to mission and vision statements: the axiomatic and unique. A. Axiomatic: Pertains to Accepted Truth: Axiomatic elements could be true of any other organization. For example, the mission statements of DARE and Dignity Foundation could be true of other such organizations. But that does not make those statements less valuable. They are very powerful in the context of their own perspectives. Internally, those statements provide a clear sense of the organization's basic purpose. B. Unique: Specific or Distinctive: Unique elements are distinctive to that organization. For example, the mission and vision statements of Microsoft and Ford Motors are distinctive to these two organizations. Some people prefer this shorter kind of mission statement or vision statement, others do not. The choice does not need to be either/or. Both types of statements are valuable. Here, are some more examples of vision statement in this "One liner tags" category: 1. Siemens: Where technology touches lives. 2. Dupont: Better things for better living through chemistry. 3. Hyundai: Building a better world through innovative technology. 4. Nokia: Connecting people. 5. Xerox: The document company. 6. IBM: Solutions for a small planet. 7. Philips: Let's make things better. 8. BPL: Believe in the best. 4. FINDING TRUE CORE VALUES: Core values are the most cherished beliefs and principles that guide an organisation if the list of core values has too many (preferably three or four but not more than five or six) or if no process has been used for forced-selectivity to determine the core values, the values on the hit list are not really "core" values. Again, here are some insights that support this view. A. JAMES COLLINS AND JERRY PORRAS: IN 'BUILT TO LAST' "In identifying the core values of your organization, push with relentless self-honesty for truly core values. If you articulate more than five or six, there's a good chance you are not getting down to the essentials, and probably confusing core values (which do not change) with operating practices, business strategies, and cultural norms (which should be open for change). Remember, these values must stand the test of time." B. KEN BLANCHARD: IN 'LEADING AT A HIGHER LEVEL': "Most organizations that do have values either have too many values or have not rank-ordered them. Research shows the people can't focus on more than three or four values that really impact behaviour." They also found that values must be rank-ordered to be effective.

Corporate Mission and Vision Statements

lEVEL SEVEN

••

INDIA INC.: MISSION AND VISION STATEMENTS 1. RELIANCE COMMUNICATIONS: MISSION AND VISION: "We will leverage our strengths to execute complex global-scale projects to facilitate leadingedge information and communication services affordable to all individual consumers and businesses in India. We will offer unparalleled value to create customer delight and enhance business productivity. We will also generate value for our capabilities beyond Indian borders and enable millions of India's knowledge workers to deliver their services globally."

2. TATA COMMUNICATIONS: MISSION AND VISION: "Deliver a new world of communications to advance the reach and leadership of our customers. Invest in building long-lasting relationships with customers and partners and lead the industry in responsiveness and flexibility. Build leading-edge IP-Ieveraged solutions advanced by our unmatched global infrastructure and leadership in emerging markets."

3. BHARTI AIRTEL: Mission:

We will meet the mobile communication needs of our customers through: • Innovative products and service • Cost efficiency • Unified Messaging Solutions Vision

"To provide global telecom services and delight customers."

4. NTPC LIMITED: Mission:

"Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society" Vision:

"A world class integrated power major, powering India's growth, with increasing global presence"

5. LG ELECTRONICS INDIA: VISION AND MISSION: "LG Electronics is pursuing the vision of becoming a true global digital leader, attracting customers worldwide through its innovative products and design. The company's goal is to rank among the top 3 consumer electronics and telecommunications companies in the world by 2010. To achieve this,

11.1

Human FJesource Planning and Audit

we have embraced the idea of "Great Company, Great People," recognizing that only great people can create a great company.

6. ADITVA BIRLA GROUP: Vision: To be a premium global conglomerate with a clear focus on each business. Mission: To deliver superior value to our customers, shareholders,

employe~s

and society at large.

Values: • Integrity • Commitment • Passion • Seamlessness • Speed

7. AVIVA LIFE INSURACE: Vision: Aviva - where exceeding expectations through innovative solutions is "our" way of life This is the compelling vision that Aviva India has created through the active contribution of its employees. These lines not only define the way we live and work but also serve as a reminder. To deliver the best to our customers, shareholders, colleagues, partners and employees at all times. Core Values: Integrity, Customer centricity, Passion for winning, Innovation and Empowered team that we have collectively defined and committed to working towards.

8. GODREJ CONSUMER PRODUCTS LTD: VISION AND MISSION: "We are dedicated to DELIVER SUPERIOR STAKEHOLDER VALUE by providing solutions to existing and emerging consumer needs in the Household and Personal Care business". We will achieve this through ENDURING TRUST and RELENTLESS INNOVATION delivered with PASSION and ENTREPRENEURIAL SPIRIT."

9. MAHINDRA AND MAHINDRA LTD: Vision: Indians are second to none in the world. The Founders of our nation and of our Company passionately believed this. We will prove them right by believing in ourselves and by making Mahindra and Mahindra Limited known world-wide for the quality of its products and services.

Corporate Mission and Vision Statements

Mission:

We don't have a group-wide mission statement. Our Core Purpose is what makes all of us want to get up and come to work in the morning.'

10.INFOSYS: Vision:

We believe a strong, stable and secure home is the answer to many problems we face today. Our dream is to build homes, not just for a selected few but for everyone. Affordable homes built on strong foundations, to bring you closer to nature, to happiness, and to yourself. Mission:

To make a difference to the way people live.

11. ITC LIMITED: Vision:

"Sustain lTC's position as one of India's most valuable corporations through world class performance, creating growing value for the Indian economy and the company's stakeholders." Mission:

"To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value"

12. POLARIS SOFTWARE LAB LTD: Vision:

• Create the environment to attain personal mastery to push new frontiers • Unleash the collective knowledge potential • Achieve global stature by helping customers win in their market place • Grow the value of Polaris every year • Anchor the family and its aspirations • Impact the society at large • Rooted in Polaris Values - Passion, Humility, Integrity, Respect, FUN - 'PHIR FUN' Mission:

"To be a reliable and responsive Techno-Business Solution partner and provide cost-effective, timely solution, meeting customer expectation through continuous process improvement and Win-Win relationships in the banking, financial services and insurance space"

13. NIRMA: Nirma is a customer-focussed company committed to consistently offer better quality products and services that maximise value to the customer. This customer-centric philosophy has been well emphasised at Nirma through: • Continuously exploring and developing new products and processes. • Laying emphasis on cost effectiveness.

III

Human

Re~ource

Planning and Audit

• Maintaining effective Quality Management System. • Complying with safety, environment and social obligations. • Imparting training to all involved on a continuous basis. • Teamwork and active participation all around. • Demonstrating belongingness and exemplary behaviour towards organisation, its goals and objectives. Nirma is a phenomenon and synonymous with Value for Money. The brand transcends the specific dynamic of any particular product category, which is best captured in its above mission statement - a statement of sustained innovation, an unceasing effort to deliver better value to consumers, through better product quality.

14. DABUR INDIA LTD: Vision:

Dedicating to the Health and well-being of every house-hold. Mission:

The timing marks the end of our previous four year business plan that was crafted for the year 2002-06 and comes to an end with this fiscal. The new plan envisages an aggressive strategy built around three pillars. Expansion, Acquisition and Innovation across various markets and product segments, to drive growth. We expect to double our sales and profits by the end of fiscal 2009-10 with this plan".

15. TATA CHEMICALS LIMITED: Vision:

Enrich the quality of life by offering products and services that meet the essential needs of people. Mission:

We shall be the most respected company in the businesses and geographies we operate in. Our growth and success will be achieved by: • Enhancing the value we deliver to our customers • Being globally competitive • Internationalisation of our business • Improving shareholder value • Commitment to corporate sustainability • Strengthening stakeholder relationships • Providing new and innovative offerings Employees are our strength, and we will create an environment that fosters achievement, learning and teamwork.

Corporate Mission and Vision Statements

III

16. WIPRO: Vision:

• Having already achieved the pinnacles of process and quality credentials (through ISO 9000, SEI CMM, PCMM and Six Sigma), Wipro's Vision is focussed on attaining leadership in the areas of business, customer and people. • Business Leadership: Among the top 10 Information Technology Services companies globally and the No.1 Information Technology company in India. • Customer Leadership: The No.1 choice of customers through innovative solutions and Six Sigma processes. • People Leadership: Among the top 10 most preferred employers globally by creating an environment of empowerment, intellectual challenge and wealth sharing. • Brand Leadership: Wipro to be among the 5 most admired brand in India.

17. ICICI BANK: Vision:

To be the leading provider of financial services in India and a major global bank. Mission:

We will leverage our people, technology, speed and financiar capital to: • be the banker of first choice for our customers by delivering high quality, world-class products and services. • expand the frontiers of our business globally. • playa pro-active role in the full realisation of India's potential. • maintain a healthy financial profile and diversify our earnings across businesses and geographies. • maintain high standards of governance and ethics. • contribute positively to the various countries and markets in which we operate. • create value for our stakeholders.

18. HCL TECHNOLOGIES: Mission:

"To provide world-class information technology solutions and services to enable our customers to serve their customers better"

19. INFOSYS TECHNOLOGIES: Vision:

"Our Vision is to become a world class organization. The hallmark of this vision has to be total customer satisfaction. This can be achieved only by offering products of consistent quality at a competitive price, meeting delivery schedules and commitments." Infosys' Vision is to be a globally respected corporation that provides best-of-breed business solutions, leveraging technology, delivered by best-in-class people

-

Human Resource Planning and Audit

Mission:

Infosys' Mission Statement is to achieve their objectives in an environment of fairness, honesty, and courtesy towards their clients, employees, vendors and society at large

20. HINDUSTAN PETROLEUM CORPORATION LTD: Vision:

To be a world class energy company known for caring and delighting the customers with high quality products and innovative services across domestic and international markets with aggressive growth and delivering superior financial performance. The company will be a model of excellence in meeting social commitment, environment, health and safety norms and in employee wei - fare and relations. Mission:

HPCL, along with its joint ventures, will be a fully integrated company in the hydro-carbons sector of exploration and production, refining and marketing; focussing on enhancement of productivity, quality and profitability; caring for customers and employees; caring for environment protection and cultural heritage. It will also attain scale dimensions by diversifying into other energy related fields and by taking up transnational operations.

21. ESSAR GROUP: Vision:

We will be a respected global entrepreneur, through the power of Positive Action. Mission:

We are committed to innovative growth, through our personal passion, reinforced by a professional mindset, creating value for all those we touch.

22. JET AIRWAYS Jet Airways will be the most preferred domestic airline in India. It will be the automatic first choice carrier for the travelling public and set standards, which other competing airlines will seek to match. Jet. Airways will achieve this pre-eminent pOSition by offering a high quality of service and reliable, comfortable and efficient operations. Jet Airways will achieve these objectives whilst simultaneously ensuring consistent profitability, achieving healthy, long-term returns for the investors and providing its employees with an environment for excellence and growth.

23. CADBURY INDIA LTD.: "At Cadbury PLC, our core purpose is working together to create brands people love." The core purpose captures the spirit of what we are trying to achieve as a business. We collaborate and work as teams to convert products into brands.

Corporate Mission and Vision Statements

24. JINDAL STEEL: Vision:

To become a global player in Cold Rolled speciality material through strong commitment to innovation, human resources developement and customer focus. Mission:

Be the preferred supplier by providing on time the best possible quality Cold Rolled Speciality material at the lowest possible cost.

25. BIRLA SUN LIFE MUTUAL FUND: Mission:

To consistently pursue investor's wealth optimization Vision:

To be the most trusted name in investment and wealth management, to be the preferred employer in the industry and to be a catalyst for growth and excellence of the asset management business in india.

26. RANBAXY Mission:

There are two key aspects to SRL's past and future success: our vision of maintaining world class standard and the values that we live by every day, as a company. To reflect our role as an industry leader and to focus our efforts on the opportunities ahead, our mission in delivering is as follows: Vision:

The Company is driven by its vision to achieve significant business in proprietary prescription products by 2012 with a strong presence in developed markets. It aspires to be amongst the Top 5 global generic players and aims at achieving global sales of US $5 Bn by 2012.

Human Resource Planning and Audit·

LEVEL EIGHT

FORTUNE 500 COMPANIES: MISSION AND VISION STATEMENTS 1. COCA-COLA: Mission: Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions. • To refresh the world ... • To inspire moments of optimism and happiness ... • To create value and make a difference. • Be the Brand - Inspire creativity, passion, optimism and fun Vision: Our vision serves as the framework for our road map and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth. • People: Ba a great place to work where people are inspired to be the best they can be. • Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. • Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. • Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities. • Profit: Maximise long-term return to shareowners while being mindful of our over-all responsibilities. • Productivity: Be a highly effective, lean and fast-moving organization. Our Winning Culture: Our winning culture defines the attitudes and behaviours that will be required of us to make our 2020 Vision a reality. Live Our Values: Our values serve as a compass for our actions and describe how we behave in the world. • Leadership: The courage to shape a better future. • Collaboration: Leverage collective genius. • Integrity: Be real. • Accountability: If it is to be, it's up to me. • Passion: Committed in heart and mind. • Diversity: As inclusive as our brands. • Quality: What we do, we do well.

III

Corporate Mission and Vision Statements

Focus On the Market: • Focus on needs of our consumers, customers and franchise partners. • Get out into the market and listen, observe and learn. • Possess a world view. • Focus on execution in the marketplace every day. • Be insatiably curious. Work Smart: • Act with urgency. • Remain responsive to change. • Have the courage to change course when needed. • Remain constructively discontent. • Work efficiently. Act Like Owners: • Be accountable for our actions and inactions. • Steward system assets and focus on building value. • Reward our people for taking risks and finding better ways to solve problems. • Learn from our outcomes -

what worked and what didn't.

2. DELL: Mission: Deli's mission is to be the most successful Computer Company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of: • Highest quality. • Leading technology. • Competitive pricing. • Individual and company accountability. • Best-in-class service and support. • Flexible customisation capability. • Superior... Vision: It's the way we do business. It's the way we interact with the community. It's the way we interpret the world around us - our customers' needs, the future of technology, and the global business climate. Whatever changes the future may bring our vision - Dell Vision - will be our guiding force. So Dell needs full customer satisfaction. In order to become the most successful computer company, they need the newest technology and loyal customers.

III

Human Resource Planning and Audit

3. PEPSICO: At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do, but the right thing to do for our business. Our Mission: Our mission is to be the world's premier consumer products company focussed on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity. Our Vision: "PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better to-morrow than tOday." Our vision is put into action through programmes and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. Performance with Purpose: At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society - delivering what we call Performance with Purpose. Our approach to superior financial performance is straightforward - drive shareholder value. By addressing social and environmental issues, we also deliver on our purpose agenda, which consists of human, environmental, and talent sustainability.

4. DELPHI - ISS: Mission: To be the global leader in automotive systems and related product lines. We must work together with employees, suppliers and stakeholders to profitably provide high value solutions to our customers. Vision: Be recognised by our customers as their best supplier.

5. DUPONT: Mission: Sustainable Growth: Increasing shareholder and societal value while reducing our environmental footprint. Vision: Our vision is to be the world's most dynamic science company, creating sustainable solutions essential to a better, safer, healthier life for people everywhere. We will be a pacesetter in improving every aspect of our operations with a total commitment to meeting the needs of our customers in Canada and abroad with continuously improving, high-value offerings.

Corporate Mission and Vision Statements

6. BANK OF CHINA:

••

Mission: • Build customer satisfaction and provide quality and professional service. • Offer rewarding career opportunities and cultivate staff commitment. • Create values and deliver superior returns to shareholders.

Vision: • To be customer's premier bank.

Core Values: • Social Responsibility • Performance -

We care for and contribute to our communities

We measure results and reward achievement

• Integrity - We uphold trustworthiness and business ethics • Respect - We cherish every individual • Innovation -

We encourage creativity

• Teamwork - We work together to succeed

7. CITIGROUP: Mission: To create world-class operations capabilities that deliver unmatched values to Citigroup through:

Product Expertise - Cultivate in-depth expertise in chosen financial products, serviced on an end-to-end basis supporting multiple geographies. Delivery Excellence - Ensuring effective and efficient delivery by leveraging scale and a relentless focus on continuous improvement, compliance and controls. Partner Business Excellence - Building a global network, fostering knowledge transfer, creating "next generation" practices and promoting transparency with clients. Enhancing Human Capital Competencies - Create an environment that provides people opportunity to realise their full potential resulting in becoming the employer of choice in the industry. Industry Leadership - Achieving a premier position in the Indian BPa market and driving process sophistication for the financial services industry, globally. VISION: To be the leader in providing business process management services to help our customers.

8. FORTIS: Mission: Fortis provides compelling customer solutions creatively. As one of Europe's most dynamic and sustainable financial services brands; we deliver specialized, innovative and pragmatic customer solutions across a network of channels and by leveraging our operational and entrepreneurial expertise.

•

Human Resource Planning and Audit

Vision:

In an increasingly complex, yet ever more convergent world, innovation, speed and agility will be as crucial as scale, track record and reach. We will stand out as a professional international financial services brand, recognised for our ability to deliver superior and sustainable stakeholder value by constantly anticipating and surpassing the needs of customers, investors, employees, partners and communities wherever, we do business.

9. HONEYWELL TECHNOLOGY SOLUTIONS: Mission:

Maximise the value and impact on Honeywell businesses and customers by providing technology, product and business solutions and services setting standards of world class performance. Vision:

Be the premier growth company delivering unsurpassed value to Honeywell customers by providing Innovative total solutions and services enhancing the safety, security, comfort, energy efficiency and productivity of the environment where they live, work and travel.

10. AXA SUPPORT: Mission:

Our mission is to build and maintain a specialist advisory services network that is the benchmark of profeSSionalism, client satisfaction and adviser support in Australia. First and foremost we aim to deliver excellent service and provide solutions to clients, who rely on us to understand their situation fully, to give appropriate and expert advice and to follow through over the long term to help them reach their financial goals. To provide a richly supportive working environment for our employees and advisers, allowing them to perform at their best capacity and continuously develop themselves personally and profeSSionally. We aim to operate profitably and deliver increasing value to our shareholders, so we can continue to grow and service our clients in ever better ways. We strive to enjoy an enviable reputation, and be sought after as an ideal employer to our staff, and business partner to our aligned advisers. Vision:

Our vision is to be Australia's pre-eminent specialist financial advisory network, providing clients with services that focus on protection and estate distribution considerations, through a network of specialist advisers working together. Our network provides advisers with an ideal support system for their personal, professional and business development. Values:

• Loyalty to our partners. • Team spirit that fosters high performance, both individually and collectively . • Pride in our profession. • The ambition to be among those who 'get things done'. • The imagination to antiCipate changes in the world around us. • The pragmatism to grasp situations as they are and react positively and effectively. • Commitment to being at the service of those who make the company a success: clients, advisers, employees and shareholders.

Corporate Mission and Vision Statements

11. METLlFE: MISSION AND VISION:

-

"To build financial freedom for everyone through leadership in providing financial advice, building long-term relationships through innovative protection, accumulation and retirement products and robust under-writing processes, and creating a world-class customer service experience for our customers."

12. MOTOROLA PHILANTHROPY: Mission:

Motorola seeks to benefit the communities where it operates around the world. The company achieves this by making strategic grants, forging strong community partnerships, fostering innovation and engaging stakeholders. Vision:

To make a unique contribution to improving the world in which we live.

13. HITACHI GLOBAL STORAGE TECHNOLOGIES: Mission:

We provide digital storage that delivers pioneering technology and quality that customers can count on. Vision:

Inspire our customers by being the storage industry's most innovative and respected company; one that makes positive contributions to society through our people and products. Values: • Customers: We focus on enabling our customers' success. • Global Diversity: We take pride in our people and our ideas. • Integrity: We are ethical and socially responsible. • Accountability: We make decisions, take action and own the results. • Leadership: We build our success on passion, teamwork and agility.

14. TOYOTA-INDUS MOTOR COMPANY LIMITED: Mission:

Mission of Toyota is to provide safe and sound journey. Toyota is developing various new technologies from the perspective of energy saving and diversifying energy sources. Environment has been first and most important issue in priorities of Toyota and working toward creating a prosperous society and clean world. Vision:

"IMe's Vision is to be the most respected and successful enterprise, delighting customers with a wide range of products and solutions in the automobile industry with the best people and the best technology". • The most respected. • The most successful.

III

Human Resource Planning and Audit

• Delighting customers. • Wide range of products. • The best people. • The best technology.

15. TOSHIBA BUSINESS COMMUNICATIONS SYSTEM: Mission: We proactively deliver time-to-market and cost-to-market strategies to all stakeholders as follows: Tokyo HQ: • To provide timely information and strategies to HQ regarding the market coverage. • Ensuring all targets and strategies are achieved by being a proxy in constant contact with distributors. Distributor: • Provide technical supports like; product training, second level support if needed and also updates of product roadmap. • Provide sales and marketing support; sales training, market information update through concerted efforts with research companies and also AandP activities support. Government Bodies: • Ensure all equipment distributed in our market coverage fully conform to the requirements of individual countries. Employees: • Provide opportunities for on-going learning and improvements in the course of work and also social developments. Vision: We strive to be a leader in the Business Communication Systems market for the Asia Pacific Region.

16. ADIDAS: • All Day I Dream About Sports. • Sports All Day I Dream About. Mission: . "ADIDAS-SALOMON" strives to be the global leader in the sporting goods industry with sports brands built on a passion for sports and a sporting lifestyle. We are consumer focussed. That means we continuously improve the quality, look, feel and image of our products and our organizational structures to match and exceed consumer expectations and to provide them with the highest value. We are innovation and design leaders who seek to help athletes of all skill lev~ls achieve peak performance with every product we bring to the market. We are a global organization that is socially and environmentally responsible, creative and financially rewarding for our employees and shareholders.

Corporate Mission and Vision Statements

III'

Vision:

We are committed to continuously strengthening our brands and products to improve our competitive position and financial performance. In the medium term, we will extend our leading market position in Europe, expand our share of the US footwear market and be the fastest growing major sporting goods supplier in Asia and Latin America. The resulting top-line growth, together with strict cost control and working capital improvements, will drive over-proportionate earnings growth.

17. McDONALDS : MISSION AND VISION: "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."

18. MICROSOFT: Mission:

At Microsoft, we work to help people and businesses throughout the world realise their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible. Vision:

A personal computer in every home running Microsoft software. Values:

As a company, and as individuals, we value: Integrity and honesty, Passion for customers, for our partners, and for technology, Openness and respectfulness, Taking on big challenges and seeing them through, constructive self-criticism, self-improvement, and personal excellence and accountability to customers, shareholders, partners, and employees for commitments, results, and quality.

19. TECHNOLOGY EXPORTS SERVICES CORPRATION: Mission and Vision:

• Be the leader in quality seNice provided to everyone in the energy, manufacturing and construction Industry. • Understand the needs of our client's and respond with urgency. • Meet our customer's demands and exceeds their expectations. • Maintain highly trained and motivated employees. • And, continuously improve our skills, seNice and achieve excellence in all of our endeavors.

20. SAMSUNG: Mission:

Everything we do at SAMSUNG is guided by our mission: to be the best "digital- a Company". Vision:

SAMSUNG is guided by a singular vision: to lead the digital convergence movement.

III

Human Resource Planning and Audit

We believe that through technology innovation today, we will find the solutions we need to address the challenges of tomorrow. From technology comes opportunity - for businesses to grow, for citizens in emerging markets to prosper by tapping into the digital economy, and for people to invent new possibilities. It's our aim to develop innovative technologies and efficient processes that create new markets, enrich people's lives and continue to make Samsung a trusted market leader.

21. ROYAL BANK OF SCOTLAND (RBS): Mission and Vision:

RBS Retail's vision is to be 'the best retail bank in the world'. To achieve this vision, RBS aims to be: The best bank to work for, the best bank to bank with, the best bank to invest in.

22. CISCO SYSTEMS: Mission and Vision:

• "At Cisco, our vision is to change the way people work, live, play and learn". • Company's mission is to enable people to make powerful connections - whether in business, education, philanthropy, or creativity. • Cisco Systems also strove to deliver a wide range of new products, expand its offerings through internal and external efforts, enhance customer support, and increase its presence around the world. • Organizations started to recognize the value of their information networks and the Internet as a source of business advantage; all of this drove company's mission and vision. • Ciscos saw the need for multi service network and were trying to find the ways how to integrate voice, video and data networks together.

23. CATERPILLAR: Mission:

• Caterpillar will be the leader in providing the best value in machines, engines and support services for customers dedicated to building the world's infrastructure and developing and transporting its resources. We provide the best value to customers. • Caterpillar people will increase shareholder value by aggressively pursuing growth and profit opportunities that leverage our engineering, manufacturing, distribution, information management and financial services expertise. We grow profitably. • Caterpillar will provide its world-wide workforce with an environment that stimulates diversity, innovation, team-work, continuous learning and improvement and rewards individual performance. We develop and reward people. • Caterpillar is dedicated to improving the quality of life while sustaining the quality of our earth. We encourage social responsibility. Vision:

• Be the global leader in customer value.

Corporate MIssIOn and Vision Statements

•.

;

24. SIEMENS: Mision and Vision: As a manufacturer, systems integrator and provider of complete solutions and services, we enable power utilities and industry customers to transport and distribute electricity reliably and economically from the power plant to the customer. To generate additional growth, we are reinforcing and optimizing our portfolio in selected areas. In addition to switchgear and transformers, our portfolio increasingly comprises products whose integrated communications and automation technologies offer added advantages to network operators. Our service offerings include the planning, upkeep and maintenance of entire power grids.

25. FORD MOTORS: Slogan: "Built for the road ahead." Mission: "We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world."

26. EXXON MOBIL: Slogan: "Taking on the world's toughest energy challenges." Mission and Vision: "Exxon Mobil Corporation is committed to being the world's premier petroleum and petrochemical company. To that end, we must continuously achieve superior financial and operating results while adhering to the highest standards of business conduct. These unwavering expectations provide the foundation for our commitments to those with whom we interact."

27. CHEVRON: Slogan: "Finding newer, cleaner ways to power the world." Mission: "Our Company's foundation is built on our values, which distinguish us and guide our actions. We conduct our business in a socially responsible and ethical manner. We respect the law, support universal human rights, protect the environment, and benefit the communities where we work." Vision: At the heart of The Chevron Way is our Vision to be the global energy company most admired for its people, partnership and performance.

28. GENERAL MOTORS: Mission: "G.M. is a multinational corporation engaged in socially responsible operations, world-wide. It is dedicated to provide products and services of such quality that our customers will receive superior

1&1

Human Resource Planning and Audit

value while our employees and business partners will share in our success and our stock-holders will receive a sustained superior return on their investment." Vision:

"Over the past 100 years, GM has been a leader in the global automotive industry. And the next 100 years will be no different. GM is committed to leading the industry in alternative fuel propulsion." "GM's vision is to be the world leader in transportation products and related services. We will earn our customers' enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people." "Over the past 100 years, GM has been a leader in the global automotive industry. And the next 100 years will be no different. GM is committed to leading the industry in alternative fuel propulsion."

29. CONOCOPHILLIPS PETROLEUM REFINING: Slogan:

"Energy for tomorrow." Mission:

"Use our pioneering spirit to responsibly deliver energy to the world."

30. BANK OF AMERICA CORP: M ission/Ph ilosophy:

"We believe, very simply, that it is the actions of individuals working together that build strong communities ... and that business has an obligation to support those actions in the communities it serves."

31. AT&AT: Slogan:

"Your world delivered. Connecting you to your world, everywhere you live and work." Mission and Vision:

"We aspire to be the most admired and valuable company in the world. Our goal is to enrich our customers' personal lives and to make their businesses more successful by bringing to market exciting and useful communications services, building shareowner value in the process."

32. WAL-MART STORES: Slogan:

"Wal-Mart. Always low price. Always." Mission:

"Wal-Mart's mission is to help people save money so they can live better."

33. MARRIOTT INTERNATIONAL: Slogan:

"Revive"

Corporate Mission and Vision Statements

Mission/Core Values:

Marriott International have core values rather similar to a Mission Statement. "The core values established by the Marriott family over 80 years ago have served our company well and will continue to guide our growth into the future. Foremost of these core values is the enduring belief that our associates are our greatest assets. Core Values » There is a "Marriott Way." It's about serving the associates, the customer, and the community. Marriott's fundamental beliefs are enduring and the keys to its continued success Marriott Culture » It's the Marriott experience. We do whatever it takes to provide our associates with the utmost opportunities and our customers with superior service."

34. AVON PRODUCTS: Slogan:

"Ding-Dong - Avon Calling." Mission:

"We will build a unique portfolio of Beauty and related brands, striving to surpass our competitors in quality, innovation and value, and elevating our image to become the Beauty company most women turn to worldwide." Vision:

"To be the company that best understands and satisfies the product, service and self-fulfillment needs of women - globally."

35. FEDEX: Slogan:

"Relax, it's Fed Ex."

Mission: "Fed~x is committed to providing outstanding customer experience, to being a great place to work, a thoughtful steward of the environment and a caring citizen in the communities where we live and work. At FedEx, we are passionate about sustainable connecting people and places and improving the quality of life around the world."

36. WALT DISNEY: Slogan:

"I'm going to Disney World!" Mission:

"To make people happy." Values:

• No cynicism • Nurturing and promulgation of "wholesome American values"

III

Human Resource Planning and Audit

• Creativity, dreams and imagination • Fanatical attention to consistency and detail • Preservation and control of the Disney "magic"

37. 3M: Slogan: "Innovation" Mission: "3M is committed to actively contributing to sustainable development through environmental protection, social responsibility and economic progress."

38. SONY: Mission and Slogan: "To experience the joy of advancing and applying technology for the benefit of the public."

39. NIKE: Slogan: "If you have a body, you are an athlete" Mission and Vision: "To bring inspiration and innovation to every athlete in the world"

40. STARBUCKS: Mission: "Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow. The following six guiding principles will help us measure the appropriateness of our decisions: • Provide a great work environment and treat each other with respect and dignity. • Embrace diversity as an essential component in the way we do business. • Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. • Develop enthUSiastically satisfied customers all of the time. • Contribute positively to our communities and our environment. • Recognise that profitability is essential to our future success.

41. eBay: Mission: "eSay's mission is to provide a global trading platform where practically anyone can trade practically anything."

Corporate Mission and Vision Statements

42. GOOGLE: Mission:

Google's mission is to organize the world's information and make it universally accessible and useful. Philosophy: Ten Things:

• Focus on the user and all else will follow. • It's best to do one thing really, really well. • Fast is better than slow. • Democracy on the web works. • You don't need to be at your desk to need an answer. • You can make money without doing evil. • There's always more information out there. • The need for information crosses all borders. • You can be serious without a suit. • Great just isn't good enough. Always deliver more than expected.

43. BERGER KING: Mission:

We will prepare and sell quick service food to fulfill our guest's needs more accurately, quickly, courteously, and in a cleaner environment than our competitors. We will conduct all our business affairs ethically, and with the best employees in the mid-south. We will continue to grow profitably and responsibly, and provide career advancement opportunities for every willing member of our organization."

44. YAHOO: Mission:

"Yahoo's mission," it reads, "is to connect people to their passions, their communities, and the world's knowledge".

45. SAINSBURY: Mis5ion:

"Our mission is to be the consumer's first choice for food, delivering products of outstanding quality and great service at a competitive cost through working faster, simpler, and together."

46. CVS CAREMARK: Mission:

We provide expert care and innovative solutions in pharmacy and health care that are effective and easy for our customers. Vision:

We strive to improve the quality of human life.

Human Resource Planning and Audit

47. CANON: Mission: Canon Australia is a market leading supplier of consumer and business imaging solutions. We are a team committed to our customers' ongoing satisfaction through the empowerment and development of our staff. To be the preferred supplier we will be easy to deal with and provide quality, value for money, products and services. To ensure success for all stakeholders we will deliver profitability, growth, job fulfillment and have a positive impact on the community. Vision: Simple advanced solutions freeing people to live their dreams and lead enriched lives at home and at work.

48. THE ESTEE LAUDER COMPANY: Mission and Vision: The guiding vision of The Estee Lauder Companies is "Bringing the best to everyone we touch". By "The best", we mean the best products, the best people and the best ideas. These three pillars have been the hallmarks of our Company since it was founded by Mrs. Estee Lauder in 1946. They remain the foundation upon which we continue to build our success today.

49. GLOBAL GILETTE: Mission: We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper

50. LUCENT TECHNOLOGIES: Mission: Philanthropy supports the social responsibility cornerstone of Lucent's mission: To live up to our responsibilities to serve and enhance the communities in which we work and live and the society on which we depend.

51. ABBOTT LABORATORIES: Slogan: "A Promise for Life" Mission: "To improve lives by providing cost-effective health care products and services." Vision: "Abbott's vision is to be the world's premier health care company. Simply put, we want to be the best - the best employer, the best health care supplier, the best business partner, the best investment and the best neighbour."

Corporate Mission and Vision Statements

52. BOEING: Slogan:

"for-ever New f'rontiers" Mission:

• "Run healthy core businesses. • Leverage strengths into new products and services. • Open new frontiers. • People working together as a global enterprise for aero-space leadership.

III

Human Resource Planning and Audit

LEVEL NINE

DEVELOPING VISION STATEMENTS AND BUSINESS SUCCESS MANAGEMENT GURUS SPEAK: 1. WARREN BENNIS AND BURT NAN US: Warren Bennis and Burt Nanus, authors of "Leaders: The Strategies for Taking Charge", identify vision as a concept central to their theory of leadership. "To choose a direction, a leader must first develop a mental image of a possible and desirable future state of the organization." This image, which we call vision, may be as vague as a dream or as precise as a goal statement. "The critical point is that vision articulates a credible, realistic attractive future for the organization".

2. ROBERT H. MILES: Robert H. Miles, in an article entitled "Corporate Transformation", states "That all successful transformations are vision led. He defines vision in the following way: It requires projection into a dimly outlined future. It requires the creation of goals that stretch the organization beyond its current comprehension and capabilities".

3. STEPHEN

~

COVEY:

Stephen R. Covey stresses the symbiotic relationship between vision and values in an article called Ethical Vertigo published in Executive Excellence, 1997.

4. MARTIN LUTHER KING: The Book of Proverbs warns us: "Where there is no Vision, people will perish", while Martin Luther King demonstrated the power of vision when he immortalised his vision with the words, "I have a dream", and unleashed forces that changed a nation.

5. QUIGLEY: Quigley (1994) defines corporate values as "the rules or guidelines by which a corporation exhorts its members to behaviour consistent with its order, security, and growth ... Values and beliefs are the most fundamental of the three elements of vision". It is true to say that most vision statements express an element of ambition. Whether it is to be "bigger than", to "go from number two to number one", or even "to be the best", an element of achievement is always present. It is obvious from the discussion so far that a vision is more than unfettered ambition or being future oriented. It incorporates cultures, beliefs, value systems and a myriad of force fields. To better clarify our thoughts on this, we must digress temporarily into the field of neuroscience.

6. ZOHAR: The following is a direct quote from Zohar (1997) "Today neuroscience teaches that from the moment of conception we are born with sufficient neural connections to regulate our breathing, our body temperature and the beating of our heart, but

Corporate Mission and Vision Statements

nearly everything else is pure potentiality. What diet we will be fed, what climatic conditions and germs we will encounter, what language we will be exposed to - all these and much more are uncertain at the moment of birth". In practical terms, this means that the newly formed business will rapidly create and construct a language, a culture, and a belief and value system that are a derivative of the environment. 1. as defined by the leader or founder, 2. the social and ethical values of the society (the business environment), and 3. any other force fields that interface or interact with the infant organization.

CASE HISTORIES: 1. SAM WALTON: WAL-MART: In the 1950's, Sam Walton worked, inter alia, in the retail trade for the Chicago - based Ben Franklin Stores. It was during this period that he formulated his vision for a discount store. It was a deceptively simple idea: a discount store with wholesale margins on every product, a store that simultaneously offered easy shopping and friendly service. The linchpin, or critical success factor, was that these stores would be situated in small towns. Sam Walton believed that "there was a lot more business in those towns than people ever thought". (Snyder et. aI, 1994) At the heart of Walton's vision for Wal-Mart were his rock-solid personal values of humility, honesty, frugality and trust. Despite his $9 billion family fortune, Sam held onto his Ford truck, casual clothes, modest ranch style house and simple no frills headquarters in out of the way Bentonville. A. Sam Walton's Three Key Business Principles: Walton's personal values were translated into three key business principles: 1. Provide the customer with value and service in a clean and friendly shopping environment: 2. Create a partnership with associates. 3. Maintain commitment to the community. The critical and irreplaceable ingredient of Wal-Mart's success were the strengths and virtues of Sam Walton himself - his over-riding vision and unwavering values, his courage to take action, and his uncanny ability to motivate and inspire his "associates". Walton was more than a great leader, he was an astute strategist. He searched with painstaking care for every individual who made up his management team. He sought individuals who believed in the discount concept and were dedicated to working long hours to see the vision become a reality. He created an organisation that thrived on innovation and in an atmosphere where people believed in themselves. He embraced technology as a change agent for innovation and remaining competitive. B: Paradigm Success of Wal-Mart: The results speak for themselves. Wal-Mart has succeeded in satisfying not only its customers, but its employees, suppliers, investors, and host communities. Wal-Mart outshines the rest of the industry in growth, sales, earnings, margins, and employee and floor productivity. The paradigm that Sam Walton established has been a winner. The question that remains is, will this paradigm still hold in our rapidly changing world? Or will there come a time when even Wal-Mart will need to break out of its paradigm box?

lID

Human Resource Planning and Audit

2. HEWLETT PACKARD, MATSUSHITA APPLIANCES AND THE BODY SHOP: Bill Hewlett, Konosuke Matsushita and Anita Rodick, all tell the same story. "We did what we thought was right and what came naturally to us. We believe strongly in some key principles and we have worked hard to stamp these on the company. We believe the principles we have been following are the most important part of our business". Hewlett Packard, Matsushita Appliances and The Body Shop were young organisations with no entrenched views and no established culture. The neural connections they made depended on the environment as embodied in the founders, extended stakeholders, and the influence of the political, demographic, economic, social and technological forces active at birth. The paradigm was being constructed, but it would take years for it to solidify into the so - called "paradigm box". A. Conclusion to Case Studies: A number of conclusions can be drawn from the above discussion. 1. The most important is that these apparently different concepts are essentially the same, and the differences between them that do exist are at the periphery and are not significant enough to warrant being treated differently. 2. Purpose, Vision and Paradigm are so much the same that the many arguments to differentiate between them become semantic exercises and academic jargon. Strategic Intent would seem to fall into this category and might be called an exercise in repackaging. 3. It is possible to postulate that the concept of vision goes beyond profits and stakeholders, although, these are an inherent part of it. vision also addresses the community and in some instances even the society as a whole (The Body Shop, Wal-Mart). 4. Ambition and the future are essential elements of any vision. Whether this ambition should be fettered or unlimited is open to debate. Hamel and Prahalad would have it unfettered, whilst Campbell states that it should be a stretch, but achievable. 5. The case studies reveal that vision encapsulates culture and values and beliefs. Just as the atom contains enormous energy which, when unleashed, can be beneficial or destructive, so the paradigm box contains enormous latent power or energy which, if unleashed, can be a powerful force for achievement or disruption. 6. We know and understand why the development and institution of the vision takes time. There are no short cuts. More importantly, because it takes so much time to create the paradigm box, the act of breaking out of it requires tremendous energy and effort. This has serious implications for change programs. 7. Finally, the law of causality insists that if we are to understand the present paradigm box or vision, we need to return to the genesis of the company and reconstruct the initial conditions. Any changes from those initial conditions must be a result of the dynamics of the various force fields and their interaction.

PREPARING TO DEVELOP VISION STATEMENT: A. Creating and Institutionalising the Vision: The importance of the creation of a vision is abundantly clear from the discussion so far. What we need to discuss at this point is - how? How do we establish a Vision for a company?

Corporate Mission and Vision Statements

There are two important aspects to this problem: 1. Establishing a Vision for a newly formed company: and 2. Changing the Vision of an old, established company.

1. Creating a Vision for a Newly Formed Company: As indicated, the neural connections that set up the vision/paradigm of the newly created company takes place in the formative or embryonic and early growth phase of the company. We must ensure that the force fields which interact with our newly established company are the correct ones. The leader plays the dominant role in this regard. Witness the way in which Henry Ford's paradigm for decades was the paradigm of the Ford Motor Company, ditto for Sam Walton (WalMart), Watson (IBM), Ray Crock (MacDonald's), Anita Rodick of The Body Shop, .. , etc. In these early stages, the vision is installed both by design and by adaptation. It is the leader who installs a vision by design, when the neural pathways or architecture are constructed. The adaptation occurs when the external fields exert pressure on the organization to adapt and thus influence the vision/ paradigm, and this will hold as long as the paradigm accommodates the changes taking place within the force fields that envelop the organization.

2. Changing the Vision of an Established Company: How does one change the vision/ paradigm of a well established company that has been around for quite some time? We have noted that the ability to change is very much restricted by the "paradigm box". In the established organization, the founder approach is obviously not possible. Management has to work within the constraints of the existing paradigm and bring about change in an orderly manner. Upon inspection, the literature seems to favour two possible approaches.

3. Approaches: 1. Intellectual Process Approach: The first is the Intellectual Process. This approach brings top management together, who use techniques such as brainstorming, to formulate a new vision, which they then communicate throughout the organization.

2. Focussed Approach: The second method is the Focused Approach. It is a more holistic approach, insofar as due recognition is given to all the possible relationships that exist and interact with one another. The Focused Approach recognizes the existence of a whole range of neural networks. This recognition of the principles that make the founder approach so successful means that leaders who turn to the Focused Approach can likewise "found" a new vision, even if it involves radical change. The starting point of the Focused Approach is to establish the initial conditions. Who was the founder of the organization? What values, beliefs and ethics did that person hold especially important? What was the environment like? What were the driving forces? Who were the stakeholders? What was happening in the social, political, economic and technological environment? The next step is to do the same analysis for the conditions of the present in order to determine what dynamics have been active and whether the original paradigm has shifted.

III

Human Resource Planning and Audit

With this information as backdrop, we are ready to initiate the necessary change Programme. Although we show the change program as a process, it must be remembered that the steps shown are not necessarily sequential and, in all probability, will be iterative.

4. Select an Initial Strategic Focus Point: Something that is very necessary to change in terms of the survival of the organization. For example at Indian Airlines, the initial focus will have to be to get the aircraft off on time, to improve the services delivered by cabin crew and frontline staff, and to ensure that Indian Airlines remain competitive. At the finance division of a major private Indian Bank, the focus was to consolidate hundreds of general ledgers into one, to supply accurate and timely financial information to the operating divisions and the Reserve Bank, and to supply the divisions with financial intelligence to improve their decision-making ability. In both these cases, no formal vision statement was drafted in the initial stages of the realignment of the corporate direction. When selecting a strategic focus point the following aspects were kept in mind: (1) The focus point must be at the core of both the future strategy and the future value system (2) It should be easy to translate into standards of behaviour. (3) It should have strong value associations that are attractive to large sections of management and staff and (4) It should be non- controversial and be able to elicit a wide base of support.

5. Slogans: One Liner Approach to Vision Included in most company vision statements are some forms of slogan, for example, "The quest for Zero defect". This slogan, although, it might not appear so at first glance, is crucial to the establishment of the new vision:

1. Have an action orientation. This approach is, by definition, action orientated. This is in distinct contrast to the intellectual process, which begins with an intellectual exercise, then the downward communication of the results until the majority have bought in, followed by the operationalisation of these ideas in terms of the actions to be taken. 2. Communication must be "Focus" oriented. The reasons for changes to be made at the operational level must be explained, as opposed to exhorting people to change, or worse, explaining some intellectual exercise that most find difficult to comprehend. In a sense this continuous focus oriented communication can be equated to the concept of evangelism and indoctrinisation. Communicating the tangible changes that are being made in order to achieve certain operational goals is the transparent end of the change programme. The changes that are taking place in the culture, values, ethical norms and social architecture are in most cases only apparent to a few at the time of the change. Repetitiveness and focused communication are some of the underlying pillars of success. 3. Concentrate on behaviour. An acceptance of vision comes from the link between behaviour, organization values and personal values. Michael Beer states: "Those who implement successful transformations focus on behaviour rather than simply talk about it"

· Corporate Mission and Vision Statements

1&1

4. Expect it to take time. The time it takes to establish the neural connections or paradigm box and to institutionalise the initial vision stretches well into the early growth phase of the corporate life cycle. It stands to reason that any change programme will similarly take time. The time it takes will be dependent upon the amount of change that has to take place. If it is major, as in a crisis situation, it is conceivable that the duration will be prolonged. 5. Build and sustain Trust. Building trust, says Michael Beer, is a key element in the mobilization of energy for change. The concept of trust must be seen in its wider context. Transparency, open communications, and sharing information are all part of the trust building process. However, let us reiterate an earlier comment. The focal point of everything being implemented in the organization must be the "focus" programme. 6. Create the Vision Statement. At some stage, the vision statement can be formalised and hung on the wall, or may be included in the company's financial statements and reiterated in the chairman's report.

SIMPLY SPEAKING ... 1. It is true to say that most vision statements express an element of ambition. Whether it is to be "bigger than", to "go from number two to number one", or even "to be the best", an element of achievement is always present. 2. It is obvious from the discussion so far that a vision is more than unfettered ambition or being future oriented. it incorporates cultures, beliefs, value systems and a myriad of force fields. To better clarify our thoughts on this, we must digress temporarily into the field of neuroscience.

III

Human Resource Planning and Audit

LEVEL TEN d

EVALUATION OF MISSION STATEMENTS CASE OF ABC BANK LIMITED: The corporate office of ABC Bank is located at Mumbai. It is in operation since 2002. It has 600 branches all over India. The bank is listed on Bombay and National Stock Exchanges and its share with face value @ Rs. 1/- is currently being traded at Rs. 25. During last three years, it has not shown any appreciable movement up or down. The stock does not seem to be favourable with the brokers and the financial institutions and has also not posted any review or evaluation on CNBC-18. During the financial year 2007-08, it posted losses amounting Rs. 328 crores. The bank is expecting to incur further losses during the next financial year. Alarmed by the declining fortunes of the bank, Chairman and Managing Director, Dipankar Ray, called an emergency meeting of the board of directors to review the situation and take immediate corrective actions. The board decided to hire a top and well-known consulting firm to turnaround the bank. He steered several meetings with all functional heads to discuss the internal modus operandi and strategy for liaison with the consulting firm. He formed a team of functional heads and appOinted the head of Human Resource, Gurbir Singh as the chairman of the team to internalize the major issues concerning strategic planning affecting the bank and liaise with the consultants and submit the interim report within thirty days once the consultants take over the charge. Gurbir Singh moved fast and held series of discussions with the consultants. The first report of their observations was submitted to Dipankar Ray within first ten days. Some of these observations, among others, were: • The corporate goals of the bank were not clear and sent confusing signals down the line of hierarchy especially when there is cut-throat and aggressive competition in the banking sector. • The bank had no mission and vision statements since its operations began in 2002. As a result, there is no clarity among employees about the current status of the business of the bank and what lies ahead for them in future. • The bank did not conceptualise the strategic planning in any function and as a result the confusion prevailed in almost all the operations of the bank especially in customer services and human resource management. • Human resource function, by itself, is not equipped with various concepts and professional approach in its policies, procedures and practices. The department has no clarity about human resource strategic planning. • The customer services are very poor. This is proved beyond doubt from the feedback received from the customers in all the braches except in Mumbai. During last three years, many customers have closed their accounts and walk-ins have reduced considerably on account of rude and insolent behaviour towards customers, delay in handling customer complaints, delay in providing general customer services, long serpentine queues, over crowding in the branches, staff moving out of their work stations and not returning for long time, verbal fights and arguments between staff and customers and lack of provision of infrastructural facilities in the branches.

Corporate Mission and Vision Statements

III

Dipankar Ray and Gurbir Singh held meetings with the consultants over the next couple of days. The following important decisions were taken, among others, for immediate action: • Gurbir Singh and his team, in consultation with the consultants, shall design and write mission and vision statements of the bank within next three days for approval of the board of directors and implementation. • The short term and long term goals of the bank would be drawn and decided by conceptualizing the principles enumerated in the philosophy and the practice of Management by Objectives approach so as to involve everyone in their achievement. • Gurbir Singh would take charge of initiating Strategic Planning and Strategic Human Resource planning in collaboration with the consultants and submit a report observations and recommendations within fifteen days. Gurbir Singh, his team and the consultants, as planned, submitted the mission and vision statements to Dipankar Ray. Within next 48 hours, the board of directors approved the statements with some minor changes:

MISSION AND VISION STATEMENT OF ABC BANK: "ABC Bank aspires to be one of the most professional, financially sound and profitable banks in India in three to five years. The bank will grow by meeting the broad financial needs of small and medium enterprises (SME), businessmen, institutional and select individual customers and clients." We shall achieve these mission targets by accomplishing the following:

Our Customers: • Constantly assess customer needs and match them with our innovative and profitable ways to meet their financial requirements through general and customised packages. • Train the existing staff and hire thoroughly qualified people to provide prompt, personal, professional service to our customers. • Conduct business in such a prudent manner that demonstrates stability and promotes customers trust in the bank.

Our Employees: • Ensure a fair measurement, reward and incentive based system to foster the best possible service to our customers.

Our Community: • Serve the role of a facilitator, business leader and responsible corporate citizen, encouraging employees to participate in activities which enhance the community's quality of life.

Our Shareholders: • Provide a continuous long-term source of profitable growth and superior return on investment. • Become a model in the market for prudent lending and operating practices; by growing carefully and selectively, and by maintaining stringent conformance with banking regulations and pOlicies. • Develop and preserve a superior capital position, becoming one of the most financially strong banks in India.

III

Human Resource Planning and Audit

COMPONENTS EVALUATION OF MISSION AND VISION STATEMENT OF ABC BANK: 1. Step One: Evaluation on the Basis of a well conceived Mission Statement: Pearce and David (1987) suggested that the relative strength of a company's mission statement may be determined by how well it communicates with the following nine components: 1. Description of target market. 2. Geographic domain. 3. Products/services. 4. Technology used to produce and market its products and services. 5. Intention to grow and increase shareholders profitability. 6. Competitive strengths. 7. Importance of employees. 8. Guiding principles. 9. Desired public image.

2. Step Two: Analysis and Examination of the Mission Statement of ABC Bank: Let us now examine and analyse the mission and vision statement of ABC Bank while using the above components of a well conceived mission in the module given by Pearce and David:

1. What Does Mission and Vision Statement of ABC Bank Contain: a. Description of target market and geographic domain: ABC Bank statement makes it abundantly clear that its target market is in India only. b. Intentions to grow and increase shareholders profitability: The bank has decided for profitable growth and superior returns on investment. c. Importance of employees: The bank has attached highly considerable value to its employees stating that they are the permanent assets of the organization. d. Guiding principles: ABC Bank has laid down four supporting and compliment guiding principles in its mission and vision statement. e. Desired public image: The bank has committed to compliances under the Indian legal system and ethical and corporate social responsibility

2. What the Mission and Vision Statement of ABC Bank 'Does Not' Contain: a. Products and Services: "Broad Financial Needs" is very general term. The financial services beyond routinely available to the customers are not specifically mentioned. b. Technology used to produce and market its product and services: The mission statement does not mention anything about modernisation of operations, transfer of technology and any other electronic advancement and enhancement required for its operations and general and specific processes. c. Competitive strengths: The mission and vision statement does not mention anything about its unique selling practice (USP) or any other benchmark quality which differentiates it from its competitors.

Corporate Mission and Vision Statements

III

MISSION AND VISION STATEMENTS OF ABC BANK: OTHER OBSERVATIONS: 1. Mission and Vision Statement: Length of the mission statement: While the opening paragraph of the statement is short and concise but the four guiding principles add to its length. However, the statement provides a very good understanding about its commitment towards sustaining growth, ethical and corporate social responsibility and mandatory compliances .

2. Implications of Commitment to Shareholders: The major implication of a very carefully conceived value statement is that stockholders perceive 'positive relationship between mission statement and corporate performance'. There are value statements in each of the guiding principles dedicated to customers, employees, community and shareholders and each one of these demonstrate bank's specific commitment.

3. Implications for the Organization: Glassman and McAfee (2006) observed that "adherence to the fundamental rules of business, as contained in the mission/vision statement can have a significant positive relationship with financial performance of an organization." If ABC Bank follows fundamental rules as contained in its mission and vision statement, it will boost and enhance its customer confidence and strengthen its market share - by demonstrating its willingness to align its operations with its strategic planning, reducing confusion and congestion and by providing working environment to attract quality workforce and higher caliber professionals, reduce employees turnover and expand its customer base including walk-ins.

SIMPLY SPEAKING ... • The mission and vision statement of ABC bank is quite wide and well conceptualised despite its few weaknesses. • The target audience is specific and is targeted very well. • The mission and vision statement demonstrates how an institution can develop well matched assertions that presents a positive image of its vision which shall serve as a solid foundation for its operating strategy and overall strategic planning across the nation. • The mission and vision statement shows bank's dedicated commitment to corporate governance and corporate ethical and social responsibility. • ABC Bank has set new and effective standards in communicating with shareholders, stock exchanges, employees and general public at large. The mission and vision statement of the bank shows a commitment to its shareholders for growth in their profitability. • The bank has attached highly considerable value to its employees stating that they are the permanent assets of the organization and the organization will train its employees in acquiring competencies and skills for offering better customer services and achieving targets in day to day work. • The vision of the bank for future is specific, stating that it shall emerge as one of the most professional, financially sound and profitable banks in India in three to five years. • Since human resources functions and strategies are a means to achieve corporate ends, they need to be tied to, and driven by the corporate role, mission, vision and strategic goals, or else they will simply end up as processes that add overhead, but down increased returns.

III

Human Resource Planning and Audit

• Profit and vision are necessary to effectively motivate a workforce • It is true to say that most vision statements express an element of ambition. Whether it is to be "bigger than", to "go from number two to number one", or even "to be the best", an element of achievement is always present. • It is obvious from the discussion so far that a vision is more than an unfettered ambition or being future oriented. It incorporates cultures, beliefs, value systems and a myriad of force fields. MISSION AND VISION STATEMENT EVALUATION MATRIX OF ABC BANK IN COMPARISON WITH ICICI AND HDFC BANKS BEFORE THE RELEASE OF THE STATEMENT Components

Organization

Customers

Products Services

Markets Declining

ABC BANK

No

No

ICIC BANK

Yes

Yes

No

Yes

HDFC BANK

Concern for Survival, Growth, Profitability No

No

Yes

Yes

Yes

Yes

Yes

Yes

Components Organization ABC BANK

Philosophy No

Technology

Self-Concept

Concern for Public Image

Yes

No

Concern for Employees Patriarchal

ICICI BANK

Yes

No

No

Yes

HDFC BANK

No

Yes

Yes

Yes

Corporate Mission and Vision Statements

lEVEL ELEVEN

-

h

PANTALOON RETAIL (INDIA) LTD: CASE STUDY IN MISSION AND VISION STATEMENTS A. THE BEGINNING 1987 Pantaloon Retail (India) Limited is India's leading retailer that operates multiple retail formats in both the value and lifestyle segment. Pantaloon has ushered a retail revolution in India and its founder • Kishore Biyani is known as India's "King of Retail". Pantaloon's headquarter is in Mumbai. The company currently operates over 5 million square feet of retail space and has plans to increase it to 30 million sq. ft by 2011. Pantaloon has plans to open over 3000 new stores by 2010. Pantaloon's origin can be traced to 1987 when the company was incorporated as Men's Wear Private Limited. The company launched Pantaloons trouser, India's first formal trouser brand. In 1992, Pantaloon launched its IPO. In 1994, The Pantaloon Shoppe - exclusive menswear store in franchisee format was launched across the country. Pantaloon started distribution of branded garments through multi-brand retail outlets across the nation.

B. MAJOR ACHIEVEMENTS OF PANTALOON RETAIL: Major Achievements of Pantaloon Retail: • Chosen as International Retailer for the Year 2007 • Chosen as Emerging Market Retailer of the Year 2007 • Best Employers in India (Rank 14th) in the Hewitt Best Employers 2007 survey. • Best Managed Company in India (Mid-cap) for the year 2006. • Won Images Retail Awards 2006 for Best Value Retail Store, Best Retail Destination, and Best Food and Grocery Store

C. MAJOR BUSINESSES OF FUTURE GROUP:

1. BIG BAZAR: 2001 In 2001, Big Bazaar, India's first hypermarket chain was launched. In 2002, Food Bazaar, the supermarket chain was launched. In 2006, Future Capital Holdings, the company's financial arm launched real estate funds, "Kshitij" and "Horizon" and private equity fund "In division". The company is also planning forays into insurance and consumer credit.

2. FUTURE GROUP: Pantaloon Retail is the flagship company of Future Group. The lines of business of Future Group are:

a. E-Commerce: Pantaloon'S website Futurebazaar.com has revolutionised the e-commerce business in India. It offers a wide range of products at affordable prices. It has been named as Best Indian Website 2007 in the Shopping category by PC World.

Human Resource Planning and Audit

b. Fashion: The group offers a variety of options in fashion. Its brands include ALL, Blue Sky, Central, Fashion Station, Gini and Jony, Navaras, Pantaloons, and Top 10. c. Leisure and Entertainment: Options are: Bowling Co. - state-of-the-art premium family entertainment centre, offering multiple, novel and unique leisure and entertainment options; F 123 - offers a wide range of gaming options ranging from bowling and pool to redemption and interactive video games to bumper cars. d. Well ness and Beauty: Options are: Health Village - a state-of-the art spa and yoga centre; Star and Sitara: Beauty salon for men and women; Tulsi - provides access to the best allopathic, ayurvedic and homeopathic medicinal products; Turmeric - offers beauty products like colour cosmetics, fragrances, herbal and specialty skin items, hair products and bath accessories. e. Books and Music: Future Group's brand - "Depot" offers Books, CDs, and stationery items.

3. PANTALOON MISSION STATEMENT: We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development. We will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments - for classes and for masses. We shall infuse Indian brands with confidence and renewed ambition. We shall be efficient, cost-conscious and committed to quality in whatever we do. We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful.

4. ANALYSIS OF THE MISSION STATEMENT: A. Customers: Under this component the mission statement states about its goal, i.e., evolving delivery formats, creating retail realty, making consumption affordable for all customer segments - for classes and for masses. Thus, mission statement is clear about goals and objectives for customer. B. Product or Services: The product and services offered by Pantaloon Retail is "creating and executing future scenarios in the consumption space" and "creating retail reality". C. Market: The market is "for all customer segments - for classes and for masses" D. Technology: Technology used in retail is very important for maintaining low cost, low inventory and building customer information. This component is missing in mission statement and the revised mission statement is "using the latest technology and information system."

Corporate Mission and Vision Statements

III

E. Survival, Growth and Profitability: Pantaloon's mission statement is clear about survival, growth and profitability and can be found in-"creating and executing future scenarios", "infuse Indian brands with confidence and renewed ambition", and" cost-conscious and committed to quality in whatever we do".

F. Philosophy: The philosophy is clear from "We will be the trendsetters", "We shall infuse Indian brands" and "We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful".

G. Self Concept: From throughout the mission statement Pantaloon has talked about self-concept like "trend setting", "confidence and renewed ambitions"etc.

H. Concern for Public Image: "Creating future scenarios in consumption space leading to economic development", ''trendsetter'' and "committed to quality in whatever we do". These statements say Pantaloon's goals and objectives about concern for public image.

I. Concern for Employee: Here it says about the stake holders but it does not tell about employees.

5. PANTALOON VISION STATEMENT: Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the most profitable manner.

6. ANALYSIS OF THE VISION STATEMENT: A. Value addition for indian customer: The vision statement throws the light on the aspects like delivery of a wide assortment of products covering a wide geographical area covering "Every Indian Consumer". The vision statement also states the fact that the company would deliver products in the most profitable manner such that it will add value to the customer every time he purchases products from Pantaloons.

B. Reduction of Delivery Time of Overhead Cost: It can be said that operations strategies plays an important role in supporting the mission and the vision statement of the company. The strategies adopted by Pantaloons like inventory management, supply chain management, better designing of the shopping malls are all part of the operations and these largely contribute to the betterment of the organization. These components of the mission and the vision statement reduce the delivery time of products, solve the queuing problems during paying of the bills, reduce the overheads, reduce the cost price of the products that are being sold by Pantaloons.

7. MISSION AND VISION: DRIVING FORCE OF PANTALOON RETAIL: The vision and mission statements work as a driving force. At a time when Indian retailers are trying desperately to make cash registers ring. Pantaloon's number for the quarter till December-end tells the story. It is the only Indian retailer that has managed to grow sales by 25%. Its operating margin crossed the 10%-mark, up 1.4% year-on year, while manpower and operating costs fell 1.33% and 1.78%, respectively, despite Pantaloon adding 18 large format stores.

-

Human Resource Planning and Audit

8. STRATEGIC BUSINESS INITIATIVES:

So, the thing which makes Pantaloon to achieve these numbers even in this period of recession is Biyani's, native caution and ability to keep an ear to the ground. In January 2008, when much of India Inc was on a roll, a weekly e-mail communication sent to all employees, Kishore Biyani called for an initiative, Garv Se Kaho Hum Kanjoos Hain (Say proudly we are stingy). The message was part of a flurry of initiatives by Pantaloon Retail to make sure it was completely prepared to face a challenging business environment. As the numbers show, the initiatives seem to have paid off. "Thank god for what we call Kishore Biyani's sixth sense. Early on, he had an inkling of things to come and we kicked in the restructuring and reorganization process quickly. We have revised production norms and are redeploying existing people in new stores," said Sanjay Jog, head of human resources at Pantaloon Retail. This above mentioned statement by head of human resource clearly brings out that how the objectives and procedures of Human Resource department are aligned with the super ordinate goal of the company.

9. THE VISION OF HUMAN RESOURCE FUNCTION: The objective is to help and maintain the organization as a quality organization, which not only recognises and nurtures talent, but also helps retain it. Pantaloons do not believe in layoff their talented employees as they strongly believe in hiring those potential candidates who can absorb the company's vision and mission and the work culture. Pantaloon believes in employee engagement, internal postings and career and succession planning as it increases the loyalty of work force and reduces the cost to hire and train new people. Sanjay Jog, human Resource head at Pantaloon Retail India Limited, agrees: "Employee engagement is not transactional but has to be viewed holistically." Pantaloon has many engagement activities, from education to rewards and recognition. "Eighty per cent of our 18,000 employees are frontline staff and it's important to have value-add at this level especially," he says. The company has employee discounts available even to their families; non-contractual education loans and keeps 30 per cent of compensation as variable. Among other things Pantaloon has an employee insurance scheme that insures them for five times the amount of their cost-to-company. "The emotional connect with the staff is needed nowadays," Jog explains. He concedes that Pantaloon'S low attrition of 23.6 Per Cent proves the effectiveness of the group's rewards programme.

10. LINKING HUMAN RESOURCE FUNCTIONS AND POLICIES WITH ORGANIZATIONAL GOALS AND VISION AND MISSION: A. The Recruitment Ideology: It puts a great amount of emphasis on people relations. While recruiting people, the accent is not just on qualifications, but more on the mindset and attitude of the people. People with functional experience are given more weightage.

Corporate Mission and Vision Statements

1&1

B. The Selection Process: Ours is a three-pronged selection process encompassing psychometric test, group discussions and interviews for freshers are inducted into the company within one day. While for senior professionals 2 levels of interviews are held and candidates are finalized within 2-3 days. The interview first is taken by the manager of that department, it is a technical interview. The second interview is taken by the head of human resource.

C. The Nature of Training Imparted to Freshers: For new employees, our company has a two-day induction program. Further training imparted to fresh recruits is need based, and on-the-job training is provided to recruits who are inducted in specialized areas. Technical and soft skills training are also imparted from time to time to our employees. The training modules thus conducted are either in-house or carried out by specialized agencies.

D. The Appraisal and Evaluation Systems: The organization has a half- yearly Human Resource appraisal, which includes a 360 degrees evaluation for senior management. Besides, there are regular appraisals for all employees, including executives and those of the front line staffs.

E. Motivational Techniques Adopted by Company: We have a generous incentive programme, which has helped us increase productivity by 3040% as well as minimise wastage by 2-3 %. Incentives are offered to all genres of employees, and we have seen that they have greatly helped in raising morale as well as performance.

F. Pantaloons is Different: Professionalism in work environment and direct involvement of management in ensuring employee welfare, are among the key aspects that make us different from our competitors. Besides, the investments that our organization has made for the future as well as the technology that our employees work with make our organization distinct from others.

G. Qualitative Techniques Adopted: More than eight years after it forayed into the retail business, Pantaloon Retail decided to implement SAP to keep itself competitive in the rapidly growing Indian retail market. Successful retailers are those who know that the battle for customers is only won at the frontline, which in the case of a retail chain is at its stores. Pantaloon was regularly opening stores in the metros and there was an urgent need for a reliable enterprise wide application to help run its business effectively. "The basic need was to have a robust transaction management system and an enterprise wide platform to run the operations," says Rakesh Biyani, Director, and Pantaloon. The company was looking for a solution that would bring all of its businesses and processes together. After a comprehensive evaluation of different options and software companies, the management at Pantaloon decided to go in for SAP.

H. Internal Supply: a. Human Resources

1. Accounts for over 8% of the employment pool. 2. The company has envisioned big expansion plans over the next few years.

lID

Human Resource Planning and Audit

3. An attempt to get qualified, skilled personnel led to the launch of 'Seekho- A call to learn", the company's educational initiative.

b. Internal Controls and their Adequacy 1. Well defined organizational structure, documented policy guidelines, predefined authority levels and extensive systems of internal controls to ensure the optimum utilization of the company's resources. 2. Regular reviewing of financial and risk management policies, significant audit findings, the adequacy of internal control systems and compliance with accounting standards.

c. Turn Over Analysis: Strong Management bandwidth with over 70 senior management and over 350 middle management empowered entrepreneur observers recruiting more than 500 people every month.

d. Category Management as an Approach • Pantaloon as a preferred employer of choice in Retail • Balanced Scorecard as a motivation tool: to name a few have their objectives, which cascade from the corporate strategy. Further individuals from respective departments will have his/her scorecard from the departments score card. The employees in the departments will have four objectives and each objective will have a measure. To achieve the objective the employees will be given projects. Therefore in the matrix, if the employee achieves all the objectives, then automatically, the department meets the objective of driving the employees to meet the targets.

Corporate Mission and Vision Statements

MAHINDRA & MAHINDRA LIMITED: CASE STUDY ON IMPACT OF MISSION AND VISION STATEMENT The US $6.7 billion Mahindra Group is among the top 10 industrial houses in India. Mahindra is the market leader in multi-utility vehicles in India. It made a milestone entry into the passenger car segment with the Logan. Mahindra and Mahindra is the only Indian company among the top tractor brands in the world. The Group has a leading presence in key sectors of the Indian economy, including the financial services, trade, retail and logistics, automotive components, after-market, information technology and infrastructure development. Mahindra has recently made an entry in the two-wheeler segment which will see the company emerge as a full-range player with a presence in almost every segment of the automobile industry. Mahindra's Farm Equipment Sector is the proud recipient of the Japan Quality Medal, the only tractor company worldwide to be bestowed this honour. It also holds the distinction of being the only tractor company world-wide to win the Deming Prize. The US based Reputation Institute recently ranked Mahindra among the top 10 Indian companies in its Global 200: The World's Best Corporate Reputations list. Mahindra is also one of the few Indian companies to receive an A+ GRI checked rating for its first Sustainability Report for the year 2007-08.

A. WHAT DRIVES THEM? Vision:

Indians are second to none in the world. The Founders of our nation and of the Company passionately believed this. The company vision to prove them right by believing in themselves and by making Mahindra and Mahindra Limited known world-wide for the quality of its products and services.

Human Resource Planning and Audit

2. Mission: Our Core Purpose is what makes all of us want to get up and come to work in the morning.'

3. Core Values: The company Core Values are influenced by their past, tempered by their present, and will shape their future. They are an amalgam of what they have been, what they are and what they want to be.

4. Good Corporate Citizenship: As in the past, they will continue to seek long term success, which is in alignment with our country's needs. They will do this without compromising ethical business standards.

5. Professionalism: They have always sought the best people for the job and given them the freedom and the opportunity to grow. They will continue to do so. They will support innovation and they'll reason risk taking, but will demand performance.

6. Customer First: They exist and prosper only because of the customer. They will respond to the changing needs and expectations of our customers speedily, courteously and effectively.

7. Quality Focus: Quality is the key to delivering value for money to our customers. They will make quality a driving value in our work, in our products and in our interactions with others. They will do it 'First Time Right'.

8. Dignity of the Individual: They will value individual dignity, uphold the right to express disagreement and respect the time and efforts of others. Through our actions, they will nurture fairness, trust and transparency.

B. MAHINDRA'S HIGH VALUE LEADERSHIP PROGRAMME: The Mahindra Group offers a number of High Value Leadership Lifecycle Programmes for leadership development at key transition points for Managers. 'Bodhi Vriksha' (a place of enlightenment), is a world-class, in-house Management Development Centre that has been set up to promote business values and leadership skills at Nashik.

1. Global Managers Programme: a. Programme Objective: 1. To provide insights into understanding globalisation and its impact on industry. 2. To appreciate the nuances of International Trade and Finance. 3. To give a perspective on International Marketing, Branding and Strategic Planning. 4. To understand the importance of cross-cultural sensitivity.

b. Key Programme Content: 1. International Marketing and Strategic Selling. 2. Customer Relationship Management.

Corporate Mission and VisIon Statements

3. Cross-cultural Sensitivity - Cultural Nuances in China, South Africa, USA, Europe and Middle East. 4. Four T's: Training, Transfer, Teams and Travel. 5. Global Marketplace: Implications for domestic/global marketing strategies/projects. 6. Scenario Planning. 7. Nuances of Legal and Contract Issues.

c. Customer-centric Corporation Programme Objective: 1. To help understand consumer preferences, perception and behaviour. 2. To set frameworks for new product development. 3. To help understand brand equity. 4. To create unique value for the targeted customer. d. Key Programme Content:

1. Understanding customer expectations. 2. Capturing the voice of customers of the Mahindra Group - Benchmarking studies, J.D.Power, CSI, etc. 3. Setting frameworks for new product development. 4. Positioning for competitive advantage. 5. Creating value for competitive advantage. 6. Co-creating value through experience.

HOPI-It

VI~ikSHA

C. 'BODHI VRIKSHA' - MAHINDRA MANAGEMENT DEVELOPMENT CENTRE The potential for learning is limitless. This is the spirit of Bodhi Vriksha, the Mahindra Management Development Centre. Established in 1999, this residential training facility for the Mahindra Group's management staff aims to promote business values and leadership. skills. This is in keeping with the Group's belief that systems and practices must be upgraded constantly to keep pace with the dynamic business environment. . Located 7 km away from Nasik, one of the most favoured industrial destinations in Maharashtra, "The Mahindra Management Development Centre" sprawls across 4 acres of beautifully landscaped terrain. The architecture is charmingly rustic and the infrastructure is ultra-modern, providing the ideal setting for employees to 'Reflect-Network-Develop'. It offers residential management development programmes with a mix of Classroom and Action learning. The Mahindra Management Development Centre was commissioned in April 2005, and since then, over 4500 executives from the Mahindra Group have benefited from its training programmes. 'Bodhi Vriksha' is truly a temple of learning for the Group. The campus also houses the world-class Mahindra Institute of Quality (MIQ) to impart Total Quality Management training to both, the Mahindra

Human Resource Planning and Audit

Group and the Indian industry. The Mahindra Institute of Quality has Japanese accreditation and a top-notch faculty from India and Japan.

INTERNAL SUPPLY: 1. DEFINING MANAGERIAL RATES: Automaker Mahindra and Mahindra (M&M) is also redefining managerial roles and getting rid of redundant posts within the organization. Pawan Goenka, president automotive sector, M&M Ltd, said, "The Company is attempting to simplify its hierarchical structure by doing away with several posts that were created when the times were good. We have done away with about 10% of our designated positions, but without touching any marketing posts." 2. SKILLS INVENTORY: Mahindra Group Believe in Skill inventory and Manpower inventory too rather than hiring skills from outside. They believe in training and developing the skills from time to time as based on the current trends and requirements of the organization which are already available in their buffer, i.e., inventory. D. MILESTONES 1978:- The Company started negotiation with Balania K. Zacharopoulos Ltd., Athens for jointly promoting a new company in Greece for the manufacture of Jeep vehicles and trucks. Initially, it was proposed to assemble these vehicles mainly from CKD packs to be shipped from India. 1979:- 5722764 Bonus equity share issued in 1:1 to proportion. 1984:- Mahindra Spicer Ltd. (MSL), was amalgamated with Mahindra and Mahindra Ltd. (MML) with effect from 3rd April. Pursuant to the scheme of amalgamation of MSL with MML, the shareholders of MSL were allotted 188166 equity shares of MML in the ratio of 1 equity share of MML for every 6 shares held in MSL. The Company entered into a collaboration agreement with Foramer S. A., an associate of Forasol S.A., for purchase of lie d'Amsterdam an offshore drilling rig at a price U.S.$ 75 million. The Company arranged for a foreign currency loan through Bank of Baroda. In view of this purchase, the Company obtained a firm order from ONGC for drilling services for 2 years. 1985:- A letter of intent was obtained for the manufacture of 50,000 Lines of EPABXlPAXs in collaboration with OKL Electric Co. of Japan. The Company also signed a Memorandum of Understanding with the British Telecom P.L.C. of London under which the two companies were to jointly explore and develop opportunities in telecommunication and technical fields in India. 1988:- The Company acquired a off-shore drilling rig lie d' Amsterdam from Foramer S. A., France as on 1st March. A firm letter of intent was received for one land rig for drilling operations at Jwalamukhi, Himachal Pradesh against a tender from ONGC. The Company already entered into an agreement with Forasol S.A., for purchase of a land rig and related equipment 1995:- The Company entered into a joint venture agreement with Ford Motor Company USA (Ford) for promotion of a new Company for the manufacture and marketing of Ford range of passenger and other vehicles. The Company has an equity participation of Rs 160 crores each by Ford and the Company.

Corporate Mission and Vision Statements

l1l.I

1999:- M&M has set up a new company - Mahindra Auto Specialties Ltd

For bullet-proofing passenger vehicles and providing specialised services. The Company consequent to disciplinary action taken by the Management against certain workmen and Union representative, the workmen of Kandivli Plant of Tractor Division of the company initially stopped work and thereafter resorted to illegal strike on 11 th January. 2007:- Mahindra and Mahindra acquires a leading German Forging Company Schoneweiss and Co. GmbH. Mahindra and Mahindra (M&M) has launched the line of sports utility vehicles (SUV) and pickup trucks that it plans to begin selling in the United States starting from 2009.

E. SUCCESSION PLANNING: A key HUMAN RESOURCE function at Mahindra group is the career and succession planning. The objective of this function is to chart out a detailed career path of each individual at the senior most levels. The career path taps both the strengths and weaknesses and aspiration of each individual executive . • The detailed career planning also leads to identification of incumbents as successor to a specific responsibility . • "What we try to do, through our succession planning is the early identification of potential successors and both formally and informally, begin to provide expanded responsibilities so that there is an on-the-job development of a larger perspective and understanding," elaborated Mr. Choudhari.

F. QUANTITATIVE INTERNAL DEMAND: 1. Trend Analysis: Mahindra Group believes in expanding their business and growing with the strategic planning including mergers and acquisitions. As we can clearly depict from the current data given below. 1963:- International Tractor co. of India established a joint venture with International Harvester co. USA 1977:- International Tractor Co of India merged with Mahindra Group to become its tractor division.. 1986:- Tech Mahindra established a joint venture with British Telecom. 2004:- Signed MoU to enter into joint venture with Jangling Motor co. group of china to acquire tractor manufacturing assets from jangling, tractor co, a subsidiary of Jangling Motor co. group. 2005:- Acquire 51 % stake in SAR transmission Pvt Ltd, a Co. engag.ed in manufacturing gear only transmission shafts.

Mahindra Renault Ltd., established a joint venture with Renault to manufacture 7 market Logan, a midsized sedan, in India. Mahindra International Ltd established a joint venture with international Truck 7 Engine Corporation to manufacture trucks and buses in India. 2008:- Mahindra enters into JV with TMI Pacific in Australia 2009:- Acquired 51 % shares of Satyam.

This finally made Mahindra to mark its global presence when in July, it rolled out its 2 millionth vehicle, achieving a significant sales milestone. Finally Mahindra was honored with Super brand 2008 award. Mahindra tractors top USA dealer satisfaction survey. Mahindra holidays travel portal receives lATA certification and a lot more to a large group of Mahindra's credit.

-

Human Resource Planning and Audit

G. INTERNAL SUPPLY: 1. Turnover in Five Years: Mahindra Defence Sales to Cross 2000 Crores

With the launch of a Special Military Vehicle (MSMV) facility here, Mahindra Defence System, a division of Mahindra Group, yesterday said it targets a 5-fold increase in its turnover at Rs 2,000 crore in the 5 from existing Rs 100 crores," Mahindra Defense System CEO Brigadier Khutub. He told reporters. He said the company expects to close this year with the sales of 200 defence vehicles, while it targets to sell 350 vehicles in the next fiscal. The company has an order book of 460 Rakshak's of which it plans to deliver 60 of them in the first quarter of next fiscal. Meanwhile, he said an initial investment of Rs 25 crore has been made in the facility and an additional Rs 15 crore will be put in the next phase. "With the technologically advanced manufacturing facility, MSMV will help Mahindra Defence System to harness the potential in this State," Mahindra Group Vice Chairman and MD Anand Mahindra said. The company currently operates in a single shift which has a production capacity of 500 units. It can further be expanded up to 750 units if the demand arises. He said the company is planning to commence second shift operations next year. The company has a 100% of market share as far as Defense Ministry is concerned for protective vehicles and about 87% market share as far as Ministry of Home Affairs (police and paramilitary forces), he informed. "Brand presence and knowledge about the Indian conditions and the needs of the Indian armed forces will help us to be the No. 1 supplier for MSMV's," Hai said. The company hopes to enlarge on this and continue to provide protective vehicles for the use of police and security forces and the defense, he added. It also has intentions of tying up with the Defense Research and Development Organization (DRDO) to develop a special kind of armoured vehicles by 2017-18. "We have already given our presentation to the DRDO and if plans work out we would move ahead with our future plans," he said without divulging any further details. The company had, 3 years ago, supplied 200 Rakshak's to the Indian Army and about 9 bulletproof Scorpios last year. Admitting to the fact that the demand of the special vehicles has increased post 26/11, He said the company has received an order of 10 Marksman and bulletproof Scorpios and Boleros from the Maharashtra police. On the export front, he said the company had exported about 30-40 vehicles to Ghana, Nepal, Guyana and Sri Lanka last year. The company, which is also looking at establishing another manufacturing facility in Africa to cater to the needs of African nations, will concentrate on exports next year.

2. Dealing with Turbulent Times: Economic Slow Down We have reduced our estimates for Mahindra and Mahindra Ltd. (M&M) on account of a sharperthan-expected slow down in the sales volume growth because of the current global financial crisis. The Company's total sales volume has fallen 8.2% in the festive month of October to 30,139 units. Subsequently, we have downgraded our rating on the Company from Buy to Hold. We believe the current economic slow down and tight liquidity scenario will continue adversely impacting the automobile industry for the rest of FY09 and most of FY10. Though interest rates are expected to decline in the coming months, credit availability will still remain tight as banks are hesitant to provide loans in the current adverse macroeconomic environment. Thus, we expect the Company's sales volume to be in the range of 290-300k units in FY09 and FY10, supported by the launch of the Xylo in late 03'09. Further, M&M's tractor sales are expected to get a boost from the farm loan waiver

Corporate Mission and Vision Stafements

1&1

and the good monsoons during the year. The slow down in the global economy will also have an adverse affect on the Company's subsidiaries. Mahindra Holidays and Resorts India Limited (MHRIL) will be negatively impacted by the current down turn in the global economy, as travellers would be forced to cut their travel and holiday expenses. However, we believe MHRIL will be able to restrict the effect of the current crisis due to its unique business model and a wide network of resorts. MHRIL's base of 85,000 member families provides it with a recurring source of revenue, said V. Handol, Sr. Manager-HR Mahindra group.

lEI

Human Resource Plannmg and Audit

~EVEL

THIRTEEN

WRITING MISSION AND VISION STATEMENTS A. BUSINESS OF BUSINESS IS MISSION: FOUR CASE STUDIES: 1. MUKESH NAGPAL: CEO OF SUPERSONIC MOTOR CAR SERVICES, NEW DELHI: Mukesh Nagpal, the proprietor of his ten years old "Supersonic Motor Car Services" located at Delhi said he attended a two days programme on "Strategic Management" organized by Delhi Management Association. The seminar encouraged him writing mission and vision statements. At the end of the seminar, he decided to take it seriously and followed it up aggressively." Today, he uses mission and vision statements as a guide to serving his customers, promoting his warranty and keeping his employees focussed on respecting customers' cars. His company is all about fulfilling his customers' needs. Mukesh adds an important point about how to always use the mission statement: "Bring your staff together and review the mission statement," he said. "Reinforce why we are here and how we should be here everyday, by reading and discussing it and planning for future."

2. GAUTAM BUNDALlA: MD AND CEO OF OCEAN LIFE STYLE, MUMBAI: Gautam Bundalia, Managing Director and Chief Executive Officer of a gents, ladies and kids ready made garments retail outlet 'Ocean Life Style", at Mumbai since 1999, said "It doesn't matter if you are a one-person business or a large shop with multiple locations. It is still essential to know how you want your business to look and where you want to focus your energy". He has used his organizational mission and vision statements to his fullest advantage. He recently worked out a business deal with "Esprit" to sell its products in his Ocean Life Style. The "Esprit" brand is sold in five continents and more than 40 countries, 640 freestanding stores and over 12,000 wholesale customers. More than 20,000 products are designed each year for 12 product lines for women, men and kids - and in addition a wide variety of licence products for every part of life! He said "lowe the success of this deal to my mission and vision statements. I never stop defining and redefining my vision to look for higher levels of promoting my business. I always ask myself "Does every activity I do in my business serves what I started out to do?"

3. MAN GAL SINGH: CHAIRMAN AND CO-OWNER OF ROYAL STEEL, JAMSHEDPUR: Mangal Singh, the Chairman and the co-owner of "Royal Steel" located at Jamshedpur since 1982, echoed similar sentiments, "Every time you have a business decision to make, you have to have a touchstone, a guide to help you. I believe everyone needs to sit down and figure out exactly why you did this. Write down how you felt when you decided to start your business" He added "It is so tempting to become a chameleon and try to do everything. If you do that, you end up somewhere else, being something else ... not what you wanted to be. The time, effort and work you put into creating your mission statement is one solid thing you can do for your business. Once you do it, everyone can see who you are."

4. BANARSI LAL GUPTA: OWNER-CAFE COFFEE DAY FRANCHISE, LUCKNOW "Banarsi Babu" as he is popularly known among the young college students in Lucknow, has been successfully running his franchise, at crowded college road, "Cafe Coffee Day" since 2003

Corporate Mission and Vision Statements

III

from a premises admeasuring seven hundred square feet. "I have been taking home on an average a net earning of Rs. 3000/- per day on week days and approximately Rs. 6500/- per day on weekends and holidays" he confided "Thanks to your advice you gave me six years ago, I had built and rebuilt mission and vision statements for my franchise which helped me to determine my focus in my business for the present and the future but the worst time came in August 2008, when I started losing my income due to economic meltdown and recession. At that time, I looked again at the mission and vision statements which I had revised in 2007 and had .talked about diversification in my business. Opportunities do arise, and it is always a question of how an opportunity may complement your business or serve your customers in a new way. Changing or adding to a business is a hard decision. But I did it. I rented another premises, five hundred yards away, on the college road and started "Taste of India" a fast food and snacks centre which became very popular among the young school and college students. The mission and the vision statement have opened up new opportunity for me".

B. DO WE REALLY NEED MISSION AND VISION STATEMENTS? ANSWER IS 'YES': We have hundreds of such story tellers who will vouch for the inherent value and the worth of having mission and vision statements. The question is: Do we really need mission and vision statements for 'our business and their continuous value-revaluation for determining our focus for present and for the future perfect? Scores of business planning and strategic experts will state a mission statement is mandatory for your company direction and fund raising. Other advisors suggest writing a mission statement becomes a meaningless few sentences collecting dust somewhere in your office. Is a personal and corporate mission statement necessary for success in today's hostile business climate?

C. THE ANSWER DEPENDS ON WHETHER OR NOT THE MISSION STATEMENT YOU COMPOSE HAS SIGNIFICANT MEANING TO YOU, OR IS IT JUST ANOTHER CORPORATE EXERCISE IN FUTILITY. A mission statement can guide your company in good times and bad. A meaningful mission can act as a moral and corporate compass. It can help you make decisions aligning with your values and goals. Speaker and author, Laurie Beth Jones of "The Path: Creating Your Mission Statement for Work and for Life" states, "It is the key to finding your path in life and identifying the mission you choose to follow. Having a clearly articulated mission statement gives one a template of purpose that can be used to initiate, evaluate, and refine all of one's activities."

D.

WHEN THE ANSWER IS YES: WHAT DO WE DO TO WRITE BUSINESS AND VISION STATEMENTS?

"I think that is a practical way to get started on this process. Th~re is no right or wrong way to begin. Just begin. Buy some pizza and sit down with your staff. If you can't imagine whom to ask for help, bring it to your next door neighbour. The benefit of other's insights will help you see your own priorities more clearly. Don't rush the process because it's not about the words, but about what you truly believe in and want everyone connected to your business to believe in" says Deb Van Batenburg. She is a leadership trainer for the Job Corp. at California.

Human Resource Planning and" Audit

Step One: Collect Information and Feed back: 1. List the organization's core competencies; its unique strengths and weaknesses. 2. List the organization's primary customers, internal or external, by type, not by name. 3. Review how each customer relates to each of the organization's strengths. 4. Write a one-sentence description of each customer/strength pairing. 5. Combine any that are essentially the same. 6. List the sentences in order of importance to the organization's vision, if one exists. 7. Combine the top three to five sentences into a paragraph. 8. Do a pilot study tests with employees, customers, clients, suppliers and the other constituents. 9. Incorporate the feedback from customers, employees and suppliers and repeat the process.

Step Two: Answer Your Own Questions: David Tucker, a Business and Strategic Planning Consultant with Armstrong Consultants, Brazil observes that answering the following questions will help you to create a verbal picture of your business's mission:

1. Why are you in Business? What do you want for yourself, your family and your customers? Think about the spark that ignited your decision to start a business. What will keep it burning?

2. Who are your Customers? What can you do for them that will enrich their lives and contribute to their success in the future?

now and

3. What Image of your Business do you want to Convey? Customers, suppliers, employees and the public will all have perceptions of your company. How will you create the desired picture?

4. What is the Nature of your Products and Services? What factors determine pricing and quality? Consider how these relate to the reasons for your business's existence. How will all this change over time?

5. What Level of Service do you Provide? Most companies believe they offer ''the best service available," but do your customers agree? Don't be vague; define what makes your service so extraordinary.

6. What Roles do you and your Employees Play? Wise captains develop a leadership style that organizes challenges and recognizes employees.

7. What Kind of Relationships will you Maintain with Suppliers? Every business is in partnership with its suppliers. When you succeed, so do they.

8. How do you Differ from your Competitors? What do you do better, cheaper or faster than other competitors? How can you use competitors' weaknesses to your advantage?

Corporate Mission and VisIOn Statements

9. How will you Use Technology, Capital, Processes, Products and Services to reach your Goals? A description of your strategy will keep your energies focussed on your goals. 10. What Underlying Philosophies or Values guided your Responses to the Previous Questions? Some businesses choose to list these separately. Writing them down clarifies the "why" behind your mission.

Step Three: Apply Intelligence and Mind Together: 1. Bring in many Perspectives Get lots of input from the target audience you plan to serve, as well as from your board, staff, and volunteers. This will help you to develop a broad base of support. You can get this input through meetings, surveys or phone calls. Ask people what they think or need in regard to the area of services you plan to offer. 2. Allow Enough Time Time spent now will payoff later. So, don't rush the process. Provide time to reflect on the information you gather, to write an initial draft, to allow key participants to read it, and to make changes. 3. Be Open To New Ideas: Brainstorm This is especially important for the founders of the organization. You may have had tunnel vision while getting your organization set up, but now it is time to get some fresh perspective. Be open to different interpretations of what you should be dOing and new ideas about how to accomplish your goals. Use brainstorming techniques to ensure that all ideas come forward freely. 4. Write Short and only what you need The best mission statements are short and state the obvious. Your statement's length and complexity depends on what your organization wants to do, but keep it as brief as possible. You should be able to use the statement frequently, so make it brief and succinct. As Tony Ponderis of the Fund-Raising Forum says, the mission statement should be "... short enough to remember and easily communicate. Strong enough to inspire." 5. Final Approval: Get the Nod of CEO: Finally, get the seal of approval from the Chief Executive Officer of the company 6. Review Mission and Vision Statements Frequently "The American Heart Association", for instance, reviews its mission statement every third year, but it is changed only every few decades. Cass Wheeler, long-time CEO of the American Heart Association, says in his book, "You've Gotta Have Heart: Achieving Purpose Beyond Profit in the Social Sector,"The environment changes and the organization changes, so a periodic review is important to ensure that there is alignment of purpose and reality."

III

. Human Resource Plannmg and Audit

SIMPLY SPEAKING .... 1. Like anything with lasting value, crafting a mission or a vision statement requires time, thought and planning. 2. Business Mission and vision statements must inspire and motivate. 3. Mission and vision statement must serve as a compass to keep things going in the right direction. It helps you measure your progress, set goals, establish priorities, and know when to use one of the most important words in your vocabulary: "No" 4. Mission and vision statements must provide focus to your purpose. As Henry David Thoreau said, "In the long run men only hit what they aim for." 5. Mission and vision statements must be unconventional 6. Shake things up. Offer new perspectives. Only when you see or hear things in a different way can you see greater opportunities. 7. Keep them simple. If people can more easily understand something, then it's more likely to get things done.

EXERCISE FOR PRACTICE 1. What is the meaning of Mission and Vision? How these two concepts relevant for strategic management in an organization? 2. What is the philosophy behind mission, vision and the organizational strategic Human Resource planning? 3. Why, in these days of global competition, every organization is trying to develop its Mission, Vision and Values statements? What has undergone a change in the corporate sector? 4. What are the various perspectives of Mission and Visions Statements? 5. What is the philosophy of Peter Drucker on Mission and Vision Statements? What are the various features of Mission statements according to him? 6. Critically examine Christopher Bart's philosophy on the use of mission statements and compare and contrast it with that of Bain and Co and De Geus. 7. Explain in detail the Campbell's Ashridge Mission Model. 8. ''To begin with the end in mind means to start with a clear understanding of your destination" Stephon Covey. Explain this with examples. 9. What is 7-S framework model? Explain it with examples. 10. Explain in detail the major features of all the theories of Mission and Vision and Statments. 11. What are the various framework styles of developing Mission and Vision Statements? What factors are relevant for developing Vision Statements? 12. Critically examine the case study of Rahul and Meghna Joshi and write what were the factors responsible for Meghna's success after the death of Rahul Joshi? 13. Pick up any ten mission statements of Indian companies and compare and contrast them with ten mission statements of Fortune 500 companies and write major differences in content formation and business goals and objectives. 14. What are the components of mission and vision statements? Compare and contrast the case studies of Wal-Mart, Hewlett Packard, Matsushita Appliances and Body Shop. 15. Examine the case study of ABC Bank and write your evaluation of its mission and vision statements. 16. "Business' of Business is Mission". Explain this statement citing examples.

STRATEGIC HUMAN RESOURCE PLANNING

Learning Objectives

~fter completion of this cti~Pter, the students~iU.learn t~~J()lIowing

paradi~~ii~ ift from!!~::~~~Jfce pJ~~~t Strat~t:uman

Resource Planning; < • Need of

. . . .... . .

St~ategic Haman Re~8urce

• Models of

Plaqringi

.

CHAPTER FIVE STRATEGIC HUMAN RESOURCE PLANNING LEVEL ONE:

FROM HUMAN RESOURCE PLANNING TO STRATEGIC HUMAN RESOURCE PLANNING

187 - 192

LEVEL TWO:

A STRATEGIC HUMAN RESOURCE PLANNING MODEL

193 - 202

LEVEL THREE:

OTHER MODELS OF STRATEGIC HUMAN RESOURCE PLANNING

203-215

LEVEL Ol\lE

FROM HUMAN RESOURCE PLANNING TO STRATEGIC HUMAN RESOURCE PLANNING 1. HISTORY AND GROWTH OF HUMAN RESOURCE PLANNING: 1. PETER DRUCKER: Why Human Resource Professionals fail to Prove that they Contribute ... ? Throughout the history of the Human Resource (HR) profession there has been a debate that Human Resource professionals have suffered from problems associated with achieving credibility and recognition in their organizations. For example, Peter Drucker noted, as far back as 1954, a constant worry of all personnel administrators to prove that they are making a contribution to their enterprise. He believed that these problems mainly have been due to the Human Resource functional role as an administrative support function, dealing with employment contracts, salaries etc.

2. BERGLUND, 2002; LEGGE, 1995: A. Human Resource is People and not Business Oriented: The Human Resource function has been considered as representing mainly the interests of the employees and thereby been split off from the rest of the organization. According to Berglund this has created a continuous struggle for many Human Resource professionals to re-establish their status and legitimacy in their companies, and reduce the gap by becoming more business oriented.

B. Personnel, Human Resource and Strategic Human Resource Management are same Concepts in a new Bottle: Berglund observed further that this has also sometimes created a willingness to adopt different roles and rhetorics to enhance their legitimacy and strengthen their identity. Throughout the history of the personnel management profession, the world has also witnessed several concepts that have evolved in the profession, starting with Personnel Management and followed by Human Resource Management (HRM), and later Strategic Human Resource Management. Many critics have argued that the different concepts describes the same thing and do not differ extensively from each other (Legge, 1995). Legge noted that Human Resource Management had the same intentions and described the same things as Personnel Management.

3. MABEY, SALAMAN AND STOREY (1998): Mabey, Salaman and Storey (1998) claimed that Strategic Human Resource Management referred to the same intentions that Human Resource Management had from its birth, and argued that the choice to add the strategic component was a rhetoric way of again, emphasising that people could make difference in distinguishing successful organizations from the rest.

4. WREN (1994): FROM WELFARE PLANNING TO HUMAN RESOURCE PLANNING: Human Resource Planning has been discussed in different Human Resource Management contexts for many years. The first documented attempt to establish a plan for the employee development was made in the end of 1800 and was generally referred to as welfare planning.

......,..

Human Resource Planning and Audit

These plans were based on the idea to carefully select, train, and retain employees. In addition they were taking care of grievance and transfers of dissatisfied workers as well as education and management of performance and development records. The ideas sustained and developed but gradually changed name to manpower planning, and later also to Human Resource Planning (HRP). (Wren, 1994)

5. McBEATH (1978): KNOWLEDGE, COMPETENCIES AND SKILL: In 1978, McBeath addressed his view of human resource planning by highlighting a set of issues that he regarded as being important with respect to the human resource planning. These were; 1. An estimation of how many people the organization needed for the future. 2. A determination of what knowledge, skills and abilities that are needed to ensure that the organization can survive and grow . • An evaluation of the knowledge, skills and abilities of existing employees . • A determination of how the company could fill the identified competence gaps.

6. GALLAGHER (2000): FROM JOB ANALYSIS TO SWOT ANALYSIS: A. Human Resource Planning was a Part of Job Analysis and Used as Swot Analysis: According to Gallagher (2000), human resource planning was initially an important aspect of job analysis and was often used as bases for determining strengths and weaknesses among the employees and to develop the skills and competences they needed. As individual career plans started to gain more popularity, companies gradually started to pay more attention to the certain skills and competences among individual employees as a way of dealing with the companies' succession planning. Annual appraisals were made between managers and employees in order to evaluate the current competence and the aspirations and objectives for the future, and a distinction was often made between, what Gallagher refers to as, functional and numerical groups of employees.

B. Functional Theoretical Framework is more Critical to Organizational Success: The functional theoretical framework group was considered as able to perform complex professional and managerial duties, while on the contrast, the numerical groups of employees were regarded as low skilled. Thus, the functional group was being regarded as critical to the success of the organization and as the core group in the succession planning.

7. STOREY (1995): A. Human Resource Planning is Competencies Forecast: Storey (1995) argues that human resource planning today is a very important task of every organization's human resource department. He refers to it as the company's ability to forecast future needs of competence. In this way the company actively scans its current competences and makes forecast for future needs using various techniques.

B. Succession Planning is an Essestial Part of Human Resource Planning: According to him, Human Resource planning mainly involves the identification of skills and competence within the organization, the filling of identified competence gaps, and the facilitation of movements of employees within the organisation. An essential part of the human resource planning is, according to him, the succession planning which aims to ensure the supply of individuals and filling of gaps on senior key positions when they become vacant, and to transfer competences to areas where they are most valued.

Strategic Human Resource Planning

2. WHY WE NEED STRATEGIC HUMAN RESOURCE PLANNING? A.

Important Component of Strategic Human Resource Management:

Strategic human resource planning is an important component of strategic human resource Management. It links human resource management directly to the strategic plan of an organization. Most mid to large sized organizations have a strategic plan that guides the organization in successfully meeting its mission. Organizations routinely complete financial plans to ensure they achieve organizational goals and while workforce plans are not as common, they are just as important. Even a small organization with as few as ten staff can develop a strategic plan to guide decisions about the future. Based on the strategic plan, an organization can develop a strategic human resource plan that will allow human resource management to make decisions to support the future direction of the organization.

B. Important Tool for Human Resource Management Budgeting: Strategic human resource planning is also important from a budgetary point of view so that we can factor the costs of recruitment, training, etc., into our organizational budget.

C. Human Resource Function Understands and Supports the Direction in Which an Organisation is Moving: A comprehensive human resource strategy plays a vital role in the achievement of an organisation's overall strategic objectives and visibly illustrates that the human resource function fully understands and supports the direction in which the organisation is moving. A comprehensive human resource strategy will also support other specific strategic objectives undertaken by the marketing, financial, operational and technology departments.

D. Adds Strategic Value to Organisation: Strategic human resource planning will add value to the organisation if it: 1. Articulates more clearly some of the common themes which lie behind the achievement of other plans and strategies, which have not been fully identified before. The first of these areas will entail a careful consideration of existing or developing plans and strategies to identify and draw attention to common themes and implications, which have not been made explicit previously 2. Identifies fundamental underlying issues which must be addressed by any organisation or business if its people are to be motivated, committed and operate effectively. The second area should be about identifying which of these plans and strategies are so fundamental that there must be clear plans to address them before the organisation can achieve on any of its goals. These are likely to include: (i) Workforce planning issues. (ii) Succession planning. (iii) Workforce skill plans. (iv) Employment equity plans. (v) Pay levels designed to recruit, retain and motivate people.

Human Re.source Planning and Audit

(vi) Equal pay for equal work. (vii) A grading and remuneration system which is seen as fair and giving proper reward for contributions made. (viii) Wider employment issues which impact on staff recruitment, retention, motivation, etc. (ix) A consistent performance management framework which is designed to meet the needs of all sectors of the organisation including its people. (x) Career development frameworks which look at development within the organisation at equipping employees with "employability" so that they can cope with increasingly frequent changes in employer and employment patterns. (xi) Policies and frameworks to ensure that people development issues are addressed systematically such as competence frameworks, self-managed learning, etc.

3. WHAT IS STRATEGIC HUMAN RESOURCE PLANNING? Strategic Human Resource Planning is a process which integrates human resource management strategies and systems to achieve the overall mission, strategies, and success of the organisation while meeting the needs of employees and other stakeholders.

4. WHAT ARE THE OBJECTIVES OF STRATEGIC HUMAN RESOURCE PLANNING? A. Ensure adequate human resources to meet the strategic goals and operational plans of an organization - the right people with the right skills at the right time.

S. Keep up with social, economic, legislative and technological trends that impact on human resources in an organisation. C. Remain flexible so that an organization can manage change if the future is different than anticipated.

D. Strategic human resource planning predicts the future human resource management needs of an organization after analysing the organization's current human resources, the external labour market and ,the future human resource environment that the organization will be operating in. E. The analysis of human resource management issues external to the organization and developing scenarios about the future are what distinguishes strategic planning from operational planning. F. Three basic questions are significant to start thinking about initiating the strategic human resource planning Process. 1. Where are we going? 2. How will we develop human resource strategies to successfully get there, given the ci rcu mstances? 3. What skill sets do we need? In addition, the human resource strategy can add value by ensuring that, in all its other plans, the organisation takes account of and plans for changes in the wider environment, which are likely to have a major impact on the organisation, such as: • changes in the overall employment market - demographic or remuneration levels. • cultural changes which will impact on future employment patterns.

Strategic Human Resource Planning

• changes in the employee relations climate. • changes in the legal framework surrounding employment.

-

• Human Resource and employment practice being developed in other organisations, such as new flexible work practices. Finding the right opportunity to present a case for developing a human resource strategy is critical to ensuring that there will be support for the initiative, and that its initial value will be recognised by the organisation. Giving a strong practical slant to the proposed strategy may help gain acceptance for the idea, such as focussing on good management practice. It is also important to build "early or quick wins" into any new strategy. Other opportunities may present the ideal moment to encourage the development of a Human Resource Strategy:• a major new internal initiative could present the right opportunity to push for an accompanying human resource strategy, such as a restructuring exercise, a corporate acquisition, joint venture or merger exercise. • a new externally generated initiative could similarly generate the right climate for a new Human Resource strategy. • In some instances, even negative news may provide the "right moment", for example, employee dissatisfaction expressed through a climate survey.

5. MAKING THE HUMAN RESOURCE STRATEGY INTEGRAL TO THE ORGANISATION: The human resource practitioner should ensure that the human resource strategy is integrated with broader organisational objectives. Above all, it should ensure that the rest of the organisation accepts the Strategy. To achieve this objective, practitioners should:• consult all stakeholders on the nature of the strategy; • cultivate and develop allies and supporters of the strategy through the consultation process; • focus on the benefits which are being derived from the strategy through talking to and persuading others, and by marketing the benefits of the strategy with concrete examples of how it has helped; • check that there is real commitment to the strategy at all levels of the organisation; • give regular feedback on the implementation of the plan through employee newsletters, exhibitions, etc. • where possible, build into the strategy quantifiable outcomes which can be easily monitored and evaluated, so that it is possible to show the effect; and • make the strategy part of the induction process - especially for senior managers.

6. A STRATEGIC HUMAN RESOURCE PLANNING MODEL: There is no single approach to developing a human resource strategy. The specific approach will vary from one organisation to another. The model below identifies six specific steps in developing a human resource strategy:-

Human Resource Planning and Audit

1. Setting the strategic direction. 2. Designing the human resource management system. 3. Planning the total workforce. 4. Generating the required human resources. 5. Investing in human resource development and performance. 6. Assessing and sustaining organisational competence and performance.

SIMPLY SPEAKING ... While human resource strategies must be developed to support the achievement of the organisation's objectives, it is a two-way process. Human Resource strategies can themselves be critical inputs in determining the strategic initiatives for the organisation. A fatal error, however, is to develop and implement Human Resource strategies without having regard for the goals and objectives which the organisation has explicitly or implicitly identified. A common mistake is the development of work place skill plans which are not linked to any strategic goals or objectives or which have no affirmative action components. Similarly, the isolated identification of affirmative action numerical targets without first conducting a workforce and succession planning exercise is in most instances, simply meaningless.

Strategic Human Resource Planning

LEVEL TWO d

STRATEGIC HUMAN RESOURCE PLANNING IN ACTION AT MANNAT SECURITIES AND ASSETS MANAGEMENT: CASE OF CHAMPAK LAL BHUMIA AND DR. MUNGHERI LAL Mannat Securities and Assets Management, a non-banking finance company (NBFC), was established in 1999 at Mumbai with branches in Delhi, Chennai and Ahmedabad. The company was in business of trading shares in Capital (equity) Markets and offering advisory services to their clients in managing their investment portfolio in equities and Mutual Funds under Portfolio Management Services (PMS). The company had the membership of Bombay, Delhi and Ahmedabad stock exchanges. Mannat Securities started its operations with the staff strength of 25 persons which gradually rose to 105 over a period of 5 years. Champak Lal Bhumia, Managing Director, had spent 25 years in equity trading under well-known stock brokers in Ahmedabad and Mumbai. He came from a very traditional and semi-literate Gujrati family. His father did not let him complete his education beyond 8th standard and got him employed under a seasoned stock broker in Ahmedabad. Ten years later he shifted his base to Mumbai to join as a partner with Mumbai's top stock broker Narotambhai Shah of Royal Securities. He left Narotambhai in 1999 and launched Mannat Securities. Champak Lal was extra-ordinarily gifted with his art of making money even from the smallest transaction at Dalal Street In mid-2000, he hired Dr. Mungheri Lal as the Vice-President and Head of Human Resource Management. Champak Lal was convinced that human resource could transform his company's image from a broking firm to a professionally managed non-banking finance company. Dr. Mungheri Lal had 15 years experience in human resources in manufacturing set up. After initial period of settling down and understanding the company's business and the operations of stock markets, he got into action to identify what can make Champak Lal's dream come true. He started from scratch. He drafted mission and vision statements, wrote values and the code of conduct, got into corporate goal setting and planning, performance management, setting recruitment standards, employees training and welfare. Ten months later, both Dr. Mungheri Lal and Champak Lal were confident that human resource initiatives had started showing some results at Mannat. By mid-2001, Dr. Mungheri Lal had established human resource impact in almost every function of the company. He felt secured and satisfied and was happy that Champak Lal's dream was almost coming true and was a matter of time. He realised that sooner or later he will have to embark upon translating plain vanilla Human Resource into 'Strategic Human Resource Planning' with carefully articulated and customised systems and processes. He took next 3 months to prepare a blueprint and decided to share his views with the managing director and win his approval to go ahead. A week later, he sought a meeting with Champak Lal. During their meeting, Dr. Mungheri Lal shared his plans and got his boss's views. Champak Lal got into a detailed discussion with him and asked for several modifications and additions in the blueprint and gave his final approval. Dr. Lal, sensing the trend of their meeting and the grinning mood of his boss, collected his courage to ask him something which he had in his mind but had not cherished at all over a last couple of months "Sir, this concept of 'Strategic Human Resource Planning'

11.1

Human Resource Planning and Audit

which you have approved, cannot succeed unless the human resource function is in tune with the business of the company and the goals of the human resource are aligned with the business goals of the company. This is not possible if you do not invite or ask me to participate in the day to day business meetings and the transactions of the company like marketing, finance or any other function does. If human resource continues to be a back office support function and does not transform itself into business and revenue generation department, it is very difficult to see that the strategic human resource management would be successfully implemented "Dr. Mungheri Lal looked up to see the reaction of his boss. "Come on Dr. Lal, I am pretty serious about what you have just said. You are here with us for last 18 months. I am very you happy with your performance. A fairly big part of my dream is about to be realised. You have full credit for this. But tell me frankly, how much do you know about the business of the company? According to my assessment, I have never seen you enthusiastic about it. Three months are good enough to know the business of the company on one's finger tips. I personally feel that human resource has given our company a professional credibility. Like any other chief executive, I also feel that human resource provides a support system to other departments and functions and therefore, it has nothing new in its kitty to prove that it can ever become revenue generation part of the business of the company. However, I am quite open on this issue. Show me your enthusiasm, information, knowledge and above all, your seriousness about it; I will support you in putting human resource at par with marketing, sales and finance" Champak Lal sounded serious but relaxed. Five minutes later, Dr. Mungheri Lal was out of the conference room. He was not feeling comfortable. He believed that any such initiative has to come from the top and his boss would have done it if he desired to do so. He was not happy with the way Champak Lal blamed him. He had an excellent, practical and down to earth strategic management model for the company. He decided to implement it, bid his time and then leave the organisation. Should Dr. Mungheri Lal have taken the initiative to be a part of company's business to add value to his Human Resource philosophy and strategic management or should Champak Lal have invited or involved him in the day to day business affairs of the company? It's a million dollar question.

DR. MUNGHERI LAL'S STRATEGIC HUMAN RESOURCE PLANNING MODEL: 1. The Preparation: The human resource function of the company shall take the following" strategiC actions to ensure that the Human Resource Strategic Planning is integrated with broader organisational objectives and it is accepted by the employees at all levels: 1. Consult all stakeholders and the top management team on the nature of the strategy and how it would be implemented. 2. Cultivate and develop allies and supporters of the strategy though the consultation process. 3. Focus on the benefits which are being derived from the strategy through talking to and persuading others, and by marketing the benefits of the strategy with concrete examples of how it has helped or will help in future. 4. Take people into confidence through discussions that there is real commitment to the strategy at all levels of the organisation.

....

Strategic Human Resource Plannmg

-~

5. Tell people that there would regular feed back on the implementation of the plan through employee newsletters, meetings, coriferences, etc. 6. Build into the strategy quantifiable outcomes which can be easily monitored and evaluated, so that it is possible not only to realize the results but also to show the effect of the planning. 7. Make the strategy part of the induction process at all the levels. 8. Keep it simple for the people to understand and internalise.

2. Human Resource Planning Model: The strategy is based on the objectives of the company and the empirical data analysis collected through discussion with employees at various levels. The model identifies six specific steps in developing human resource strategy:1. Setting the strategic direction. 2. Designing the Human Resource Management System. 3. Planning the total workforce. 4. Generating the required human resources. 5. Investing in human resource development and performance. 6. Assessing and sustaining organisational competence and performance.

A Strategic Human Resource Management System Strategic Direction

HRM System

Planning the Total Workforce

The strategic direction and outcomes that the organisation seeks to achieve.

Shaping HAM for organisation Success

Deciding the numbers and competence of personnel the organisation requires

r-~-s -e-S-Sl-ng-an-d-s-u-s-ta-In-In-g- - "'" ~~ •

Organisational Competence and Performance

Measuring the organisation's progress towards its desired outcomes and adjusting the system accordingly

...

Generating Required Human Resources Attracting, accessing and initially assigning the people needed in the organisation's total workforce

t Investing In Human Resource Development and Performance Developing and reinforcing competence and performance in individual groups and teams in the organisation's total workforce

III. "

Human Resource Plannmg and Audit

.; ,