Focus on the journey, not the destination. Joy is found not in finishing an activity but in doing it. Greg Anderson
…And we continue our journey of “E-mag!ne”-ing. A journey that we had started months back and a journey that would be perpetual. In each of our journey we promise to bring you the best in every way possible, be it through the content, or the design or little surprises here and there. With such another pledge, we present to you the August issue of E-mag!ne with more interesting articles and more exciting content. This month sees E-mag!ne get a new look and feel to it, which is all yours to explore! Also the Quiz this month is CSR special, so that you can test your know-how about companies with a conscience. We are confident that your journey through yet another issue of “E-mag!ne” would be as magnificent as the previous ones. On that positive note … we wish you a happy voyage !! Keep Reading Warm Regards
# From the Faculty Desk………………………..…………..4 # From the Alumni Desk……………………..…………….6 # Friends from Yonder……………………………..……..10 # Change: need to introduce & how to introduce it……...13 # Strengthening the Diversity…………………….....….....1 5 # Q(Quotient………………………..........................................18 # Ace the Case………………………..……………..……..20 # Campus Bytes…………………………………....……....26 # Feedback………………………………………………..27
Effect of commodity prices on external balances and capital flows The world economy is mired in the worst financial crisis si nce the Great Depression. What first appeared as a sub(prime mortgage crack in the United States housing market d uri ng the summer of 2007 began widening duri ng 2008 into deeper fissured across the global financial landscape and ended with the collapse of major banking i nsti tution, precipitous falls on stock markets across the world and a credit freeze. These financial shockwaves have now triggered a full(fledged economic crisis with most advanced countries already in recession and the outlook for emerging and other developing economies deteriorating rapidly, includ ing economies with a recent history of strong economic performance. The crisis has already had a sever impact on global commodity markets with far reaching implications for the prospects of the developing worl d at large. Commodi ty prices have been highly volatile during 2008. Most process surged in the first half of 2008, continuing a trend that had began in 2003. Trends i n world market prices reversed sharply from mid(2008 however. Oil prices have plummeted by more than 60 percent from their peak levels from July to November. Deterioration in external balances has become a significant problem for many developing countries. Overall, in 2007, current accounts deficits exceeded 10 percent of GDP in about one thir d of developing countries, up from about o ne(quarter in 2006. Twelve countries ran deficits in excess of 20 percent of GDP in 2007. In past, these deficits reflect the impact of higher oil prices on oil(impor ting countr ies: oil
balances accounts for more than half of the country account deficit in one of every two developing countries. Excluding the massive rise in Chi na's sur plus, the current account deficit of oil(importing countries has increased significantly during the rise in prices, from close to zero in 2002(03 to about $130 bill ion i n 2007, as account equal to 2.2 percent of GDP. In contrast, the current account surplus of oil(exporti ng countries i mproved from 2 percent of GDP to more than 7 percent in 2005(06, thoug h it declined to below 5 percent in 2007. The rise in oi l prices has contributed to, but does no t fully explain, this dis parity i n current account balances. The rise in oil(importing countries deficits has been less than the i ncrease in their net oil balances, while the increase in oil(exporting countries surpl us has been well below the improvement in their oil balance. As should be expected, many countries have made compensating adjus tments i n trade and domestic absorption to accommodate the rose in oil prices. And there is little correlation between the size of countries' net oil balances and the size of current account balances. Several oil(exporting countries are runni ng sizable current account deficits (notably Kazakhstan and Sudan). Some countr ies (Botswana, Nepal, Paraguay, Switzerland, and Thailand) managed to r un account s urpl uses even though their deficits on the oil component of the trade balance exceeded 5 percent of GDP. The question is: how have these countr ies have been able to finance their large external imbalances? ( The financing of increased current account deficits has not come principally from hig her portfolio flows of reserve drawn downs, but from foreign direct i nvestment and aid. Much of the surge in pr ivate debt and equi ty flows into developing countries over the past few years has gone to countries wi th sizable current account surpluses. For example, private debt flows for the 11 countries with current account surpl uses in 2005(07 accounted for half of the total to all developing countries ( in 2007, Russia ran a current account surplus equals to 6 percent of its GDP and yet receives $125 billion in private debt flows). And to date few countries have had to draw down their ample foreign reserve holding. Instead, of the 13 countries with the largest cur rent account deficit ( and w here dare are available), in 8 countries foreign direct investment covered over all half of the current account deficit, and in 4 countries net official development assistance (ODA) disbursements exceeded 10 percent of GDP.
HRM……THE BOLLYWOOD WAY!! primarily ily a nd no t for the classes. Does this “Skeptics believe that Hindi movies are meant for the masses primar statement still ring true for corporate India?” There was a time when one would o nly approach the Human Resource Department for matters l ike recruitment and pay role issues and it was considered to be just a support function, because ‘it did not contribute to the botto m line’. However, with the boom in the economy and growth of the knowledge economy, HR has taken on a new avatar. As the focus moves from traditional brick and mortar organizations to more ‘people(oriented business’ like IT(ITES, Media, etc, HR has become significant in nature and magnitude of its role in a n organization. As the competitive advantage of organizatio ns has moved from machines and prod uction to the expertise and creativity of its people, HR has a large role to play in attracting, motivating and final ly, retaining these very people. In the process of attaining these objectives, Indian organizations are discovering the limi tations of us ing western models and are searching for Indian ideas. Movies have certainly helped make a good beginning in this exploratio n. Indian movies can certainly be a useful and effective medium to communicate relevant lessons in management and everyday living. India has over the centuries used various forms of Art includi ng literature, music and dance to spread messages for everyday living. The Ramayana, the Mahabharata, the Panchatantra, the Hitopadesa are a few standing examples. We are however unfamiliar with the idea of an Indian movie seeming to teach us lessons in Management! Even if many of them did, people have seldom looked at it that way.
Vishal K hanna, Head Management Development, Ceat Ltd says, “Corporate training has undergone a lot of changes over a considerable period of time. There was a time when training sessions included only presentatio ns and lectures b ut with the employee base evolving and getting more intellectual, they are looking for value addition. And w hen we say ‘see it to believe it’, it’s an apt tool to demons demons trate behavior. The impact of films is far more greater than talking.” If we delve deeper into the picture the following insights can be gauged: • •
Movies are easily accessible, unlike training films. They combine entertainment wi th learning.
• • •
Their linkage with everyday living makes the bridging easy. The underlying social messages are more spontaneously absorbed. The audio(visual impact enhances learning and makes retention easier.
Recent trends indicate that Trainers and Ma nagement Consul tants across the globe are using movies extensively for Management, Training and Leadership lessons.
Priya Kumar, CEO and Chief Facilitator, International Center for Training Systems says, “Training has to involve a lot of interaction from the participants, otherwise, they lose attention. People are five(( hour no njudg mental while watching a film and it has a better impact on them than sitting for a five lecture on the same issue.” In this article, we focus on TWO Indian movies that have left an indelible impression on Corpora te Training and Leadership. LAGAAN (2001) The protagonist in the movie i.e. Bhuvan's character is risk taking, responsible, confident, encouraging, supportive with a 'never say die' attitude which is an i ntri nsic character for any manager. It was the village ingenuity of Bhuvan that gave hi m the idea to challenge the Br itish in a cricket match and getting exempted from the tax “lagaan” levied on them. Otherwise the villagers couldn’t have paid the tax in aftermath of a drought. Such r isk taki ng and “thi nking out of the box” is required for every new venture or a commercial startup. The Management Lessons that Lagaan provides: Teamwork The learning: “Unity Unity is streng th” th The spirit and power of team work • Will power and determinatio n • Unity and focus on commo n goal • How people can achieve the impossible by coming together, irrespective of diversity. The relentless pursuit of Bhuvan coupled with some team spi rit and co(operation made the villagers form a cricket team, a cricket team that went on to beat an established, professional and well equipped Britis h team. Bhuvan upholded this by saying througho ut “ fear not, only believe”.
T – Together E – Each A – Achieves M – More Relentless spiri t to fight The learning: “Nothing Nothing is impossible ” • • • •
Don't give up till the end” Whatever you dream you can achieve To not miss oppo rtunities, one has to take risks Where there is a will there a way
The need for a “can do” spirit and a positive attitude
Bhuvan’s cricket match idea did no t go dow n well w ith the vil lager as they did n’t k now how to play it. But Bhuvan wi th the help of Elizabeth (an Englis h lady) led them secretly to a real cricket match of the Britis h team and later on emulated that in their own fields. The team learnt by imitating Bhuvan and managed to get hold of the game. This gives an important lesson “Accept the challenge, be open( minded”. It tells us even if you don't know something you can learn and achieve it. What is needed is perhaps the zeal and willingness to learn. T he Leader’s Role Bhuvan – “The Role Role Model” • •
Being able to spot talent: How Bhuvan found a spi nner in ‘Kachra’. Physically & emotionally mobilizing a team: His pep(talk when the team was losing the match.
• • •
Coaching the team: Giving individual attention and teaching the nuances of the game. Leading by example: Staying at the crease till the end and hi tti ng the winning r uns. Using the right balance of humor, encouragement and force: Instilled confidence in his team mates.
It is evident tha t Lagaan has the potential to help us learn and teach some very important lessons in Management & Leadership. What is significant is that ma ny of these lessons are not general or universal but are reflective of competencies that Indians need the most. CHAKDE! INDIA(2007) The movie is abo ut a coach (Kabir Khan) bringi ng together a set of i ndivid uals, who play good hockey, and transforming them into a team. There are 16 girls, representing the different states of the Indian union, w ho are slated to play for India at the Women's Hockey World Cup (Melbourne). It is a jour ney of a set of individuals who ul timately evolve into a world beater team.
While the movie brings out the ethos of teamwork, and how, a set of individuals, working towards a common goal, can achieve anything, as can be seen by India beating Australia, and picking the World Cup, there are a few things which also mus t be considered.
Developing a Common Passion •
The first step towards collective achievement is the formula tion of a commo n goal or purpose. Here, the coach Kabir Khan understood that the entire team needs to work as a single uni t. That even the most experienced player must sit out a few matches, if that is going to help the team win. In other words, get the team to put the team above the individ uals. This is, however, easier said than done.
((((( Jo nahin ho sakta hai, wahi to karna hai ((((( • This can be achieved only by developing a passionate resolve like the coach w ho i nstilled in the minds of the players tha t they had to put their best foot forward i n a bid to wi n the championshi p. However, this kind of passionate resolve is usually lacking in most organizations, and a lo t of leaders, while singi ng odes to teamwork, don’t invest too much of their emotional capital i nto developing passion. A Winning Strategy •
It is know n that i n a team, the best of the best come together to work towards a common
objective. Having said that, there is one lesson which one should consider – Indivi dual Brilliance needs to be recognized and brought out. A great leader is one who has an eye for talent and can harness the right talent for the right job j ust l ike the new posi tioning s trategy developed by Kabir Khan keeping their individ ual competencies in mind. Success does not mean the absence of failure. Learning from failures and maintaini ng a
positive body language are the prerequisites for success. This has been well depicted in the life of the coach himself who rose like a phoenix from the infamy of being named a traitor. ((((((Attitude not aptitude determi nes the altitude of man(((((( (((((( (((((( In organizations, today, the command and control aspect of management is fast losing its way, and is being replaced by a more "democratized" way of doing things. Gone are the days when the managers were supposed to know everything, and the others were supposed to just follow. This is something coach Kabir Khan ably demonstrates when he tells the team to just go and play…………..ChakDe!!
While Lagaan and ChakDe!India are just examples, there are many more movies (Munnabhai MBBS, Lage Raho Munnabhai, Black, Hazaaron Khwaishen Aisi to name a few) produced in the recent times and in the past which ho ld si milar learni ng po tential. India desperately needs role models and na tional examples for the young and ol d to emulate. Our o rganizations need to look for India n mo dels for ideas and tools to facilitate this learning. There are many available and we only need to look hard, unless of course we wait for the westerners (as has been the trend always) to point o ut the growing i mportance of Indian cinema as a learning aid for the corporate world.
A Study on Renewal Premium Payment Process A study was made of analyzing the trend of renewal premium payment at the Bancassurance channel at a renowned life insurance company at Kolkata where the sole objective was to find out the main rationales behind the delay of payment of renewal premi um and custo mer withdrawal of their policies. An attempt was made to study the consumer behavior and also the whole renewal premium payment process where we tried to determi ne if there was any correlation between the management system and the interruptio n of the payment process. The company has a mixture of model Leveraged life dis tribution & Leveraged Le veraged ba nk distribution. Under Leveraged life distribution model,, life Insurance Company takes the lead i n partnership, w hile several banks act as corporate agents to provide access to middle â€“ market leads and under leveraged bank distrib ution, i t is the bank that takes the lead as in the joint venture model, while the life insurance companies supply products for its bancassurance efforts. This model requires a large bank with a number of efficient distrib ution channels. For i nstance, branches, ATMâ€™s, mail, phones, etc.
The Renewal Premium Collection Process is what has been the major focus of this study.
In the above mentioned process most occurred faults are as follows:
Customers provide incorrect account No: & MICR Magnetic Ink C haracter Recognition code
Selling branch does not deduct the amount of money
Sometimes when the selling branch does not deduct the money, the centralized branch i.e. the clearing house already deducts it.
ECS system not activated by the branch
In the above mentioned cases proper steps should be taken in recording the correct account number, MICR code. The ECS list sho uld be sent to every branch where they should be instr ucted to correct the technical faults they are having and activate the whole process.
Cus tomers are unsure about payment mainly due to deprived market conditio n :
Sol: The customers should be explained the consequences if they don’t invest at that precise time because as the sensex was low NAV value was low too so as a result if they put in their money in the market, they would be able to purchase more NAV units due to lower NAV rate and hold it and wait till the market recovered which will give hig her return. For example, case of a particular customer has been taken whose investment patterns are furnished below:
LIQUIDATION AT A LOWER NAV = LOSS
LIQUIDATION AT A LOWER NAV = GAIN (IF INVETSED AT A REGULAR INTERVAL)
So if the market is judged by its past 10 to 20 years records it can be seen that market did recover from their loss making stage. So the present fall is a temporary one a nd the customer will be able to recover the notio nal loss i n the event the market bo unces back. As the customers invest the units are credited to their account, so best of chance of success to invest regular ly and s tay put i n the market ir respective of short term ups and downs.
To carry the above mentioned factors successfully knowledge of the needs of target customers, simple yet complete product offers, effective services, efficient management , complete assimilation of insurance with other bank prod ucts and services, extensive training , pertinent and pliable database systems are required . Apart from this efficient customer handling is required w hich will enhance the company image from its service quality management.
“Change: need to change and how to introduce it” It is said in a management world that only change is stable. Change is regarded as the most important thing in the modern world that leads Mr. Barack Hussein Obama from the Illinois to the white house of Washington DC to quote “Change Change we need”. need Everyone needs the change and at the same time we can contro l or resist to C hange. Do we ever ponder why? Why Mr. Obama didnot apply to many changes in the name of economic reforms. Why Robert Green in his book “48 laws of power” says that “P P reach for nce”? the Need of change, but never reform too much at o nce That is w hat happened i n New Delhi 4 years before and few days before in Kolkata. We all want to life in the poll ution free atmosphere but when High court issued o rders for banning the pol luti ng vehicles, we revolted to this change. Robert Green explained tha t the need for change is an Abstract but in day to day life we are creatures of habit. For us too much innovation can be traumatic, and that leads us to revolt. Obama did n’t apply too many changes in the name of economic reforms because he wants to make it feel like a gentle improvement on the past. Let us now check one by on the factors that restrict us to change: 1. Fear is the prime enemy to the change as it not o nly restricts us to cha nge but i t also approaches in many forms a)
Fear of loss: loss may be monetary or may be something tha t is valuable to us as loss of job, less time for family.
Fear of fail ure: ure as we are unaware of our capabilities so we are always in doubt w hether we can do this? Will we succeed? As the change may require new skills that we are scared to acquire.
Fear of uncertainty: as we cannot look into o ur future so we are uncomfortable with the change as change implies uncertainty which i n turn i mplies to uncomfortable situations to us.
False Beliefs: over a long period of time many false beliefs are manifested into our minds either by our parents or by friends and teachers. If you do anything which is no t conventio nal is always wrong that is why Galileo Galilei was sent to jail for the rest of his life because he had broken the false beliefs of other philosophers and clerics that the all the celestial objects moves around the Sun not around the earth.
Disagreement: we many time question on the need of change. We ask ourselves that whether we really need to change or not. In an organization associates may feel that the direction for the change is a wrong direction.
Comfort Zone: Human beings always want to live his or her life peacefully and comfortably. Many times we do try to accept a change but that change does no t remai n for a lo ng period of time because to retain the change we may have to do hard work w hich eventually destroys our comfort. So with the time we return to our s hell, called comfort zone.
Miscommunication: As all innovative decisions are taken by the top level management and hence the need for the change in an organization may be not properly communicated to the middle and lower level management a nd hence to the workers, w hich creates lack of trust and misunderstanding between the person i nitiati ng the change and the employees.
Momentum: Once the change is initiated in an orga nization the momentum is required to retain that change in future.
How to introduce change?
To intro duce a change in an organization you must first create the demand for change. The visions and the goals should be explained ( why is the change necessary ( not only for the survival of an organization but also for the survival of the people. When the time comes to introduce the change, all changes should not be bro ught in immediately; instead the changes should be introduced as the reform over the past. This will give ti me to digest the change by the employees as well as by the consumers. This is what can be visualized from the Vodafone advertisement. They first removed the pug dog from the advertisement after acquiring Hutch. But due to demand of the market they had to reintroduce the pug dog going to the Vodafone hut. Then they brought the Zoo Zoo when the consumer started accepting them. At the end reward the employee who implemented the change and let the who le organization know that who is being rewarded and why. This will not only create the need for change but also build the self esteem and satisfy the need of recognition of an employee.
Strengthening the Diversity.. "Diversity in compa nies is no longer about being melting po ts, but being salad bowls, We want people to company," ," This was said in a recent summi t by the Vice retain their identity yet be integrated into the company President HR of a global conglomerate.
It is an axiom that our world is rapidly changing. With change comes not only a different view of the world, but also changes in language to name that “new” world. Old words take on new meanings and new words enter the vocabulary, resulti ng in another way of “seeing. The needs of the 21st century demand a citizenry that is culturally sensitive and internationally focused, with an orientation toward the future rather than the past. Globally the demographic landscape is changing such that more and more the corporate work place will be influenced by People of Color.When I say color, I mean When hiring new employees organizations need to make sure that they hire people from diversified background. This really helps i n busi ness as different set of people bring strengths in d ifferent areas. For example: the diversified mutual funds have proven track record of giving consistent, better returns for a long period of time. This is mainly because it has stocks from vario us industr ies in vario us pro portions. When one sector is not doi ng well another will balance it, which eventually keeps the ROI i ntact for the investors. . All huma n organization have “differences,” since no two humans are alike. Diversity goes beyond this. By “diversity” is meant all the differences that people bring to an organization or group. Managing diversity is an on(going process that unleashes the various talents and capabilities which a diverse populatio n bri ng to a n organization, communi ty or society, so as to create a wholesome, inclusive environment, that is “safe for differences,” enables people to “reject rejection,” celebrates diversity, and maximizes the full potential of all, in a cultural context where everyone benefits. Multiculturalism, as the art of managing diversity, is an inclusive process where no one is left out. Diversity, in its essence, then is a “safeguard against idolatry”Rthe making of one group as the norm for all groups.
India is one of the most d iverse nations o n earth. No more than o ne(third of its people speak any given language, and the population is divided innumerable ways by caste, ethnicity, religion and numerous localisms. Managing diversity sho uld be a comprehensive, holistic process for Managing these differences that people bring s for the productive well being of all, especially the firm and its mission. A holistic model of managing diversity recognizes its two dimensions: the primary or Horizontal (mainly biological, usually visible: age, gender, race, ethnicity, sexual orientation, disabili ties), and the secondary or Vertical (psychosocio(spiritual, usually invisible: values system, worldviews, mindsets, ethics, paradigms, core intelligences). These differences have the potential of giving rise to conflicts, but if managed well can result in a synergetic unity, where the effect of all working together is greater than the sum to tal of all the parts working i ndependently. In India, the mai n diversity categories are gender, religion, place of birth (ethno(li nguis tic region) and, for Hindus, caste â€“ specifically, whether indivi duals belong to o ne of the tradi tionally domi nant "Forward Castes," one of the traditionally excluded "Scheduled Castes" or "Scheduled Tribes," or the large "Other Backward Castes" grouping. legal safeguards, redress mechanisms and monito ring processes in India are less developed; discrimination in recrui tment, selection and career advancement are less likely to be aggressively challenged. the approach toward correcting caste(based employment discrimination has been quantitatively fixed reservations (quotas) i n public sector jobs, state(financed colleges and legislatures. To apply generic "diversity management" and "global multicul tural team" pri nciples witho ut understandi ng the specifics of these differences could lead to unintended negative consequences The challenges to creating such a work environment are unfortunately many .Negative attitudes and behaviours ( prejudice, stereotyping and d iscrimina tion ( can be barriers to organisatio nal diversity because they can harm working relationships and damage morale and work prod uctivity. When a company is working globally, good diversity management requires understandi ng the social, cultural and legal particularities of each country, and navigating the differences while at the same ti me managing a corporatio n, division o r team i n a manner that is i nternally consistent across the globe. There is no do ubt that India has been a remarkably vibrant experiment in the management of diversity however a lot more needs to be done. Indiaâ€™s workforce is preponderantly young. Outlining some of the challenges for companies opting for an increasingly diverse and global workforce, Kalyanaraman said that as workers are increasingly relocating a nd migration is o n the rise, organisations need to devise retention strategies with "a passionate focus on individual, team and geo( wise expectation charts." He recommends that companies should conduct a deep study of issues such as worldwide compensation and aspiratio n benchmarks. "No two countries have the same retirement benefits," said Padmanabhan of TCS. Therefore, policies have to be diverse enough to accommodate all demographic and social fabrics, pointed out Kalyanaraman of HCL.
Throwing light on some of the challenges faced by Indians as they transi tion to becoming a global company, Padmanabhan said: "We have been dealing with and are used to working with foreigners as clients or busi ness associates, but certainly not as team members." He felt that our attitude towards non( Indians s hould change when we are peers. Also what is changing now is the attitude toward worki ng in India. "For no n(Ind ians, coming here is considered a prestigious assignment and a great value(add to their resumes.”That's why you see a lot of expats in the country to day and therefore we have a more diverse workforce There is an Arab proverb that says, “The dog barks but the caravan moves on.” The Caravan of change does not stop for anyone. But some are threatened by change and begin to woof, woof. Why? Because they see multiculturalism as having to g ive up power i n order to make room on the stage of life for new characters in the play. Yes, power will have to be shared. But in exchange the effective managing of diversity will empower managers and employees to develop what Troy Duster calls, “bicultural bicultural competence.” Managing diversity, If and when made a part of an on(going process in India will enable executives, managers, and the workforce to become world citizensRpersons who are able to transcend their own racial/ethnic, gender, cultural and socio(political reality and identify with humanki nd througho ut the world, at all levels of human need. They will thus be the transcending people who know no boundaries, and whose operating life(principle is compassion. This is the pri nciple that s hould be modelled in corporation at all levels in Ind ia, in the process of living diversity. The challenge is great but so is the reward.
Winner Q-Quotient July 2009!
Malini Sengupta, MHRM 2008-10 Answers to July Q-Quotient: 1. 2. 3. 4.
VLCC group Titan Marks and Spencer Nimbooz
5. The 3 Hard Variables are 'Strategy', 'Structure' and 'Systems' 6. rosogolla 7. Parle Agro 8. 'Duronto' trains 9. Whistleblower, blow their whistles 10. ABP Pvt. Ltd.
August 2009 Q-QUOTIENT
If you think you have the grey matter that matters, then mail us the answers to the following questions at email@example.com. The entry with the maximum number of correct entries will witness his/her name and picture in this space in the next edition of E(mag!ne. So its time to let the world know your Q (quotient Corporate Social Responsibility (CSR) agenda of a corporation is reflective of its social awareness and commitments to the community and society at large within which it operates. This month’s edition of the E-mag!ne tests you on your knowledge of companies with conscience.
Questions: 1. 2.
3. 4. 5. 6. 7.
Sold at Starbucks nationwide, which bottled water company donates 5 cents per bottle sold to help children around the world access clean water? Product Red, founded by U2 front man Bono and DATA’s Bobby Shriver is a brand licensed to well known companies such as Gap, Converse and Hallmark. A percentage of each company’s profits on Product Red merchandise benefits what cause? Which humani tarian orga nization provides Medical treatment to developing natio ns by sail ing around the world and docking near communities in need? PlayPumps Internatio nal ins talls water(pumps so that communities in Sub( Saharan Africa can access clean ground water. What piece of playground equipment are the pumps modelled after? Muhammad Yunus, founder of the Gra meen Bank, was awarded the 2006 Nobel Peace Prize for what poverty fighting i nnovation? What does Heifer International provide to communi ties througho ut the worl d that s truggle for reliable sources of food and income? Constructio n Skills Training Institute (CSTI) was established by this company at Manapakkam, Chennai to impart free of cost Construction Vocational T raining in formwork, carpentry, masonry, bar(bending, plumbi ng and sa nitary, scaffolder and electrical wireman trades to a wide spectrum of the rural poor. Which company is it? This company partnered the Indian farmer for close to a century. It has now engaged in elevating this par tnershi p to a new paradigm by leveraging information technology thro ugh its trailblazing 'e(Choupal' i nitia tive. Which Indian conglo merate is it? The Social Initiatives Gro up (SIG) of which Bank wo rks with a missio n to break the intergenerational cycle of poor health and nutrition, ensure essential early childhood education and schooling as well as access to basic financial services? Azim Premji Foundatio n spearheaded a pilot project that aims to understand and facilitate communi ty participation to significantly contribute towards Universal Quality Ed ucation. What is it known as?
"The employee at Taj is viewed as an asset and is the real profit center. He or she is the very reason for our survival. The creation of the Taj People Philosophy displays our commitment to and belief in our people. We want an organization with a very clear philosophy, where we can treasure people and build from within." ( Bernard Martyris, Senior Vice(President, HR, Indian Hotels Company Limited (IHCL).
Introduction In March 2001, the Taj Group1 launched an employee loyalty program called the S' pecial Thanks and Recognition System' (STARS). STARS was an initiative aimed at motivating employees to transcend their usual duties and responsibilities and have fun during work. This program also acknowledged and rewarded hard working employees who had done excellent work. The Taj Group had always believed that their employees were their greatest assets and the very reason for the survival of their business. In 2000, to show its commitment to and belief in employees, the Taj Group developed the 'Taj People Philosophy' (TPP), which covered all the people practices of the group. TPP considered every aspect of employees' organizational career planning, right from their ind uction into the company til l their superannuatio n. TPP offered many benefits to the Taj Group. It helped the company boost the morale of its employees and improve service standards, which in turn resul ted in repeat customers for many hotels in the group. The STAR system also led to global recognition of the Taj Group of hotels in 2002 when the group bagged the 'Hermes Award'2 for 'Best Innovation in Human Resources' in the global hospitali ty ind ustry. The Taj Groups Phi losophy and Star System The Taj Group of Hotels is run by IHCL, a part of the Tata Group. IHCL was founded by Jamsetji Nusserwanji Tata on April 1, 1902. T he hotels in the Taj Group fall i nto three categories â€“ hotels owned by IHCL and i ts subsidiaries; ho tels owned by associate companies; and ho tels with third party management contracts in which IHCL has no stake. 2] The 'Hermes Award' is decided by a 22(member jury, which includes representatives from top hospitality chai ns from all over the world. This is the only award given for huma n resources in the hospitality ind ustry and is also one of the most prestigious awards in the hospitality indus try. 120 applications were received for the award for the year 2002, among w hich five were short(listed for the final round. The Taj Group won the award for its innovative 'STAR' program.
The Taj People Philosophy Since its establishment, the Taj Gro up (Refer Exhibit I) had a people(oriented culture. The group always hired fresh graduates from leading hotel management institutes all over India so that it could shape their attitudes and develop their skil ls in a way that fitted its needs and culture. The management wanted the new recruits to pursue a long(term career with the group. All new employees were placed in an intensive two(year training program, which familiarized them w ith the b usiness ethos of the gro up, the management practices of the organization, and the working of cross(functional departments. The employees of the Taj Group were trained i n varied fields like sales and marketing, finance, hospitality and service, front office management, food and beverages, projects, HR and more. They also had to take part in vario us leadership prog rams, so that they could develop in them a strong, warm and professional work culture. Throug h these programs, the gro up was able to assess the future potential of the employees and the training required to further develop their ski lls. The gro up offered excellent opportuni ties to employees both on personal as well as organizational front3. In order to achieve 'Taj standards,' employees were made to undergo a rigorous trai ning program (Refer Exhibit II). The group strove hard to s tandardize all i ts processes and evolve a work culture, which appealed to all its employees universally. The group believed that talent management4 was of utmost i mporta nce to develop a sustainable competitive advantage. The group aimed at making the HR functio n a critical business partner, rather than just a support functio n. To further show its commitment to and belief in employees, the group created the 'Taj People Philosophy' (TPP) covering all people practices of the group. The concept of TPP, developed in 1999, was the brainchil d of Bernard Mar tyris (Martyris), Senior Vice( President, HR, IHCL, and his core team. The concept, originally planned to be called as 'The Womb to Tomb Approach,' covered all the aspects of an employee's career, from joining the group until his/her retirement. TPP was based on the key points of the Taj employee charter (Refer Table I). It was developed in line with the Tata Busi ness Excellence Model (TBEM)5. Explaining the rationale for implementi ng the philosophy, Martyris said, "It is to achieve that interna tional benchmarki ng in hospitali ty, and HR must fit i nto it."
KEY POINTS OF THE TAJ CHARTER Some of the key points of the Taj Charter are given below: • Every employee of the Taj Group would be an important member in the Taj family. • The Taj family would always strive to attract, retain and reward the best talent in the indus try. • The Taj family would commit itself to formal communication cha nnels, which woul d foster transparency. Source: www.tata.com
According to hi m, the three major areas of TPP included work systems and processes; learning and development; and employee welfare. As part of the TPP, the Taj Group introduced a stro ng performance management6 system, called the Balanced Scorecard System (BSS) that linked indivi dual performance with the group's overall strategy. BSS was based on a model developed by Kaplan and Nortan7, and focused on enhanci ng both indivi dual as well as enterprise performance. BSS measured the performance of employees across all hierarchical levels against a set of predefined targets and identified their variances. Martyris explained, "We are looking at a matrix form of organizatio n which cuts across hierarchy. It is impor tant to understand the potential of people." Therefore, BSS was implemented even at the lowest levels of the hierarchy. The BSS included an Employee Satisfaction Tracking System (ESTS), which solved employees' problems on a quarterly basis. As a part of ESTS, Taj carried out an organization wide employee satisfaction survey in mi d 2000 of about 9000 employees. According to this survey, the reported satisfaction level was about 75 percent. The group aimed to increase this level to 90(95 percent, and eventually to 100 percent. The group also took strong measures to weed out under(performers. The group adopted the 360(degree feedback system to evaluate the performance of all top officials, from the Managing Director to departmental ma nagers, in which they were evaluated by their immediate subordinates. The 360(degree feedback was followed by personal interviews of individuals to counsel them to overcome their deficiencies. The Taj Group also establis hed Centers of Excellence for its 14,000 employees at five locations in India includi ng Jaipur, Bangalore, Ernakulam, Chennai and Hyderabad. At these centers, departmental heads in each functional area were trained. These departmental heads later trained their ow n staff. The training included foundation modules and accreditation programs that familiarized the employees with Taj standards. Apart from adopting stri ngent measures to i mprove performance, Taj also recognized and rewarded its best employees across all levels of the organization. For this pur pose, Taj created a unique employee loyalty and reward program known as STARS. Describing the program, Martyris said, "It's an HR initiative aimed at creating an association 'between our star performers and our brand, the Taj.'"
The Star System The STAR system (STARS) was the brainchild of Martyris. T he system was developed in accordance with Taj's core philosophy that 'happy employees lead to happy customers.' STARS, operative throughout the year (from April to March), was open to all employees across the organization, at all hierarchical levels. It aimed to identify, recognize and reward those employees who excelled in their work. The Star System Contd...
STARS was actively promoted across the group's 62 chain of ho tels and among its 18,000 employees globally, out of which 15,000 were from India. STARS had five different levels. Though employees did not receive any cash awards, they gained recognition by the levels they attained thro ugh the poi nts they accumulated for their acts of kindness or hos pitality. 'Level 1' was k nown as the 'Silver Grade'. To reach this level, employees had to accumulate 120 poi nts i n three months. To attain 'Level 2', known as the 'Gold Grade,' employees had to accumulate 130 points within three months of attaining the silver grade. To reach 'Level 3', called the 'Platinum Grade', employees had to accumulate 250 poi nts wi thi n six months of attai ning the gold grade. To attain 'Level 4', employees had to accumulate 510 or more points, but below 760 points, to be a part of the Chief Operating Officer's club. 'Level 5' which was the highest level in STARS, enabled employees to be a part of the MD's club, if they accumulated 760 or more poi nts. Points were granted to employees on the basis of parameters like integrity, ho nesty, kindness, respect for customers, environmental awareness, teamwork, coordination, cooperation, excellence in work, new initiatives, trustworthiness, courage and conviction, among others. Suggestions by employees that benefited the organization fetched them significant points (Refer Exhibit III). Such suggestions in each hotel of the Taj Group were examined by the General Manager, HR Manager and training manager of the hotel the employee worked in. The suggestions could also be posted on the web, which were constantly monitored. Employees could also earn points through appreciation by customers, 'compliment(a(colleague' forums8 and various suggestion schemes. Employees could also get 'default points' if the review committee did not give feedback to the employee within two days of his/her offering a suggestion for the betterment of the organization. In such cases, the employee concerned was awarded '20 default points.' Hence, in an indirect manner, the system compelled judges of the review committee to give feedback to employees as early as possible. STARS helped employees work together as a team and appreciate fellow employees for their acts of kindness and excellence. It enha nced their motivatio n levels and led to i ncreased customer satisfaction. In one case, a bellboy in one of the group's hotel who received an American customer went out of his way to care for the customer. Noticing that the customer, who had arrived late at night, was suffering from cold, he offered to bring him a doctor. However, the customer refused the boy's offer. The bellboy then, on his own, offered a glass of warm water mixed with ginger and honey, a traditional Indian home remedy for cough and cold. The customer felt surprised and also happy at the bellboy's gesture. He left a note of appreciation for him, w hich added to his existing points. According to the number of points accumulated, employees would receive a star, which could be pinned on to their coat.
When a certain number of points were collected, employees received gift hampers, cash vouchers or a vacation in a Taj Hotel of their choice in Ind ia. The winners of STARS were felicitated at a function held in Taj, Mumbai. The winners' photographs were displayed on a big screen at the functio n and they received awards given by the MD of the Taj Group. T his awards ceremony significantly boos ted their morale. The STARS program had generated lot of attention amo ng the employees at the Taj Group. During the initial phase, not every hotel seemed to be serious about adopting STARS, but after the first awards ceremony was conducted, every hotel in the group repor tedly became very serious about the implementatio n of STARS. Reportedly, customer satisfaction levels increased significantly after the implementatio n of STARS. Commenti ng on the success of STARS, Martyris said, "After the campaign was launched, a large number of employees have started working together in the true spirit of teams and this helps us value our human capital. There are stars all around us b ut very often we look only at stars outside the system. Many employees do that extra bit and go that extra mile, out of the way to dazzle the customer satisfaction with employee recognition. Employee recognition is, hence, directly linked to customer satisfaction. It is recognition for the people, of the people and by the people." STARS was also used by the group as an appraisal system, in additio n to its regular appraisal system.
Th e Future Plans The STARS was not only successful as an HR initiative, but i t broug ht many strategic benefits to the group as well. The service standards at all hotels of the group improved significantly because the employees felt that their good work was being acknowledged and appreciated. This resulted in repeat customers for Taj hotels. Because of STARS, the Group won the 'Hermes Award 2002' for 'best innovatio n in HR' i n the hospitality i ndus try. Analysts felt that the fame and recognition associated with the winning of the Hermes award would place the Taj Group of hotels at the top of the list of the best hotels in the world.
The group also received requests for setting up hotels in Paris (France), where the 'Hermes award' function took place. The HR practices at the Taj Group attracted several Human Resources and Organizational Behavior experts' world over. In late 2001, Thomas J. Delong, a professor of Organizational Behavior from Harvard Business School (HBS), visited India and interviewed various employees in the Taj Group. After his visit, the Taj Group was "envisioned as an example of organizational tra nsformation w herein key dimensions of cultural change went into the maki ng of global managers."
Analysts also felt that social responsibili ty and people(centric programs were the core values at Taj Group, which were well demonstrated thro ugh the 'Taj People Philosophy.' Martyris said, "The challenges here lay in retaining the warmth and relationshi p focus of the Taj and inculcati ng a systems( driven approach to service." Analysts felt that the Taj Group had been highly successful because of its ability to provide better opportunities and give greater recognition to its employees, which motivated them to work to the best of their abilities. The Employee Retention Rate (ERR) of the Taj Group was the highest in the hos pitality ind ustry because of its employee(oriented initiatives. In spite of the hig hest ERR; Martyris felt that the retention of talent was Taj's major challenge9. He said, "Our staff is routinely poached by not just ind ustry competi tors but also banks, call centers and others. In 2002, i n the placements process at the hotel management insti tute run by the Taj, more than half of those passing out were hired by non(hospitality companies. While we are happy to see the growth and oppo rtunity for this sector, we also feel there is a need for introspection. Are we offering swift and smooth career paths to our employees? How am I to retain staffers from moving across industr ies?â€? In late 2002, the Taj Group, to demo nstrate its stro ng belief in employees, announced plans to make further investments i n trai ning, development, and career planning and employee welfare. The group also tried to standardize its various processes and develop a common work culture. After winning the Hermes Award in 2002, the group also planned to nomi nate the BSS for the Hermes Awards 2003.
Frolic and festivity reigned once again in the Department of MHRM as the junior batch (2009(2011) was given its freshers’ amidst much fanfare and anticipatio n. The juniors came all decked up in the “dress code” assigned to them, all smiling and in anticipation of the great occasion that lay ahead. The program began wi th a wonderful address given to the students by T he Director, The HOD and the faculty of the department. Then as the students were left to have their “interaction” session with their seniors, the real fun began with a plethora of games and tasks being given to the juniors in groups & individ ually. Everybody had a good laugh and a gala time at the end of it all as the tasks and games were specifically designed to help in Junior(senior ice breaking. After the interaction session, the students, faculty and staff members gathered together for lunch. Everybody ate to their hearts content a nd geared themselves up for the grand jam(session that lay ahead. After much anticipation and waiti ng for, the Jam(session finally began, and the juniors and seniors bo th let their hair down & tossed all their worr ies into thin air and danced like there is no tomorrow. All this celebratory commotion was a welcome break from all the hectic academic activity that surrounds the students of the department all time. Then again as the fresher’s party came to an end, it was back to work for the students. This month has been specially taxing o n the second year students as they had to buck up for the placement trips to the different zones. All the planning, coordinating, organizing for the trips was indeed a tiring job for the placement committee to handle, but they did so in a fairly effortless manner, having perfected their skills over the past year of working for placements. Student involvement i n all the tasks concerning the placement trips is very hig h and the students go about their duties i n this regard with a sense of duty and responsibil ity. It a matter of fact that the enti re MHRM department helps out in placement efforts. All managerial traits praiseworthy are to be found in the students as they work together in symposium. With the trips starti ng from the last week of August, the students going to the different zones have mentally prepared themselves for the enormous responsibil ity tha t is being sho uldered on them. They go with the task of representing their college and the Department. They go with the responsibility of bringing good news for their batch mates i n terms of good placement offers being given to them. T hey go with the ambi tion of making the presence of IISWBM(MHRM felt wherever they set foot.
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