Friday, March 7, 2014

Giftivism


Everything has been price tagged these days to the extent that anything can be bought if we are ready to pay the right price for it. Pavi Mehta, a story teller from the family of ophthalmologists, author of “Infinite Vision” and a leader of non-profit organization Service Space, talks about the concept of pricelessness of kind gestures and joy of giving in this video. She talks about the fact that we can have human guinea pig, we can kill an endangered species animal and what not for suitable price. In all of this, what happens to the priceless? Things that do not come with a label and which have value rather than price. Sensitivity has become a rare thing. She talks about the relevance of the famous quote by Oscar Wilde: “Nowadays People know the price of everything and value of nothing”, in the present context. She points out that even if we look at the profit numbers, as we love to relate everything with efficiency, effectiveness and profit, we can see that 30 billion dollar is lost yearly in productivity due to this individualism, disconnection and lack of collectivism There are a few incidents described in the talk that demonstrate how technologically advanced human race has become and at the same time how emotionally backward we have become like the case where John who survived suicide attempt from the bridge and confessed that if that day anybody would have smiled at him, he would not have jumped the bridge including the lady who told her to take her picture and left without noticing that he was going to commit suicide by jumping off the bridge . Pavi says that may the beauty we love, be what we do. And so what is it that we can actually do?

Our sense of purpose doesn’t lie in our commodity, it lies in our communion. We need to find the angel in every one of us and every now and then rediscover something which is known to all of us, gives us immense pleasure but is lost in the busy lifestyle. The concept of Giftivism – radically generous acts that change the world. Contrary to the general economic theory which assumes that people are essentially selfish, Pavi says that given a chance and context people want to be selfless. She talks about how Service space was born in Silicon Valley at the heights of dot com boom with this very notion. It built websites for non-profit organizations and causes free of cost as a gift. It has served a lot in monetary sense from then. It has been built on three principles: Stay volunteer-run, don’t fundraise and focus on small acts. People said that they won’t scale but they proved otherwise. It proved to be an ecosystem for good having more than 500,000 members in different services like Good news service, Karma tube, small acts of kindness etc. She explains how the group discovered that generosity is generative through initiatives like generosity kitchens or restaurants. The concept seemed unusual but in such restaurants a customer was presented with zero dollar bill and a note that your meal is free and a gift from the person who dined before you and you can contribute if you want to gift the same to the next person. This is amazing because this model sustains without being rational and defies all laws of business and economics. This is testimony to the fact deep down our hearts we are good and generous creatures.

Giftivism relies on four key shifts as Pavi talks about them in this video. The first shift is from Consumption to contribution. We are hard wired to contribute. Generosity is not zero sum game. We feel good by willful giving the same way we feel after consumption which is by the way also backed by neuroscience. Pavi quotes incidents like swap of business class to economy class seats in a flight with an elderly lady. She also talks about finding this generous act within and searching for things that we can give and share. It would straightaway give the much needed joy of purpose in this so called purposeless modern world. A few initiatives in this direction are elucidated in the video like smile cards etc. The second shift is from Transaction to trust. Karma kitchen is an excellent example of the same. When you trust in continuity of the cycle of generosity, it pays dividends and blossoms into a bunch of flowers of kind gestures that you would not have imagined while laying the seed. The third shift is from Isolation to community. It is the translation from me to we as explained by Pavi. When we think of community and group the productivity increases and the sum of individuals is always greater than the individuals themselves. This is the power of synergy. Fourth shift is from Scarcity to Abundance. This leads to the discovery of radically new possibilities. Pavi talks about her grand uncle, Dr. Govindappa Venkataswamy, who had a vision of eradicating blindness from the country. He said that we are not going to turn anybody who comes for treatment. With a noble start he built the todays Aravind eye hospital that has a unique model where people who can afford to pay also pay for the treatment of the deprived. The success of this model itself makes business community and educationists from Harvard and other b-schools scratch their head and take this up as case study.


Pavi stresses on the fact that what we will do for love will always be far more powerful than what we do for money. There is paradigm shift required from market economy to a gift ecology. Pavi ends her talk with a question to the audience: What is your giftivist resolution? She says for once change yourself and see that you have the power to change the world. This talk is not only inspirational but a reminder for us that small little things can transform the world in which we live. It’s us who can bring this change. We need to start now, may be with a small gesture, and may be even by thanking her for making us realize the same. A big “Thank You” to Pavi Mehta.

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_______________________________________________________________________________
गुड्डू रंगीला 
Knowledge Partner
Charcha Kendra

Monday, March 3, 2014

Environmental Impact Analysis

Management tool for ensuring optimal use of natural resources for sustainable development. EIA is now mandatory under Environment (Protection) Act, 1986 for 29 categories of developmental activities involving investment beyond certain thresholds. Initially in India it was introduced for river valley projects only. EIA is done for analysing social, environmental and economic impacts of a project in the process of project planning. Generally done by developer but sometimes by environmental consultants also.

This includes:-
·         Description of project location, design, scale, size etc.
·         Description of significant impacts
·         Mitigating measures
·         Non-technical summary

2 stages- preliminary assessment, detailed assessment

Report requirements, contents and actions
·         Environmental norms and regulations regarding pollution
·         Impact of project on ambient air and water quality
·         Proposal of Public hearing through notices for polluting activities to incorporate suggestions
·         Monitoring mechanism for ensuring compliance

Potential projects requiring EIA
·         Land use and land pattern altering and working population concentrating projects
·         Projects requiring upstream development or downstream industrial development
·         Hazardous material related projects
·         Those near areas of ecological, cultural, religious, heritage or urban importance
·         Projects with various units

Approval required from both Central and state governments ensuring optimal utilisation of natural resources and incorporating remedial measures.

Environmental appraisal

Appraisal committees have been formed for mining, river valley hydropower, industrial, thermal power, infrastructural and nuclear projects. Appraisal process includes Site clearance and Environmental clearance by site visits and study.

Monitoring of cleared projects is done by regional offices located at Shillong, Bhubaneswar, Chandigarh, Lucknow, Bhopal and Bangalore.

Delegation of power is done to State government by central government for co-generation plants, power plants, coal based plants (up to 500 MW), naptha based plants (up to 50 MW)


Documents required are project report, site clearance, NOC, EA questionnaire, EAI report, Risk Analysis and Rehabilitation plan.

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गुड्डू रंगीला 
Knowledge Partner
Charcha Kendra

Environmental Management System


Standards

  • BS7765
  •  EMAS ( European Union’s Eco-Management and Audit Scheme)
  • ISO 14000 series

EMS is a system designed to

  • Meet the regulatory and legislative requirements
  •  Improve the control of environmental impact
  •  Giving out positive signals to consumers that products and service are manufactured with least negative impact on environment
  •  Give competitive edge in changing environment in marketplace
  •  Reducing the environmental costs
  •  Gain media and public support


Plan-Do-Check-Act Model

Core elements of EMS

  •  Environmental policy
  • Environmental Action Plan
  •  Environment related Organisational Structure
  •  Integration of Environmental Concern


Benefits of EMS

  • Improved environment performance
  •  Enhanced compliance
  •  Prevention of pollution
  •  New customers
  • Increased efficiency/reduced costs
  •  Enhanced employee morale
  • Enhanced image in public
  • Employee awareness
  • Cost reduction in terms of insurance costs as insurance firms are increasingly excluding environmental/pollution incidents

Certifications are issued for compliance based on addressing of non-conformities, training for all staffs etc.
Regulatory compliance is monitored by surveillance audits (ISO 14010,11,12) which includes interviewing key people involved in EMS, checking the action plan, implementation scheme, effectiveness of EMS and actions taken for non-conformities.

EMS Document
  • Environmental Management Manual
  •  Clarifies responsibilities
  •  Is useful for audit purposes
  •  Effective for training of new employees
  •  Approval of licenses become easier
  • Used for marketing purposes


ISO 14000 Series
ISO was formed in 1947 and has more than 100 member countries each represented by respective country standards body. It has developed many standards including the famous QMS standard ISO 9000. It considers three main principles while developing standards namely consensus, industry wide applicability and voluntary nature. ISO formed SAGE (Strategic Action Group on the Environment) in 1991.

Principles and Structure
  • Understand all activities and principles of the organisation
  •  Identify potential aspects associated with the activities and assess their impact
  •  Determine the processes that can be controlled to minimize the adverse impacts
  •  Identify the regulatory requirements and the tolerance limits
  • Establish monitoring mechanism
  • Establish corrective actions
  • Establish emergency systems
  • Establish verification system to check EMS is working fine
  • Establish documentation

Categories of standards
  • product based
  • process based

Types of standards
  • Normative –guidance that can be audited (only ISO 14001 in 14000 series)
  •  Informative—guidance that need not be audited (rest all in 14000 series)


ISO 14001 has 17 general requirements or clauses and 3 annexes.

Steps involved in the establishment of an EMS
  1. Obtain management commitment
  2. Review current environmental programs
  3.  Conduct gap analysis
  4.  Identify environmental aspects
  5.  Identify significant aspects
  6.  Decide the environmental policy
  7.  Identify environmental management plans
  8.  Identify the training need
  9.  Establish communication system
  10. Create proper documentation
  11. Conduct EMS audits
  12.  Conduct management reviews
  13. Perform a final gap analysis
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_____________________________________________________________________________
गुड्डू रंगीला 
Knowledge Partner
Charcha Kendra

Performance Management


Performance management and appraisal are related subjects. An organisation cannot afford to hoard knowledge and performance parameters and efficiency. It has to share it across the sub domains to be competitive. Performance management is a continuous phenomenon whereas performance appraisal is time stamp evaluation of performance based on certain parameters within a period.

Performance management/appraisal has the following four common steps
  1. Definition of desired job performance
  2. Individual’s performance on the job vis a vis defined performance
  3. Feedback process and challenging goal setting
  4. Decision regarding rewarding, retaining, promoting, training, demoting or terminating based on evaluation



1.      Define Job Performance
  •   Coaching Appraisal instrument
  •   Technology supporting it
  •   Appropriate definition of performance
  • Relevant performance dimensions
  •  Performance standards or expectations
  • Weightage of situational constraints
  • Number of performance levels
  • Absolute or relative comparison standards


Campbell et al.’s theory posits a taxonomy of higher-order performance components, namely, (1) job-specific task proficiency, (2) non-job-specific task proficiency (i.e. organizational citizenship behaviour), (3) written and oral communication proficiency, (4) demonstration of effort, (5) maintenance of personal discipline, (6) facilitation of peer and team performance, (7) supervision/leadership, and (8) management/administration.

Performance Appraisal Instruments
·         BARS (Behaviourally anchored rating scales)
·         BOS ( Behavioural observation scales)

2.      Observe Performance

  • Reliability errors can occur like “Halo”, “First impression’, “Just like me” etc.
  • To tackle this the observer must be trained
  • Active participation, knowledge of results and practice is required
  • FOR (Frame of Reference ) method of training is also used for performance observation so that correct observation or impression is made on each performance dimension
  • Political and social context like age , gender, ethnicity etc. also affect the observation


3.      Feedback

  • Continuous feedback is necessary
  •  Feedback has to be clear and the basis of rating has to be communicated like absolute or relative
  •  Feedback and goal setting has to be individual as well as team and should consider that team effort and contribution also matters
  •  Training regarding goal setting is also required to set realistic and achievable goals relative to each context


4.      Make a decision
  •   “Hindsight bias” , “availability bias”, “confirmation bias” etc tend to limit the decision
  •   Decision should be taken by full consideration of facts
  • Decision of whether an employee needs to be terminated or demoted should be taken by considering first whether training can improve the performance and whether the performance rating itself was influenced by factors beyond his/her control 
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______________________________________________________________________________
गुड्डू रंगीला 
Knowledge Partner
Charcha Kendra

Employee Subsystem and the “HR” Architecture



Human resource is a strategic resource as supported by SHRM. HR subsystems should thus be aligned to strategy of the firm. There are literatures which have inherent tension between them on the structure of HR and its subsystems. Several systems like commitment oriented system, high performance work system etc. have been studied. As this prevails, there are also firms having externalised systems like independent contractors, temporary employees etc. There is a tension between internalisation and externalisation theories. Externalisation theories rely on the fact that not all people will add to strategic advantage and there are categories called A players, B players, C players etc. The situations where innovation is needed, human capital can be strategic resource but where the focus is on operational efficiencies and standard procedures, best practices, low cost then the externalisation and outsourcing will be beneficial. Firms generally retain the core activities and outsource the peripheral activities. Knowledge itself may not provide the competitive edge but flow of knowledge and management of knowledge stock can provide so.

HR Architecture

Employee subsystems are formed within firms by events that trigger HR practices to be followed like labour supply, technological change etc. Firms may focus on a central core employee group and have peripheral employee system to support operational efficiencies. Value is provided by employee skills that help to translate benefit to customer wrt. Cost. (Value= benefit/cost). Uniqueness is provided by skills that are guided by tacit knowledge specific to that firm’s environment.

Knowledge Employees:- Core group, high on value creation and uniqueness ,more incentive, ESOPs, engagement programs, innovative
Job Based Employees:- Peripheral group, job related incentive based on efficiency, low on uniqueness, prone to leaving, deliver high value so internalised
Contract Workers:- Paid per hour, interference is only compliance based, cost effective, low on uniqueness and value
Alliance Partners:- Like knowledge partners, don’t create much value but unique, long term relationship and engagement is preferred by firm for such 



Globalisation and HR Architecture

Globalisation has caused firms to look beyond the boundaries of country. Offshoring has become common to reduce cost. Countries where cheap labour is available, the firms offshore the peripheral activities or ancillary knowledge. But while offshoring the firms have to see the strategic advantage of offshoring rather than only cost. If the firms’ value to customer is being degraded then cost benefit may not be much useful (offshoring call centres by DELL to India, Philippines etc.). Labour rates are gradually increasing in these countries and hence first while entering the firm should look at cost and then after that improving efficiency in the offshore location. There are also external factors like social, legal and political (PESTEL) to be looked before such arrangement. In context of HR systems, firm can go for short term outsourcing or long term offshoring or alliance partnership with firms that have the skills to do the job at operational efficient costs. There are several controversies also in this field where many claim that offshoring is done only to manufacture goods and services to be brought back to domestic market for sale

Strategy and HR Architecture

Firms’ HR practices tend to fall in line with their strategy. Firms looking for innovation should have employees who share, take risks and collaborate to innovate. Commitment based or collaborative HRM may be common in these firms. Similarly firms focusing on low cost strategy, should have HR practices that focus on operational efficiency and incentives related to it. Compliance based or productivity based HR systems may be common in these firms.

Knowledge Flow and HR Architecture

Knowledge stock is considered to be one of the most important strategic resource which is rare, inimitable, valuable and non-substitutable. It is the knowledge embedded in the people which is tacit. Knowledge flow and management of knowledge in the firm gives the edge to the firm in long run. Social capital that is relationships and sharing between the employees also contribute a lot. These add to the strategic and unique resource pool. Human capital along with the Social capital is becoming increasingly important. While HR architecture gives a fair bit of idea of human capital distinction based on internalisation, externalisation and uniqueness and value creation, it does not provide a framework for knowledge flow or social capital. Two archetypes are proposed to define the relationship between the different employee groups. First is cooperative relational archetype which is based on frequent and dense social network and sharing and integration. Second is entrepreneurial archetype which is related to relatively weak ties based on trust between few groups. The primary HR activities that support an entrepreneurial archetype are flexible work structures, results-based incentives, and trans-specialist development.


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________________________________________________________________________________
गुड्डू रंगीला 
Knowledge Partner
Charcha Kendra

Strategic Management and HRM



Spurred on by increasing competition, fast-paced technological change, globalization, and other factors, businesses are seeking to understand how one of the last truly competitive resources, their human resources, can be managed for competitive advantage. This idea that the human resources of a firm can play a strategic role in the success of an organization has led to the formation of a field of research often referred to as strategic human resource management (SHRM).

Earlier view of strategy was defined by various works till Porter gave the five forces model for competitive strategy. Bulk of this work focussed on external factors that defined company’s profitability. With the advent of resource based view this changed. The resource-based view suggested that firms should look inward to their resources, both physical and intellectual, for sources of competitive advantage. VRIO framework was defined for strategic resources. RBV (Resource Based View) has also been criticised a few times but has significantly contributed to SHRM.

SHRM states that the firm’s HR should be aligned to its strategies also called vertical alignment. Alignment of HR sub functions with each other is termed as horizontal alignment. RBV has given importance to human resources as strategic resources for competitive advantage.

Testing of RBV with SHRM has been done with respect to HR practices affecting the motivation and human capital and in turn affecting the operational efficiency of the firm. Human capital in terms of knowledge and skills. Three important components of HRM which constitute a resource of the firm are; human capital stock, flow of human capital through the firm (movement of people as well as their knowledge) and the dynamic processes through which organizations change and/or renew themselves.

Firms HR practices and fit

The resource-based application to SHRM requires focusing on a fit between the skills and behaviours of employees that are best suited to the firm’s strategy. Any fit to firm strategy must first consider the kinds of employee behaviour (e.g. experimentation and discovery) required to successfully execute the strategy (e.g. focused on offering innovative products), and the kinds of skills necessary to exhibit those behaviours (e.g. scientific knowledge).

For instance, within Wal-Mart, those in charge of logistics have extremely valuable and unique skills, much more so than the average sales associate. On the other hand, at Nordstrom’s, because customer service is important, sales associate skills are more critical to the strategy than those of the logistics employees. One would expect that firms focused on low cost might not pay the same level of wages and benefits as firms focused on innovation or customer service.

Horizontal fits are those such as HR practices of recruitment and selection giving more focus on team playing capabilities.

Pitfalls of fit

Empirical evidence related to fit is concern and in the long term it is not sure that this positive effect will continue. A tight fit may not be useful in times of organisational change. Moreover large number of organisations operate in complex environment in which applying a fit of HR practices to the strategy may not be possible or easy. Sometimes there is a trade-off between a fit to environment and fit to strategy.



SHRM and sustainability

Unique historical condition and social complexity of resources make it non imitable and rare. HR systems are built and developed over time and hence difficult to replicate for most of the firms. Contribution to firm’s competitive advantage by HR system is sufficiently ambiguous and hence most firms will find it difficult to apply to their own. It is socially complex and variant and hence strategically sustainable for any firm over a period of time.

Key Unanswered questions

There is not much empirical test done on the application of SHRM and its efficacy on organisations competitive advantage as well as operational efficiency. Reduction of complexity while testing different HRM models is required by dissecting organisational studies into departmental studies. This will help in studying the fit effectively.

Expanding the role of HRM


SHRM has been traditionally related to implementation of strategy. A further extension of it can be to strategy formulation. Studying empirically how different aspects of HR systems and practices affect the firm’s performance and how these can be considered as dependent and moderating variables rather than just the independent variable to measure the firm’s advantage, is going to be the next phase of SHRM study. For instance, IBM’s strong HR processes/competencies led it into the business of offering outsourced HR services. This was an internal resource that was extended into a new product line, and illustrates how an understanding of such resources can influence strategic direction. Several other theories like “learning objectives”, “real option theory” etc. can be combined with SHRM in future studies to broaden the lens.

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____________________________________________________________________
गुड्डू रंगीला 
Knowledge Partner
Charcha Kendra

Remuneration: Pay effects at Work


There is debate in literature over the issue of how pay affects the performance of firm’s human resource. Some say pay affects motivation and hence has positive influence. Others have a different view. Pay level, pay form and pay structure define how remuneration is provided. Pay level refers to organisation’s pay position with respect to industry benchmark or other competitors. It can be leading, lagging or level. Pay form defines how pay is given and what part is fixed and what is incentive or performance based. Pay structure refers to whether it is hierarchical or flat.

Several theories like agency theory, reinforcement theory, goal-setting theory, expectancy theory etc. support the fact that incentive structure affects the employee performance positively. While Cognitive evaluation theory says that it can be harmful due to effect on intrinsic task motivation. Incentive or reward system is extrinsic motivation. But most literatures agree that there is no negative effect of reward on motivation. How much positive effect it has may vary. Gain sharing plans, or group incentives, ESOPs etc, have been found to enhance employee motivation, leaning and involvement and hence their performance. There is also “sorting” effect on performance. Sorting into different pay conditions is required to study the effect. Sometimes group incentive system may suffer from the “free rider effect” and “1/n effect” and performance may not increase as much as expected with incentive. But this again can be mitigated by monitoring and peer pressure so that performance of group does not go down because of some non-performers and hence those who are capable and high performing exert pressure on low performers to catch up so that they do not loose on incentives.

Effects of Pay structure

“Inequality, rather than want, is the cause of trouble.”

  • Pay structure has two aspects
  •  Pay dispersion
  •  Pay basis

Pay dispersion has again been studied in different contexts by many and has been said to have positive as well as negative effect on performance. This is sometimes related to tournament theory where players perform for the trophy. This is usual practice for the pay of top executives .The pay is usually greater than their marginal contribution. Pay dispersion among the same level can be due to experience, qualification etc.

Pay basis is defined in terms of whether the pay is job based or person based. Job based pay is usually related to job and evaluation of job. It is graded and hierarchical. Both internal and external evaluation of job and activities is done to price the job. While person based pay is on the performance and work of individual.


Pay level effect is generally not significant. It is widely accepted practice to reach at a market stabilised rate of payment or wages but it is not necessarily true that higher than market rate of wage may translate into higher performance due to employee retention.


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गुड्डू रंगीला 

Knowledge Partner,
Charcha Kendra