Chapter 3: Is it strategic? – Human Capital Management Challenges in India

3

Is it strategic?

Abstract:

This chapter starts by emphasising why employees should not be treated like assets. It reveals the challenges in current thinking in the corporate and academia and calls for an altered perspective. The discussion then moves to discuss about work life balance issues specifically from an Indian context and the impact it has on talent pool. The discussion then moves on to the topic of employee engagement and its impact on talent pool. It reveals the three levels of engagement companies in India are looking at namely Intellectual, emotional and financial aspects provides there is a role and cultural fit. It then looks at how some companies have approached this concept and summarises the need to adopt a holistic perspective. The chapter on connected talent, discusses about the role of technology in human capital management and how companies have embraced technology to address their people challenges.

Key words

intangible assets

Human resource management

Employee engagement

Emotional engagement

financial engagement

Intellectual engagement

HR transformation

Work life balance

Indian work perceptions and culture

Strategies to balance work life

Engagement and value

Indian perception of engagement

Indian HR Technology

HR Social networks

Linked in

Trainers forum

Employees are not your assets

The adage ‘People are our assets’ has been a stock phrase for many company directors and annual reports. However, reality demonstrates that few business decisions are made with any real knowledge and understanding of the contribution of people (Scarborough, 2002).

At the macro level, there is an element of truth in this statement. However, it has been repeated so many times by so many leaders without any follow-up action. As a result, the validity of the message has become diluted and cynicism has increased. I could be criticised for playing with semantics. However, our basic thought processes are strongly influenced by the words we use and the language we speak. We just need to look at it more closely.

The classical definition of assets in business and accounting is the value of an item ‘owned’ by a person or company. In other words, assets ‘owned’ by individuals or organisations have an economic value, which could be converted to cash. An asset has to be owned and sold for a tangible value.

If we now look at the first statement, it is obvious that employees cannot be an asset to an organisation as they cannot be owned by organisations. Although some football and cricket players are valued as an asset and are traded by clubs, even then they do not fit into the classic meaning of assets. These players can walk out of an organisation if they want to. Other than that, in traditional organisations where people are hired for their skills, employees can never be treated like assets. Employees cannot be owned, and if you do not own them you cannot control them to do what you want. Knowledge and talent leakage is therefore inevitable. If organisations grasp this basic idea clearly, then their approach to their employees will change.

Customers spend money to buy a company’s products and companies spend money to buy an employee’s talent. Employees and organisations have a contractual relationship, and that is a fact. Organisations are investing in software, hardware and people-ware to manage a relationship with customers who spend top dollars with the company. Managers have to shift from an ownership to a partnership perspective.

Viewing employees as a resource has led to the resource-based view of the firm. The influence of human capital (HC) on firm performance has led to the development of a strategic perspective of HC. Although the importance of fitting an organisation’s personnel/human resource management (HRM) policies and practices to the company’s overall business strategy has been recognised since the dawn of the field (Kaufman, 2001b), this idea only gained widespread currency among academics and practitioners in the last two decades (Wright et al., 1992). Stewart (1997) argues that one of the powerful advantages of information is its ability to wipe out the need for inventory. Hence, knowledge-intensive organisations often have less tangible assets but more intangible assets.

Unlike a traditional business that is a collection of physical assets, the information age is giving rise to companies rich in intellectual or knowledge assets that require entirely different skills from its employees (Stewart, 1997). One of information’s overwhelming advantages is its ability to wipe out inventory. Hence, knowledge-intensive organisations have less material compared to intangible assets and the difference between the book value of companies and their market value has been widening. It could be said that the value generated by these companies is not dependent on the physical assets the organisation owns. It depends on the intangible assets that are generating the potential of its employees. The perception that much of the value created by firms is becoming more dependent on assets other than physical capital has paved the way for a wide and diverse development of literature in intellectual capital (IC) and intangible assets (Scarborough, 2002).

Employees are the face of the organisation, and they create products and experience. They form the vital link between organisation profitability and customer satisfaction. There are two main reasons why organisations have to invest in their employees. There is a direct cost and an indirect cost. In today’s knowledge economy, talent is in short supply. Training costs for 2006–7 in the info-tech industry in India alone come close to US$2 billion. Now, extrapolating the costs globally, we can see that the entire cost and consequences associated with an employee who leaves the company can be quite high. On the average, a company loses six months’ worth of man-days for every vacancy filled. This can have a direct impact on the company’s bottom line (profits).

The workforce analysis of 90,000 workers worldwide, conducted by Towers Perrin, found that only 23 per cent of workers currently feel engaged at work. This study found that firms with the highest percentage of engaged employees collectively increased operating income by 19 per cent and earnings per share by 28 per cent year-on-year. In contrast, the companies with the lowest percentage of engagement showed declines of 33 per cent in operating income and 11 per cent in earnings per share. The indirect effect of disengaged employees can and has been proved to ruin a company’s profits. Either way, it clearly points to the fact that companies have to invest in employees to increase their profits.

Human capital is viewed as something employees bring to the organisation, but which is also developed through training and experience within the organisation. Unlike other forms of capital that can be traded in the market place, it follows that human capital is to a large extent non-standardised, dynamic, context dependent, and embodies people. An important reflection of this observation that much of the value created by firms is becoming more dependent on assets other than physical capital has been the development of a wide and diverse development of literature about intangible assets and intellectual capital (Scarborough, 2002).

This requires a fundamental shift in how an organisation views its employees; not as assets, but as partners who can help the organisation grow. HR departments should be taking the lead in carrying this strategic thought process into the organisation. However, not many in HR are driving this change. A recent study by Mercer reveals that more than 60 per cent of HR departments are going through some form of transformation programme. Managers of these firms believe that they are either ill-equipped or lack the experience to run their business through strategic initiative.

Sadly, HR departments are seen as a necessary evil. HR managers are more process-oriented and require a rounded business experience and are not seen as strategic contributors. Like some academics, most HR managers are perceived to be sitting in their ivory towers and liaising with senior managers only. They are not visible and are rarely in touch with reality. In this connected economy, the boundaries distinguishing a customer, be it internal or external, are getting increasingly blurred. Only companies that manage effective relationships with employees and customers will emerge victorious. If organisations embrace this reality, their perspective will transform the way strategies are formulated to increase retention. It will enable organisations to view the new relationship through a different lens.

Work–life balance

Although India is a land of a billion people, spotting talent is as hard as in any other country. The role universities play and the way people have been educated impact on employability. However, there are a few more challenges that organisations need to overcome to retain existing talent.

Indians are generally considered to be hardworking and dedicated. While there is a cap on the number of working hours, a typical Indian works at least 50–55 hours per week. The Indian work ethic believes in a honest day’s work. It is not that people are incapable of working smartly. There are many smart workers who manage their tasks and time efficiently, but they also tend to put in long hours. In that context, it is necessary to understand the concept of work–life balance and the challenge it presents in human capital management in an Asian and specifically Indian context.

Work–life balance discussions always assume that this concept relates to women. Not surprisingly, more than 50 per cent of the academic literature refers to work–life balance from a working woman’s point of view. Most of the work in this area has a Western perspective rather than an Eastern or Asian perspective. Roles that were analysed mainly referred to nursing, support functions, teaching and so on.

In India these days, it is exceedingly rare to find a housewife or a househusband. When families have both husband and wife working, work–life balance discussions from a woman’s perspective are not applicable. As couples share the burden of running a household, any discussion on work–life balance has to transcend gender-specific information to be meaningful.

Work–life balance literature also emphasises balance from a care perspective. For example, it refers to caring for children or flexible working hours to manage family commitments and so on. Unlike in the West, a lot of Indians are still part of a joint family set-up. In a joint family, parents of working couples will always offer to take care of grandchildren. So the concept of day care, etc., is uncommon. Invariably when the parents grow older and need to be looked after, working couples have to manage their work accordingly.

In this context, applying the work–life balance policies of the West does not add any value to the Indian context. If corporations are seriously considering introducing work–life balance initiatives, they have to move from the classic literature or management speak and devise policies that reflect reality.

Traditionally, many Indians used to see work as a means to an end. However, changing work patterns and the demands of urban living have altered that perspective. Many people have started working long hours and six days a week. As a result, some employees prefer to see no difference between their work and personal lives and regard work as an extension of their personality. The trend was evident among the Generation X population. Some preferred to have a clear distinction between work and personal life and would not allow one to affect the other. Many managers said that they could not say if the value generated is impacted if their work–life balance is affected.

HR managers interviewed mentioned that their efforts to alter their work–life balance to accommodate more work are taken for granted and not measured. They are convinced that what employees do at work would have a direct impact on what they do outside and the converse is also true. A tense, emotionally draining and/or traumatic event in the employee’s private life will have an impact on his or her ability to perform to the best of their ability.

Participants mentioned that if employees view their organisation positively and see the organisation involved in activities which complement their values, as individuals they would be more comfortable working and adding more value. Some managers opined that the boundaries between work and personal life tend to disappear, and they stop seeing any difference between the two as individuals grow in the organisation.

Work–life balance is influenced by individuals’ desire for success and wealth and what they want to achieve outside the workplace. Some managers treat their work as a hobby and are willing to spend extra hours at work. Some respondents mentioned that employees, especially at the senior management level, are this way inclined, and that they do not mind compromising on work–life balance. Senior managers tend to identify more with the organisation and think about work even away from it. The relationship between work and personal life has blurred, and they rarely see it as separate, but rather as part of their lives.

Respondents also note that at middle management level, some employees do not want to advance in their careers but continue to contribute to their role. They view employment and personal life as two different things and want to maintain a balance between the two. Some participants mentioned that employees’ financial position influences their work–life balance and vice versa. Family, finance and work are seen as three elements influencing the individual’s contribution.

Many Indian companies have a culture of working late at night. Potentially this has an impact on the value individuals add if they do not subscribe to it. From a cultural perspective, many managers believe that it is acceptable for employees in junior position to come, do the job and leave, but at the senior level they believe that this is not sufficient. This philosophy is slowly changing in progressive organisations but it continues to be part of many others.

Commenting on the 9 to 5 culture, most HR managers interviewed mentioned that many employees have that mindset. They say they do not have a problem with this approach as the majority of these employees give 100 per cent and are focused when they are working. It was not surprising to note that the vast majority of these employees belonged to Generation Y. What these employees do after work makes them happy and makes if possible them to come back and work hard. Therefore, they conclude that a balance between work and personal life is critical, as what happens in one’s private life impacts heavily on day-to-day work.

HR managers who were interviewed mentioned that if an employee is comfortable that his family is safe and secure they will certainly help add more value to the organisation. They recognise that employees embrace different principles, and realise that they are dealing with individuals with different motivations, values and priorities. They believe that these differences make them adopt a different approach to work and as a result, contribute at different levels. Senior managers felt that individuals’ work–life balance decisions affect their engagement levels.

Some managers encourage employees to take skills learned in their personal lives to their work environment to add more value to what they do. Some organisations are providing opportunities to their employees to do things for society through their work. They feel this would encourage their employees to achieve a balance outside work and that would increase the sense of goodwill towards the organisation. Many HR managers believe that employees are capable of doing better in their personal life and that the organisation has to find a way to help them do this internally or through the organisation, thereby increasing employee engagement. However, some managers were sceptical about this approach. They believed that employees would prefer to associate with a particular society or group. Organisations would not necessarily align with the same society, and that could fuel resentment.

Since the onset of the financial turmoil, any attempt to restore work–life balance amongst the Indian population has taken a back seat. Although the country has not experienced the full impact of the financial meltdown as it affected the West, employers are cautiously treading the ground. They are not investing in training or any other human capital development initiatives. Organisations that were supporting and completing projects for multinational firms have started feeling the pinch. In the information technology section, the ‘Satyam’ scandal has created fears that more than 50,000 software professionals may be out of work. If that were to happen, there would be an excess of unemployed talented people.

In this classic demand–supply scenario, companies still have the luxury of picking and choosing the best for a nominal investment. This has fuelled a sense of unease among people working in info-tech firms, and that has curtailed attrition. Companies are slowly beginning to realise that their employees would rather stay with them than look out for a new role.

That realisation has led to a reduction in the work–life balance initiatives. Employees in general are realising that India could also feel the impact of the financial crisis and it could result in job cuts. Employees are, therefore, burying their heads deep and working harder than ever. Unlike in the West, where companies are introducing four-day work weeks, India is experiencing an average increase in the number of working hours. In a country of a billion people, getting the right person at a marginal investment is a reality. Companies are also realising that there is no urgency to fill a position, and they are, as a result, able to choose the most suitable people.

In all the principal cities travel time has increased by at least 100 per cent, thereby also increasing the time an employee is away from home. In some cases, employees continue to work an extra hour or two to avoid getting stuck in traffic. This has a significant impact on their work–life balance. As a result, employees are slowly resorting to telecommuting. HR managers commented that, in the past, many employers used to think that employees could not work efficiently from home. This perception was also influenced by trust, or the lack of it, by the management. As companies are now driving to reduce costs and employers recognise the value in telecommuting, many IT firms have started allowing employees above a certain level of hierarchy to work from home. Officials believe that it is only a matter of time before the trend spills over to all the other sectors.

Many pharmaceutical companies have realised that their workforce works odd hours and have to rely on Internet cafes to submit their reports. They realised that this has an impact on the employees’ work–life balance. Many companies have, as a result, started supplying laptops to their workforce. They believe that such an arrangement would allow their employees to go home early.

Companies in India are motivating women to take up challenging roles and at the same time they are ensuring that female executives have an appropriate work–life balance. Companies like Eli Lilly, Crisil and ICICI have many senior women executives. Some executives have in fact taken maternity breaks and resumed their responsibilities after a year or two, and have seen their careers progress despite these interruptions. A recent study conducted by Accenture in India reveals that more than 61 per cent of women seem to believe they are more secure in their jobs and have better career prospects despite the current economic downturn. Compared to this, only 56 per cent of men seem to think so. Similarly, almost seven in ten women in India believe they are successful in their careers, notwithstanding the fact that almost an equal number of them think they are insufficiently challenged or stretched in the workplace with being given greater responsibility, a global survey by consulting firm Accenture has shown. The findings reveal that only 65 per cent are willing to stretch beyond their comfort zone as compared to 75 per cent of men. However, only 50 per cent of women as opposed to 55 per cent of men are ready to sacrifice work–life balance in order to advance in employment. This has resulted in an increase in the attrition rate in companies that have a diverse workforce. However, these companies see that as an opportunity.

Engagement

Globally, on average, a third of employees are not motivated by their work. It is, therefore, not surprising to note that employee engagement has come under the corporate spotlight. Motivated employees are in general more satisfied, effective and serve as the company’s brand ambassadors. While an engaged employee can impart enthusiasm, poorly engaged employees can create or fuel negative behaviour.

In his pioneering work, Herzberg (1968) made a distinction between being motivated to do something and being forced to do it. Rewards and punishment undermine a fundamental interest in doing something. There are many theories about motivation, based on needs, goal-setting, expectancies and fairness or equity, but they have common features. For example, motivation is personal and cannot be imposed. Motivated individuals will persevere longer with tasks, and they are more likely to achieve goals, other things being equal (such as competence). The challenge in today’s work environment is that work may be becoming less of a motivator for many people, and an increasingly diverse workforce has increased the need for conditions to motivate employees.

Reflecting on research into the service profit chain and the recognition that there is a changing and more diverse psychological factor at work, in the last few years attention has been paid to the notion of ‘employee engagement’. Indeed, this was one of the constructs used by the interviewees in this research. This observation has moved away from a general concern with employee morale towards the need to deliver improved business performance (Sappal, 2004). A number of research initiatives by professional organisations, such as the CIPD (Johnson, 2004), Gallup, and the Institute of Employment Studies (Robinson, Perryman and Hayday, 2004) have demonstrated correlations (not necessarily implying causal relationships) between levels of staff engagement and bottom-line business benefits. These benefits have led to reduced staff turnover; reductions in recruitment costs; avoidance of work and service disruption, and displays of more discretionary effort or ‘citizenship’ attitudes. Johnson (2004) argues that:

It not only leads to massive reductions in recruitment costs and work disruption – highly engaged employees also put in more discretionary effort … Two-thirds of highly engaged employees have plans to continue with their employer, compared to one-third of the moderately engaged and only a tenth of the disengaged.

What does the literature mean by the term ‘engagement’? The engaged (motivated) employee is interested in improving business performance, but it is the organisation’s responsibility to cultivate this positive attitude. The notion of employee engagement is, however, still confusing. It implies that desire and willingness to participate are essential components of motivation. It can be categorised as a multi-dimensional construct, including compliant/ non-compliant behaviours (i.e. willingness) and initiative-taking behaviours (i.e. desire). Similarly, engagement consists of different elements, including physical, cognitive and emotional components.

Robinson et al. (2004) define engagement as

a positive attitude held by the employee towards the organisation and its values. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organisation. The organisation must work to develop and stimulate engagement, which requires a two-way relationship between the employer and employee.

They point out that the verb ‘to engage’ has a variety of meanings ranging from a simple transaction (to hire someone to do a job) through to levels of enthusiasm (to fascinate and to charm). This suggests that there are increasing levels of engagement, from the basic transaction to stimulation (motivation). For Robinson et al. (2004) engaged employees have a strong bond of loyalty to their organisation. They support its strategy and its ways of doing business (the cognitive dimension); they are proud to work for it (the affective dimension); and they are motivated to work hard to help it succeed (the behavioural dimension).

Almost everyone who uses the concept of engagement defines it in some way as a heightened personal connection with the organisation. The benefits of engagement are considered to derive from: strongly held beliefs in the organisation; the desire to work to make things better; an understanding of the business context and the ‘bigger picture’; behaviours that are respectful of, and helpful to, colleagues; keeping up to date with developments in the field; and a willingness to ‘go the extra mile’. Engaged employees are expected to exploit their natural talents. They have the capability to enhance the organisation’s sustained competitive edge. Engagement builds value for the organisation by creating emotionally driven connections between employees and customers and a competitive advantage that differentiates the organisation, as it cannot be copied. There are two different views of how employee engagement is achieved (Maitland, 2004):

 The ‘bottom-up’ philosophy contends that levels of engagement are primarily caused by an employee’s experiences in his or her job. Engagement is seen primarily as the result of factors controlled by first-level supervisors and lower levels of management.

 The ‘top-down’ philosophy contends that engagement is achieved by the behaviour of organisations’ top-level leaders.

Academic research clearly confirms the relationship between employee engagement and productivity. A lot of investment, therefore, goes into developing strategies to measure and monitor employee engagement. There are different organisations that provide tools to assess engagement. Managers use these tools to map their employees on the spectrum of engagement.

Traditional metric systems measure employee engagement from an organisational perspective. They focus on the culture, support and other factors that can lessen or destroy employee engagement levels. There is nothing wrong in having a set of expectations from an organisational perspective, but it is equally beneficial to consider this question from an employee perspective. By creating measures focusing on these issues, companies seek to know where their employees stand. Measures that track an individual and an organisation’s engagement style are more strategic and would produce better results. Companies who fail to include this aspect would end up with measures that are not effective in revealing true engagement levels.

Many companies in India look at employee engagement at three levels, provided there is a role and cultural fit. They believe that individual context and organisation context influence employee engagement levels. The three forms of engagement combine the emotional, intellectual and financial aspects. Although they do not include measures to assess each of these, there is a common belief that engagement can be achieved along these routes. Some organisations such as Ranbaxy Fine Chemicals Limited (RFCL) measure engagement using the Gallup survey. They then obtain additional information about employees and combine that with the Gallup information to design effective engagement strategies. They are able to articulate the relevance of employee engagement and how it helps employees add value. A manager in RFCL commented that there has to be a combination of people who are intellectually engaged and subsequently emotionally engaged with the organisation. They need to believe that their job is worth doing. Some organisations have gone a step further, and they have come up with measures to assess these forms of engagement.

In fact, an employee decides on the type and level of engagement they need to have with the organisation. Some organisations are aware of this, and they believe individual beliefs and culture rather than engagement influence the value employees add. A manager from ITC said, ‘If they can align their own internal beliefs and values with the organisation, then they are going to spend less time worrying about being engaged with the organisation’. These organisations believe that if people are not committed then they could take up any activity and remain unmotivated about activities and the organisation. As a result, they would not add any value. They also believe that when there is a value conflict (values an employee believes in as opposed to the organisation’s values) employees will disengage with the organisation.

Organisations that believe in intellectual engagement believe that employees can be motivated, engaged and achieve better results by helping them understand the value they add and by providing role clarity. These organisations believe that people-oriented leadership increases employee engagement more than task-oriented management. They see leader behaviour as the foundation to engage or disengage employees. Leaders of these organisations believe in employee engagement initiatives and use them to get rid of command and control systems. Demonstrating behavioural stability has motivated their employees, and creating such a positive atmosphere continues to influence these organisations’ future strategies and activities. Leaders opined that employees have to achieve a balance between engagement and the amount of enthusiasm required to be committed to organisational objectives. They mentioned that engaged people tend to go the extra mile and take more responsibility, thereby reinforcing the culture.

Intellectually engaged employees demonstrate interest in learning new skills to move on to better roles. There is a possibility that intellectually restless or engaged citizens can come across as trouble makers in the organisation. These individuals have the ability to lead and guide the organisation forward. Managers should be trained to recognise the potential of such persons and encourage them to participate more actively. Allowing such employees to thrive is down to the leaders and in many cases their mindsets. Intellectual engagement has been the primary driving force behind commitment at senior management levels. However, they also believed that emotional engagement is required to boost morale.

Emotionally engaged people live the values of the organisation. It goes deeper than just taking money. People with more experience tend to be emotionally engaged, especially at the junior levels. In this day and age, there are no jobs for life. When there is no job security, getting people emotionally engaged is a significant challenge. Organisations that focus on emotional engagement believe that it is possible to determine engagement in a mechanical sense, but more difficult to put it into tangible numbers. These organisations use organisational commitment as a dipstick to measure employee engagement.

Although emotional commitment is crucial, it has to be balanced with intellectual and financial commitment, failing which would result in value erosion. Identity enhances emotional engagement whilst process and structure provide intellectual engagement.

Managers have the power to stimulate engagement. It is about creating value by improving the abilities and skills of employees, and then using it to get the best out of them. Managers have to recognise problems pertaining to life outside work affecting their employees and should take steps to help them solve them. If this is managed appropriately, it will increase employee engagement levels. Recognising initiative and rewarding it, and personal development plans for their employees, improve engagement. Such organisations measure not only what has been achieved, but how it has been achieved to obtain an unbiased measure. Engagement increases if employees are able to see the big picture, the impact of their actions and the value they add through their role. Effective communication helps people understand the positive side of an organisation. By understanding how they could contribute to the betterment of the organisation, through their role or outside of their role, employees are motivated to add value in the longer term. However, not many organisations in India have invested the time to explain the value employees could add at the junior or even middle management levels.

In India, companies that have just started the engagement initiatives are treading cautiously as they are not sure of the outcome. They tend to adopt a DIY approach. As a result, their journey of self-discovery is painfully slow. Even in the case of organisations that have gone further down the road, some focus on intellectual engagement, while others focus on emotional engagement. Organisations that have managed to balance both the emotional and the intellectual aspects have an engaged workforce that is more effective. Organisation culture and style of leadership have a tremendous influence on the forms of engagement. Leaders’ low individual engagement levels affect team and individual performance. An individual’s or a team’s attitude affects global engagement. An organisation has to have a mix of people with different levels of engagement. Employees have different motivations, value sets and priorities that result in them adopting different approaches to work and as a result, add different levels of value.

An employee decides, or has already decided, the role they would do, the value they would add to their role and the balance they would have with their career and personal life even before they walk through the organisation’s door. If that decision has already been taken by the employee, then whatever an organisation does or enforces would not increase employee engagement. The challenge in today’s work environment is that work may be becoming less of a motivator for many people, and an increasingly diverse workforce has expanded the scope of conditions needed to motivate employees. Sustaining employee commitment and keeping them engaged is easier in the short-term and more complex over the long-term.

The notion of employee engagement, therefore, is still diffuse. It includes the notion that desire and/or willingness to participate are vital components of engagement behaviour. It can be categorised as a multidimensional construct, including compliant/non-compliant behaviours (i.e. willingness) and initiative-taking behaviours (i.e. desire). Similarly, engagement consists of different elements, including physical, cognitive and emotional components. Data collected indicated that employees are engaged on three levels: intellectual, emotional and financial. It has also shown that everyone has a distinctive mix of these three forms of engagement which is driven by their own value systems, which shapes their behaviour and, as a result, influences their engagement levels with the organisation.

Organisations that encourage practices to favour financial engagement alone, fuel a task-oriented, ego-centric culture. These organisations engage in activities that undermine an organisation’s value over the long term. Intellectual engagement with no respect for colleagues does not add but erodes value. If emotional engagement is overdone, it creates a comfortable atmosphere that stifles innovation and learning. If organisations understand the forms of engagement of their workforce, their strategic initiatives could be more focused and deliver better results. For example, an employee with high intellectual engagement would prefer a challenging role. It would be the organisation’s duty to stimulate that employee intellectually.

Engagement encourages employees to want to do things, rather than be told to do things. Different employees have different engagement levels, even if they are in similar roles. Engaged people can tend to become workaholics as they consider work to be a hobby and enjoy it. A happy employee is automatically engaged and productive.

Organisations that treat employees like customers experience increased employee engagement. Listening to and implementing employee suggestions help to increase employee enthusiasm and they could act as brand ambassadors for the organisation.

The connected talent

Although this chapter refers to technology and its impact on HR, it does not discuss current practices. For example, there are many books that explore the importance of technology from an operational perspective. There are others that describe its impact on institutionalising knowledge. This chapter looks at the application of technology from a transformational, rather than transactional, point of view.

Technology convergence has resulted in new forms of engagement. Fifteen years ago it would have seemed impossible to use a mobile phone to surf the Internet and today that is taken as given. This has also contributed to the way organisations conduct business. In the HR domain, it was commonly used to obtain employee information, process payrolls, etc. For some strange reason, it was considered impersonal to use technology in a people function. However, organisations were quick to realise the benefits of technology and have embraced it fully. As a result, organisations have started using technology to improve the effectiveness of the screening, recruitment and talent management system.

The Internet generation has grown up with technology and are extremely comfortable using it. They prefer to network online than network in the real world. Word-of-mouth communication has taken a new form in this era of social networking. Technology allows people to establish communication channels. As a result, they cannot only see what is communicated but how the message is received and transmitted. Understanding who occupies a central position in the network and the profile of people who respond to this individual’s communication present a world of opportunity for organisations.

Naturally, organisations have started tapping into these social networks to attract people’s attention. Companies that sell a product or service use these networks as direct marketing platforms. However, remarkably few organisations have started hunting for talent using these networks. They make the mistake of targeting individuals, rather than leveraging the power of word-of-mouth. The potential of social networks’ word-of-mouth communication is so enormous and fast that an effective communication can reach millions of people within a few days. Although organisations understand the power of social networks, they are not sure of the strategy they need to pursue to get their message across.

Networks like Facebook and MySpace are used for social networking, whereas LinkedIn and Xing are used for professional networking. There seems to be a clear distinction between professional and social networking. More and more people are using sites like LinkedIn to advertise for a function and use it as an initial screening process. These sites group people based on location, profession, sector they operate in, etc. Recruitment consultants use these features to identify people, connect with them and add them to their database. Should a need arise, they have a ready-made pool of talent that they could tap into.

These networks provide an opportunity to form groups in the network space. There are hundreds of such groups focusing on training, knowledge management, discussing general HR issues, seeking advice about HR issues and so on. This is an excellent platform for HR personnel to acquire knowledge and tap into the expertise of people across the globe. ‘HR LinkedIn India’ is a group that has close to 40,000 members who are in different stages of their career. This group primarily acts as a platform for information exchange. ‘Trainers’ forum’ is an online group run by a group of individuals who work as senior directors for some major organisations in India and are responsible for training and development functions. This forum focuses on mentoring, coaching and training. Some training programmes, however, even this forum, are used mainly as an information exchange portal at the moment.

It is abundantly clear that, to market in the social networking space, an organisation needs to be diplomatic. The message has to be communicated subtly, and the strategy should rely on word-of-mouth communication. Studies have shown that people tend to share jokes and intriguing facts with many people simultaneously. A humorous video gets more exposure as it is transmitted instantly across the network. If HR personnel need to tap into the talent pool, they could use entertaining videos to advertise jobs subtly to reach a wider audience.

While technology is replacing the human element in every activity, it is enabling people to move to the concept of self-service. HR personnel can, therefore, use technology to automate mundane processes so that they can invest their time, thinking and activities more strategically. For example, they could conduct video interviews instead of using the telephone to screen candidates. A leading computer manufacturing firm in Chennai (Madras) uses technology to screen and evaluate candidates. This scenario is common in many technology companies in India.

One of the trends is the ability of technology to decentralise routine administrative functions from HR. The concept of employee self-service and management self-service helps capture and analyse data immediately. For example, it could be used by employees to request permission for leave without passing it to the HR department. This request could be vetted by the manager and would then be stored in the server. The HR personnel or the manager can pull out the data to observe trends. Technology has also automated the payroll and other mundane record- keeping activities of HR.

More sophisticated applications like the evaluation process could be easily managed by using technology. In the UK, Ashford Borough Council has started using an online performance appraisal system. The system has been designed based on a talent management system. Managers and employees go through the system by using a series of questions. The employee and the manager click on an icon at the end of the program to confirm that they agree with what was discussed. The program then generates a report that provides a composite ranking of the individual’s performance, their position in the talent grid compared to others in the organisation, and their training needs. Data are automatically stored in the system, which eliminates the need to enter information physically. It also helps organisations release valuable time for HR personnel to handle more strategic issues.

Virtual teaming and virtual conferences could be organised by HR for various training and development interventions. Downloadable videos could be e-mailed to new recruits to prepare them for the induction programmes. Technology could be used to model and map talent. Talengene in the UK has developed a behaviour formula for evaluating and profiling employees. The system is capable of generating various reports including stress management, learning methods, leadership styles, etc. The system then enables companies to create benchmarks for key roles in an organisation, and this pattern is then used to compare the input of all employees. Based on how candidates compare against the benchmark, organisations can distinguish talented people from less suitable candidates. They can also identify specific training needs that have to be imparted to prepare this talent pool