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Holistic HR processes in small, emerging (sme's) organization

Most of the small, emerging (SME's) organization 's CEO or Business heads have a challenge on "PEOPLE MANAGEMENT."
When the business head does not plan and execute the people management process effectively, the organization suffers from slipping deliveries, quality issues, increase in human resources cost, IR related problems and eventually all those failures affecting the business profitability and growth.
The solutions call for a holistic approach to all aspects of the people management process, and this presentation attempts to give some perspectives from my experience with SME's in different regions.
Recently I shared this presentation in one of the SME 's CEO forum and received a lot of interaction and appreciation.
Hope this helps for business heads / CEO's

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Holistic HR processes in small, emerging (sme's) organization

  1. 1. Holistic HR Processes in Small, Emerging (SME’s)organization
  2. 2. Typical Human Resources (HR) practices in small, emerging organizations Mostly, No dedicated resource for managing HR functions; Being managed by Business Head / Operations Head Focus is more on IR / Statutory compliance than people development No structured Recruitment and compensation plan ; No structured performance monitoring / review mechanism; No differentiation between Performer and Non Performer Ad hoc manpower planning process ; Struggling to attract & retain talent
  3. 3. Impact of existing HR practices. Attrition rate high (in some cases >100%) “People become unfit !” within 1-3 months of joining Communication among people is getting complex People management becomes a major problem for CEO. Business impact -delivery slippage, cost overrun, repetitive customer’s complaints
  4. 4. Need for a holistic approach on HR practices All the people related challenges in the organization in due to Stand alone or lack of HR practices leads to poor management of people resources Still thinking that people management through relationship as practiced during early stages of the business will work during growth stage as well. Increasing complexity due to increase in size of the Business
  5. 5. A holistic approach on HR practices Holistic Approach Manpower planning process Recruitment process Performance Tracking & FacilitatingTraining & Development Process Recognition & Engagement process Compensation process
  6. 6. Manpower planning process
  7. 7. What is Manpower Planning Process? • Forecasting /Planning of Manpower w.r.t Growth Plan • Both in No’s and Mix in each level • Fulfillment plan ( Internal vs External) • Dynamics on Organizational Structure and reporting relationships
  8. 8. Need for manpower planning process Currently, No forward projection of manpower requirements Ad hoc recruitment as when required Compromising on talent and trying to fit in Not fitting in to culture/values Impact : Growth delays or affects
  9. 9. Process of manpower planning 2019 2020 Volume increase Plant expansion Process addition New lines of business
  10. 10. Planning across Functions / Levels…. Existing manpower Required man power Function Operator Executives Managers Operator Executives Managers Production Quality Purchase Design Marketing
  11. 11. Benefits of manpower planning process To plan budget /understanding manpower cost in each category and ROI To determine the job description / type of talent you look for.. To recruit and induct timely…
  12. 12. Recruitment process
  13. 13. *Will be discussed in Compensation Process
  14. 14. Clarity on the position and job description… Based on manpower planning , First write Job description for the position Understand the purpose of the position What competency you are looking for … Defining Accountability and Responsibility on a daily / weekly basis Defining reporting relationship both level up and down…
  15. 15. Sample Job description
  16. 16. Identifying search partners Quality and Quantity of potential job seekers will vary based on search partnership or channel you are approaching Possible search partnership Enquiring with known networks Job portals Recruitment consultant Advertisement in paper / social media Linkedin posting Each option have advantages and drawbacks
  17. 17. Interview process Some of the typical mistakes we do in interview process Going by the resume and cross checking Selecting the candidate based on past credentials ,not checking fitment w.r.t our cultures Screening based on compensation and level Not effectively spending time to understand the candidate’s potential to the job ( Checklist preferred)
  18. 18. Interview process How to pick right candidate through interview process ? Fitment to your culture Check the past credentials by Insisting on “ How” part Checking the responses by explaining your practical challenges  Look for attitude Example?
  19. 19. Induction Process Recognize & Acknowledge the “Fear Factor” in any Transition Friendly receptive and awareness will go a long way in engaging the people  Duration of Induction depends on the business size and process complexity.
  20. 20. Components of Induction: Safety aspects Product lines / Customer Process / Challenges Do’s & Don’t as employee Familiarization of people and environment  Facilities allocation
  21. 21. Performance Monitoring Process Daily management Review Forum Performance metrics Comprising roles and responsibility, daily / weekly activities Individual / functional KPI’sDaily / weekly / monthly forums
  22. 22. Identification of competency gap Sample: The development effort can be External training / online prg / certification. Internal training. On job training / Assignments. Coaching / Mentoring by seniors.
  23. 23. Engagement Framework across LEVELS Task force Cross functional Teams Small group activities Suggestion scheme  Create an environment to trigger performance and teamwork
  24. 24. Compensation process
  25. 25. Planning for compensation framework L1 L2 L1 L2 L3 L1 L2 L3 CEO General manager Managers / Heads Supervisors / Executives Operators
  26. 26. Planning for compensation framework Each level represent ranges of compensation. It need to be determined Based on •Qualifications •Relevant work experience •Market competitive Benefits: Motivation aspects Easy to fit new people w.r.t org structure Scope for elevation-opportunity in the organization Design of compensation plan Must meet minimum wage act. Fixed & variable pay each level. Variable pay in based on orgn performance + Individual performance as agreed mutually
  27. 27. Performance based Compensation System
  28. 28. Typical existing Compensation Process Ad hoc basis More of subjective No rationale behind the compensation hike Value Timeline
  29. 29. What is Performance based compensation system? People will be monetarily compensated based on their individual & organizational performance in a given period of time. Compensation is directly related to set of key performances (KPI’s) as set and agreed by both employee and employer For example, KPI’s include OTD, Rejection value, System adherece, Housekeeping and personal development Compensation include Basic salary,Increments and Bonus
  30. 30. What is Performance based compensation system?  Monthly compensation can be split into FIXED PAY and VARIABLE PAY. Variable pay can be based on prorate basis of KPI performance of an individual
  31. 31. Why performance based compensation system ? To promote organization wide performance enhancement. To identify and reward the performer To differentiate the performer and non performer To bring healthy, solution oriented, performance culture in the organization To retain and engage the talent in the organization.
  32. 32. Existing compensation system and the drawbacks People are given equal (or) subjective increments every year irrespective of organizational / individual performance Promotes mediocre performance culture only. No differentiation between performer and non performer
  33. 33. Pre requisite for performance based compensation system Organization structure with band defined like Operator – Supervisor - In charges – Senior Management -CEO In each band, let us define the fixed and variable % of the compensation. Operator Supervisor / Engineer Asst.mgr / mgr Senior mgr / GM Fixed Variable 70% 30% 80% 20% 90% 10% 95% 5%
  34. 34. Pre requisite for performance based compensation system Redesignate / reposition people depending upon their existing compensation pattern. Define key performance metrics in each band and individual Tracking and bringing transparency in KPI’s to all stakeholders every month./ Quarter
  35. 35. How to start executing ? For example, GM (O) is given a set of KPI Like, OTD 100% Mfg cost <20% Abs rate 10% ; System Adherence  Say his current CTC is 1 Lakh / month His salary can be made as FIXED compensation as 70 k /month and VARIABLE compensation as 30k / month. He will be getting 70K as fixed, 30 k will be given on a pro rate basis depending on the KPI performance on a monthly or quarterly basis
  36. 36. Regarding bonus  @ end of the year based on the “Excess cash” generated from previous year, CEO can allocate some percentage as bonus as organization performance incentive . This can be distributed based on the BAND Based on the level , % of compensation can be given
  37. 37. Performance Tracking & Facilitation
  38. 38. This includes….  Setting Business and Functional Goals  Organization wide deployment  Organization Structure – Relationship  Role clarity / Daily Management Process  Review and facilitation mechanism
  39. 39. Organization structure • Span of control • Ideal structure • Reporting relationship
  40. 40. Why this becomes critical now? • Relationship & Informal management becomes complex when growing big • Communication complexity across level leads to confusion • Accountability missing if no structure • Review mechanism across different structure improves speed of execution • Performance demands clear metrics
  41. 41. Sample –orgn structure/ roles clarity framework S.No Position Name Key accountability Metrics Daily / Weekly Management Reporting to Reportees 1GM xyx 1. Sales target. 1.5 Cr Daily 11'0 clk meeting ceo XYX 2. New customer development 2 new Customers Every Thu @ 15.30 Hrs KPI Meeting Weekly delivery closure Thu@15.30 Hrs 01 Customer visit Ever Friday follow-up new certification 2Plant Head xyx 100% Prod&Quality achievment Delivery actualisation Daily 11'0 clk meeting GM All Supervisors OEE Improvements 80% OEE Every Thu @ 15.30 Hrs KPI Meeting Man-power engagement % of Absent Weekly delivery closure Thu@15.30 Hrs Kaizen 30 nos/Month Weekly meeting team Mon,Fri@14.00 Hrs Visual Management 5S target 50% Daily audit and report @ 10'0 clk Daily OEE review with team @ 09.30 Cost Analysis Rej&R/W cost, Inv cost Daily(Rej&R/w) @ 12.00 clk Weekly(Inv cost) wed@ 15.00 hrs daily Production report(Tgt vs Act) before 9.00 am 3Supervisors xyx 1. Hourly output Daily O/P(Act vs Tgt) collect data from each m/c Plant head All Operators OEE Updation&improvements 80% OEE quality, maint co-ordianation Visual Management 5S target 50% Daily OEE review with team
  42. 42. Daily / Routine Management
  43. 43. Why this is important • Improving communication process • Quick decisions • Engagements
  44. 44. Organization wide Performance Management system
  45. 45. Why ? • Promote Performance oriented culture • Differentiating performer and nonperformer • Engage individual and team • Natural Team Building process • Functional efficiency Improvement • Moving from functional to Organizational goal achievement
  46. 46. How ? • Existing KPI extension into Functions & People specific
  47. 47. Net Profit : 10 % Production delivery : 95 % Operating cost : 5 % of sales value Overall Effectiveness : 80 % Power Expenses : Rs 20 / Kg Production per hour : 1 T Efficiency : 90 % Rejection : 4 %
  48. 48. Training & Development Process
  49. 49. Complexity of people development
  50. 50. Concerns or Complaints • They are not doing what I am expecting • Not getting into analysis /solutions • Fighting each other in meetings • Not taking ownership • They are looking for solutions from me ..(they are not thinking !! )
  51. 51. Lack of Winning Spirit
  52. 52. Your belief about people !!!
  53. 53. Winning Spirit.. Environment Structured & Consistent Process
  54. 54. Your Past does not matter !!
  55. 55. Understand your organization's (Inner) Strength
  56. 56. Mapping of Talents Potential Performance Low High High
  57. 57. Defining “ Potential” • Educational qualification • Rich experience relevant to your organization • Drive to Excellence • Enterprise attitude • Learning aptitude • Looking & Grabbing opportunities
  58. 58. Mapping of Talents AB VJ VBG GB,MS,VS,VIB, VCP,DCR,MCV SGB Potential Performance Low High High
  59. 59. Mapping of Talents AB VJ VBG GB,MS,VS,VIB, VCP,DCR,MCV SGB Potential Performance Low High High
  60. 60. Mapping of Talent… • This is dynamic • Need experience and maturity to judge • Not for penalizing people, it is for Development • Helps to gauge the organization strength on short term & long term w.r.t to your VISION • Helps to develop the People & elevate the performance
  61. 61. Know your people competency
  62. 62. Each Position needs different level of competency Technical Managerial Behavioral
  63. 63. Competency assessment Position Incumbent Forging process Metallurgy applications Equipment Maintenance Problem solving People management Statitistcal process control Computer applications Production In charge Mr.XYZ Yes No No No Yes No No Action : Identify the competency requirement for each Position and assess the GAP
  64. 64. Competency assessment • This will help to understand the strength of the team (Organizations as well !!!) • Helps to plan training and development programmes for Individual / Functions / Organization as whole • This is dynamic and continuous process People development is a responsibility of the LEADER
  65. 65. Employee Engagement
  66. 66. Environment and Process drives Engagement
  67. 67. Suggested Environmental factors.. • Uniforms • Neat Toilets • Facility for eating food • Water facilities • Natural Ventilation / Lightings • Housekeeping & Visuals representing positive thinking / team working
  68. 68. Structured Engagement Process
  69. 69. Structured Engagement Process • Top driven • Long term focus (short term ??) • Well defined (No hurry ) • Clear Communication / Policy • Reward performer / punish non performer • Become part of daily management
  70. 70. Engagement framework Operators / Inspectors / Store keeper / Maintenance crew / Assistants / Clerks In charges / Functional heads Senior Managers / Functional heads
  71. 71. Case study examples..
  72. 72. How to initiate ? • Create forum to communicate • Genuinely demonstrate you are looking for Growth! • Start small • Define process and owners • Launch it • Stick on it , what may come !!
  73. 73. Thank You For more Business and Personal Excellence related articles, case studies. Pl visit S.Ganesh Babu