Till recently, the head of my company used to send me signed birthday greetings every year. The first year I was mildly touched. But it quickly became apparent that this was a proforma exercise, since many colleagues received similar letters — plus, there were several birthdays on which I was roundly ticked off for page errors by the signatory soon after I received the warmly worded greetings. This was clearly a morale-boosting exercise thought up, no doubt, by a zealous HR manager at a time when the expanding demand for journalists had raised attrition rates.
Thankfully, I no longer receive these birthday letters, but it was a useful indicator of the approach to people management pretty much anywhere in the world. Every time the economy starts expanding and companies up their hiring, HR managers appear to rediscover the importance of the employee.
Of course, the arid label of “employee” is increasingly being jettisoned. Today they’re either referred to as Talent or Human Capital (capital letters included) depending on the ideological proclivities of the corporation and the shortages in each industry (it is notable that neither term has stormed the bastions of government; it continues to have its ponderously titled ministry of personnel, public grievances and pensions). This year, with the Asian economies in expansion mode, the World Economic Forum at Davos even held a session on the subject with one consultant naively coining the awkward term Talentism as a replacement for capitalism.
Seasoned managers will smirk at this. People are and always have been at the heart of any corporation; it’s managements that have ricocheted from overlooking this fact to recognising it depending on the business environment and related externalities. In the US, for example, the hard-nosed hire-and-fire polices as practised by the Whiz Kids at Ford Motor Company in the fifties occurred at a time when the cost of capital was low and returning GIs created a vast employment pool. By the eighties, you had Tom Peters-type consultants writing about exemplary kinder, gentler corporations (these were post-Volcker years when interest rates nearly doubled and Japan became a significant threat). This thought gained currency and sophistication over the nineties and noughties as the US economy expanded, until now when American employers are leveraging low capital costs to invest in technological efficiency and employ people outside their country.
In India, the evolution of personnel policy into talent management has a distinct fault-line in the pre- and post-liberalisation years. Pre-liberalisation, HR management was a fairly vapid affair that was limited to payroll management with highly discretionary hiring and reward structures, inevitable in an environment dominated by family-owned businesses. CEO-employee interactions were limited to the odd annual picnic or annual meet and so on.
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Post-liberalisation, with Indian firms forced to compete both domestically and globally, much of this changed. But this time, the new best practices came from the globally competitive IT sector — especially in the back offices that competed for the services of India’s scarce English-speaking youth. The frequency of CEO engagement with their staff increased considerably — quarterly Town Hall meets have become a standard in most large corporations. Employee benefits, too, became lavish in terms of numerous allowances and performance awards (it started with complimentary meals, then graduated to overseas trips; today they even include cars and two-wheelers). These abruptly abated with the Asian currency crisis but when the dot-com boom saw loose-fisted venture capitalists willing to back anyone with half an entrepreneurial idea, companies keen to retain talent came out with the employee stock option, a fad that faded once the tax laws changed. Predictably, many of these good-to-have elements disappeared abruptly with the dot-com bust and only made a comeback with the post-2003 boom.
The significant point about the 2008 slowdown was that the response from India Inc’s HR departments was not knee-jerk. Many struggled not to cut salaries and the other employee goodies when revenues shrank. They opted instead to squeeze other costs, notably vendor and raw material contracts, before examining the salary cut or pink slip option. In contrast to earlier slowdowns, top managements also worked at strategies to communicate their message down the line as sensitively as possible. Maybe they were aware that, for India at least, the slowdown was going to be short-lived. But as a people management trend, it is surely healthier than the mood swings of yesteryear.