HUMAN RESOURCE MANAGEMENT IN RECESSION

July 2012

Human Resource Management Project

Submitted By: Group 08 Jayant Gadi (IPMX05021) Dr. Khushi Ram (IPMX05023) Medha Gupta (IPMX05030) Mohit Jain (IPMX05031) Nidhi Singh (IPMX05035) Puneet Malik (IPMX05040) Vivekananda Jha (IPMX05069)

Key HR Challenges During Turbulent Times

Slashed Budgets

Decimated Departments

Low Employee Morale

Organizational Restructuring

Short Vs Long term Planning

HR PRACTICES AND PROGRAMS

Practices and Programs

Balance Between Cost Reduction and Maintaining Motivation & Commitment

HR Practices hard HR practices
Curbs on pay & bonuses Headcount reductions Cuts in working time Curbs on recruitment & promotion Productivity measures

soft HR practices
Communications Engagement & involvement Training, talent management & staff redeployment Larger pay cuts for higher-paid

Direct Cost Reduction

Maintain Motivation and Commitment

HR BEST PRACTICES IN RECESSION

Agile Talent Management Policies & Systems

Ensure updated organization policies Optimization of operational capability Across the board productivity and efficiency improvements Flexible workweek scheduling to maximize production and cut overhead costs

Volvo
In 2010-11, a policy on advance travel bookings for sales teams (unless approved by head of department) was introduced to reduce travel chares associated with last moment bookings Ericsson, Ireland

Cost Controlling policies Increase in working week from 37.5 to 40 hours Playing a key role as a strategic partner on line of Ulrich-style business partner model Universal and Transversal Policy approach Global framework for diversity management based on Innovative thinking and best practices at subsidiary Shifting of 300 jobs to China as part of world-wide restructuring programme announced by Ericsson headquarters

Agile Talent Management - Compensation

Redesign compensation schemes Cancellation of several benefit schemes Tata Motors, India Additional component was added to the salaries to increase net take away Long term benefits were curtailed, but increased cash in hand for employees Bonus payments were deferred Mindtree, India Basic-salary component was reduced leading to lesser companys liabilities for EPF and Gratuity components Reduction in basic pay was compensated by increase in other components which were not linked to it

Medtronic, Ireland
Committed 4.5% merit based pay hike in 2007 to trade union, which couldn't be met in 2009 In 2010, HRD negotiated for 4.5% merit based pay hike in two tranches of 2010 along with appointment 50 temporary workers on permanent rolls

Agile Talent Management Performance Management

Monitor productivity aggressively Performance linked pay Focus - key employees Quick wins

Ericsson, Ireland Competency-based management Keeping required present & future competencies in mind Performance Managements system that monitors and guides formation of competencies

Agile Talent Management Training

Cross training of resources for making them employable in different roles during downturn Late CK Prahlad (Management thinker and guru) Tata Motors, India In 2008-09, all India sales force was trained extensively on the product and process at one location Dealer sales force was given product and soft skills training at the manufacturing plant itself Jamshedpur plant was shut down for 4 days and employee were given leave Mindtree, India Initiated the six-sigma based process improvement programs and certification for employees Ericsson, Ireland No budget reductions for peoples skills and competencies development Medtronic, Ireland Senior managers interacted informally with all employees on an on-going, day-today basis, whether this is over lunch, in the car park or at work stations

Agile Talent Management Retain Top Talent

Retain top talent Identify the real top potentials and to strengthen their development program

Agile Talent Management Reward & Recognition

Make emotional R&R mandatory - Budget part of the day, part of the week, and part of the month for them to recover from toxic emotions and to restore their sense of what is good and true, better and possible Allow frequent walks in the woods

Agile Talent Management Internal communications

Organizations that are frank in their internal communications about the difficult times and resulting cost-cutting measures foster credibility with the workforce Medtronic, Ireland Extensive discussion to devise communication strategy with wider management team and VP, HR at parent subsidiary in Minneapolis Managers at all levels were briefed and equipped to cascade relevant information and curtail grapevines Communication based on business rationale, of emerging from crisis as a stronger and better company, for the pay cuts and promotions freeze Cooperative and mutual-gains negotiations with the Trade union

Medtronic, Ireland CXO and HR head participated in meetings to communicate rationale behind changes Q&A based discussion with the employees

CRISIS AS AN OPPORTUNITY

Crisis as an Opportunity
Evaluating performance with quantiable metrics is a priority Systems are in place, problem is with execution The senior management expects all the support functions to bring innovative ideas and solutions which will lead to stronger organization, when the next growth era comes having the right policies and practices for the new slimmeddown and muchchanged world

Chief People Officer at McDonalds aptly summarizes it: theres going to be a lot of pressure to cut back budgets, but those HR departments (and employers) that maintain the focus on core, longerterm objectives will emerge as successful in the long run

Process is perpetual - you help to bind employees emotionally to the company not only in bad times, but also in good times when there is a lot of competition

References
Roche, William K. Human Resources in the Recession: Managing and Representing People at Work in Ireland 14 July 2012

http://www.ucd.ie/t4cms/Human%20Resources%20in%20the%20Recession%20B ook%20Manuscript.pdf

THANK YOU