Is the employee the new king?

WORKPLACE: In services economies the old rules may be changing.

Has the rise of the services sector seen employers change their human resource management practices and dilute their earlier 'customer is king' mantra in favour of 'employee is king'?

Yes, says Jagdish Sheth, professor of marketing at Goizueta Business School in Atlanta's Emory University, and an authority on strategic thinking and customer relationship management.

At a recent lecture delivered in Bangalore at the invitation of the Karnataka Employer's Association, Sheth said human resources in a service economy are seen as a revenue producer and hence a resource"" in which companies must invest (whereas they were earlier looked upon as a cost centre) to enhance their quality and encourage them to stay on.

A company becomes an employer of choice by exceeding employee expectations better than the competition. While expectations rise with increasing satisfaction levels, firms need to continuously exceed employee expectations. According to Sheth, to become an employer of choice"" and attract and retain talented employees"" a company needs to improve on its 'bedside manners' and career offerings, and invest in employer branding.

Indraneel Mukerjee, founder and CEO of iProdigy, a Bangalore-based learning and consulting organisation that offers corporate training services, argues that a happy employee will ensure happy customers""an argument in support of Prof Sheth's. This change in attitude is in line with the changing demands of all stakeholders who include the employer, the employee, vendors, customers and others, says Mukerjee.

However, there are HR professionals who dispute Prof Sheth's contention.

"Any service-oriented industry"" especially IT and BPO"" is known to pamper employees, but not many claim that employees are more important than the customers. It is just that they are equally important and are key stakeholders for the company," says Madan Padaki, co-founder and director of MeritTrac Services, a Bangalore-based talent assessment firm.

Padaki argues that while an employee-friendly attitude is important, going overboard would really not work.

"Keeping close track of the needs of employees and keeping them comfortable at work is what is really expected. Many a time, employees take this attitude for granted and could work against the interest of the company," he believes.

The IT and IT enabled Services industry has been witnessing this over the last two years, he says.