Holistic HR processes in small, emerging (sme's) organization
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The document discusses the challenges and shortcomings of human resource practices in small, emerging organizations, highlighting a lack of structured HR functions and high attrition rates. It advocates for a holistic approach to HR, including manpower planning, structured recruitment, performance monitoring, and compensation processes to improve talent retention and engagement. The proposed improvements aim to foster a performance-oriented culture and enhance overall organizational effectiveness.
Holistic HR processes in small, emerging (sme's) organization
- 1. Holistic HR Processes in Small, Emerging (SME’s)organization
- 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. 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. 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. A holistic approach on HR practices Holistic Approach Manpower planning process Recruitment process Performance Tracking & FacilitatingTraining & Development Process Recognition & Engagement process Compensation process
- 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. 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. Process of manpower planning 2019 2020 Volume increase Plant expansion Process addition New lines of business
- 10. Planning across Functions / Levels…. Existing manpower Required man power Function Operator Executives Managers Operator Executives Managers Production Quality Purchase Design Marketing
- 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…
- 13. *Will be discussed in Compensation Process
- 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…
- 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. 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. 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. 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. Components of Induction: Safety aspects Product lines / Customer Process / Challenges Do’s & Don’t as employee Familiarization of people and environment Facilities allocation
- 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. 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. Engagement Framework across LEVELS Task force Cross functional Teams Small group activities Suggestion scheme Create an environment to trigger performance and teamwork
- 25. Planning for compensation framework L1 L2 L1 L2 L3 L1 L2 L3 CEO General manager Managers / Heads Supervisors / Executives Operators
- 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 w.r.to each level. Variable pay in based on orgn performance + Individual performance as agreed mutually
- 27. Performance based Compensation System
- 28. Typical existing Compensation Process Ad hoc basis More of subjective No rationale behind the compensation hike Value Timeline
- 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. 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. 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. 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. 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. 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. 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. 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. Performance Tracking & Facilitation
- 38. This includes…. Setting Business and Functional Goals Organization wide deployment Organization Structure – Relationship Role clarity / Daily Management Process Review and facilitation mechanism
- 39. Organization structure • Span of control • Ideal structure • Reporting relationship
- 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. 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 [email protected] 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 [email protected] Hrs Kaizen 30 nos/Month Weekly meeting team Mon,[email protected] 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. Daily / Routine Management
- 43. Why this is important • Improving communication process • Quick decisions • Engagements
- 45. Organization wide Performance Management system
- 46. 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
- 47. How ? • Existing KPI extension into Functions & People specific
- 48. 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 %
- 49. Training & Development Process
- 52. 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 !! )
- 53. Lack of Winning Spirit
- 54. Your belief about people !!!
- 55. Winning Spirit.. Environment Structured & Consistent Process
- 56. Your Past does not matter !!
- 58. Mapping of Talents Potential Performance Low High High
- 59. Defining “ Potential” • Educational qualification • Rich experience relevant to your organization • Drive to Excellence • Enterprise attitude • Learning aptitude • Looking & Grabbing opportunities
- 60. Mapping of Talents AB VJ VBG GB,MS,VS,VIB, VCP,DCR,MCV SGB Potential Performance Low High High
- 61. Mapping of Talents AB VJ VBG GB,MS,VS,VIB, VCP,DCR,MCV SGB Potential Performance Low High High
- 62. 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
- 63. Know your people competency
- 64. Each Position needs different level of competency Technical Managerial Behavioral
- 65. 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
- 66. 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
- 69. Suggested Environmental factors.. • Uniforms • Neat Toilets • Facility for eating food • Water facilities • Natural Ventilation / Lightings • Housekeeping & Visuals representing positive thinking / team working
- 71. 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
- 72. Engagement framework Operators / Inspectors / Store keeper / Maintenance crew / Assistants / Clerks In charges / Functional heads Senior Managers / Functional heads
- 74. 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 !!
- 75. Thank You For more Business and Personal Excellence related articles, case studies. Pl visit www.winningmindssolutions.com S.Ganesh Babu [email protected]