Known as the Father of Human Resources Department in the corporate world of India since the 1940s, Dr. T. V. Rao says we need to adapt to the changing times where millennial (youngsters born between 1983 and 2002) form the major workforce particularly in technology dominated fields. With the socio-cultural and familial environment changing drastically where barriers between seniors and juniors at the workplace has merged, it is time we renamed it the 'Human Possibilities' department instead of ‘Human Resources’ department. A human being cannot be a 'resource' as he is a living being with his mind, heart and intellect working in his own space of things. Hence, 'human possibilities' would signify the variegated possibilities of individual performance that could reflect on the company’s performance. An insight into his take on HR and how other countries do it
HR is not just a crucial business function; the success of HR in any country is often tied to its Human Development Index, a global index which measures human development in nations. Since the 1970s, India has implemented a series of breakthrough HR initiatives, but its overall Human Development is less than satisfactory. To analyze the challenges faced by India and the steps it has taken to overcome it, the National Institute of Personnel Management (NIPM) organized a session called NATCON 2018, chaired by none other than the legendary Dr. T.V. Rao, who is credited for the introduction of the human resource development function in India in the 1970s. Dr. Rao chatted with a panel of experts from countries around the globe, to understand the challenges faced by their countries and compare them with the HR movement in India. Corporate Citizen brings you the riveting session.
"If an institution creates a culture where everyone is an institution builder, then wonderful things can happen. When it comes to performance culture, India has wonderful examples"
(Dr. T.V. Rao Chairman, TVRLS, Former Professor, IIM-A, Founder & First President-NHRDN)
Today, I see performance culture being promoted in several countries. I want to talk about this culture from the Indian experience. My thoughts go back to 1974, when the idea of reviewing the existing performance appraisal system was floated. The idea was to get people to enjoy their work and take joy in it. Udai Pareek of IIM-Ahmedabad and I interviewed about 40 officers (GMMs, JGMs, DGMs, Managers, Covenanted Officers and Supervisors) from L&T to review the existing system. On the basis of their review we suggested the introduction of an Integrated Human Resources Development system to include Performance Appraisal, Potential Appraisal, Career Planning and Development, Feedback and Counselling, Training and Organization Development. To quote the report, "We recommend that Performance Appraisal, Potential Appraisal, Feedback and Counselling, Career Development and Career Planning and Training and Development get distinct attention as unique parts of an integrated system which we call the Human Resources Development System". (Nowhere in international literature was the term Human Resources Development System known to have been used until then)
Since that time, HR has come a really long way in India. Just last year at a CII event, I came across a group of people from across countries, who were chatting during a tea break. One of them, a young girl herself, headed an IT company. She was voicing her concerns to the group. She expressed that the average age of employees in her company was 24 years, and being 34 years of age, she found it challenging to manage employees in their 20s. This intrigued me and I asked her how she was maneuvering these challenges. She said that her company had implemented a number of measures to reach out and connect with employees. These included policies such as work from home and flexible timings, which went a long way in making employees more comfortable. She said that her company also trusts their employees to take the right decisions, which fosters a culture of understanding. The third point she iterated was that her company was hierarchy-less, which got rid of formal structures altogether. This meant that everyone interacted with each other on an equal basis based on mutual respect.
Hearing her brought a smile on my face. My mind went back to the past. This is exactly what Dr Vikram Sarabhai envisioned when he started the Indian Institute of Management - Ahmedabad. He imagined organizations without hierarchy, where everyone is treated with respect and given freedom to make their own decisions. He imagined a world without barriers, where everyone is treated equally and there is dignity of labor. Today his dream is a reality.
"In the last few years, we have taken numerous measures to create and foster a performance culture in India. We have done 360 degree feedbacks, we have built assessment centers, and we have constructed a competency environment"
This kind of leadership is not just limited to IIMs. It is practiced at the Indian Space Research Organization (ISRO). This is especially admirable because it is a government Organization which has freed itself from the shackles of bureaucracy. If an institution creates a culture where everyone is an institution builder, then wonderful things can happen. When it comes to performance culture, India has wonderful examples.
If only this culture is replicated across government organizations, productivity would increase significantly. If an Organization has 15-20% of people giving outstanding performance and the rest are average, it leads to demoralization among employees in the organization. It makes them feel undervalued and underappreciated. This negative mindset leads to a further deterioration in their work and the output of the company eventually suffers. In a bid to create a performance culture, sometimes the opposite is achieved. This type of toxic culture was prevalent in India in the 1970s. This is what we emphasized when we called for a re-haul in 1974. In our minds one thing was certain, we must find a way to delink appraisals from rewards. Please note that we didn’t say we have to delink performance from rewards. But reducing a human being’s entire year's work to mere numbers is not fair.
When I visited the Disha Foundation a couple of years ago, Sadhguru said, "A human is not a resource, and to call a human a resource is a crime." I didn't agree with this statement of his, but he also said "A human is a possibility, and you can't measure possibilities." I liked this statement. HR departments can be called ‘possibility departments.’ (laughs)
In the last few years, we have taken numerous measures to create and foster a performance culture in India. We have done 360 degree feedbacks, we have built assessment centers, and we have constructed a competency environment. We have done fabulously on these fronts. Even multinational companies who enter India can vouch for this.
All is not rosy, though. Despite all the measures we have taken, when we look at the Human Development Index, India ranks at 139th among 186 countries. This is an alarmingly low rank by any standard. For comparison, Australia is at No. 3, Hong Kong at No. 7, Sri Lanka at 76, and Malaysia is at 57. How is it that despite doing so well in HR, we are so behind in Human Development?
I feel the answer to this is that we have done many things, but we have done them wrongly. In an attempt to improve performance, we have tried to control people, not build people. But the real question is, at what cost? If leadership is hierarchical, we know what the result will be. We started by saying that the job of the HR is to create happiness in the workplace. It is time for India to introspect.
"One act of ball tampering resulted in shock, disrepute, and brought global shame to Australia. What good is performance if it is not ethical?"
Dr. T.V. Rao - I would like to start with Australia, which has the Human Development Index rank of 3, and it is also a Commonwealth country. Ms. Rosemary, what is the secret? What is it that Australia has done that makes it so successful in HR? Also, everything has a flipside. So what are some of the concerns that HR in Australia needs to address?
(Rosemary Guyatt General Manager, People and Culture, Australian HR Institute)
I don’t know exactly what it is that makes Australia rank so high, but I can say that rank is in danger of slipping. There are a number of concerns that HR in Australia is currently facing. Let me start with some stories about HR in Australia. If you looked in the newspaper, walked into a boardroom or a party, or had a conversation at the water cooler at any office in Australia this year, you would invariably find three topics of conversation, namely –
All these incidents are related, and that is what I want to talk about today—the connection between performance culture and ethics. What happens if we disregard ethics in the pursuit of performance?
Take the example of the Australian Cricket team. In March 2018, the men's Australian cricket team was involved in a ball-tampering scandal during and after the third Test match against South Africa in Cape Town when Cameron Bancroft was caught by television cameras trying to rough up one side of the ball to make it swing in flight. Captain Steve Smith and Vice-captain David Warner were found to be involved and all three received unprecedented sanctions from Cricket Australia.
Was all of this worth winning a match? One act of ball tampering resulted in shock, disrepute, and brought global shame to Australia. What good is performance if it is not ethical?
Our financial services sector is in the news for all the wrong reasons. Finance is Australia’s biggest industry, and its banks are some of the most profitable in the world. Despite its strong position, Australia’s banking and financial services sector has been rocked by a series of scandals over the last decade, with all the “Big Four” largest banks being accused of serious misconduct. As a result, a royal commission, Australia’s highest form of public inquiry, has been called to investigate the scale of wrongdoing and help restore confidence in the sector. Even though the investigation has only just started, it has already uncovered widespread examples of careless, and at times fraudulent, lending practices. Loans were given indiscriminately, customers were charged dubious fees. Thanks to conscientious activists and whistleblowers, these organizations are now being held accountable.
There cannot be prosperity without ethics. An Organization without ethics may make money in the short term, but it will eventually crumble.
In my opinion, Education + Enterprise x Ethics = Future Prosperity.
"Performance must not just be about achieving targets. It must be about maintaining quality. Unless quality is maintained, output is irrelevant"
Dr. T.V. Rao - I visited Hong Kong around 30 years ago, and came back very impressed with their HR practices. One company I visited felt that the designations they have assigned to their employees don’t do them justice. So they allowed employees to print any designation they deemed fit on their visiting cards, except for the Managing Director. They also said that your salary won't change. This led to an increase in performance. Tell us about the Hong Kong perspective.
(David Li Chi-Ming President – HKIHRM, Hong Kong)
Performance must not just be about achieving targets. It must be about maintaining quality. Unless quality is maintained, output is irrelevant. In Hong Kong, small businesses constitute 85% of the business. These small businesses maintain the same quality standards as large businesses.
In Hong Kong, we have a high ranking post of the Chief Secretary in the government. The Chief Secretary formulates and implements government policy, gives advice to the Chief Executive as a member of the Executive Council, and is responsible for managing the Government's relationship with the Legislative Council and drawing up the Government's legislative program.
Performance and standards are scrutinized and maintained by the Executive Council. Whether big business or small, they have to maintain these standards. It is when everyone takes it upon themselves to adhere to the highest standards of accountability that we can achieve superior performance culture. If the efficiency of the government bodies increases, this in turn puts pressure on private companies to be on their toes. It is through this cohesion that performance culture can be built.
"There are several challenges in creating a performance culture. There is resistance to change, shortage of money to implement processes, and lack of education. First generation entrepreneurs lacked education, but this is now changing"
Dr. T.V. Rao- I must ask Musharrof ji what lessons India can learn from Bangladesh. I think one lesson which we certainly can learn is in the area of micro finance. Grameen Bank has been a source of inspiration for many in the last two to three decades. Please share with us what Bangladesh is doing to improve its performance culture, and why are both India and Bangladesh struggling when it comes to our human potential?
(Md. Musharrof Hossain President, Bangladesh Society for Human Resources Management (BSHRM) & President, Asia Pacific Federation of Human Resources Management (APFHRM))
India and Bangladesh are similar in several ways. We share a common history and a similar culture, and we are both ranked close to each other in the Human Development Index. HR in Bangladesh is going through a very optimistic and positive phase under the leadership of our Prime Minister Shaikh Hasina.
In the past, Bangladesh has had a mixed performance culture. It differs with the government sector and private sector, and between MNCs and small companies. The government sector employs 3% of employees, but it is a powerful sector. This is the least productive sector in Bangladesh. The private sector is much more productive. There are several challenges in creating a performance culture. There is resistance to change, shortage of money to implement processes, and lack of education. The first generation entrepreneurs lacked education, but this is now changing, as several second generation entrepreneurs are educated in the West and they return to their home country to start businesses. The government is also changing its mind-set and becoming more productive, as employees there realize that poor productivity will leave them redundant. The participation of women in the workplace is gradually increasing. In my own organization, we have 51% female employees. Flexible timings are also being introduced in organizations. Change is happening, and I hope that in a few years, Bangladesh will be among the leading countries in performance management.
"The Prime Minister has a clear mission that we would be a developed nation by 2020. We had an aim for 55% skilled population. When we started in 1993, we had only 18% skilled workforce. The government passed a legislation which made it mandatory for every company, national or foreign to pay 1% of their salary to a fund, managed by the government, called the Human Resource Development Fund. We used these funds to start skilling centers to skill labor"
Dr. T.V. Rao - There is something to learn from every country—how they tackle their challenges. I would now like to turn to Malaysia. I think it was sometime in the 1980s that Dr. Mahathir bin Mohamad started the 'Look East' policy. Another policy I admire about Malaysia is that when India was struggling with Five-Year Plans, they learnt from India and started 30-Year Plans. What is the secret of Malaysia's success?
(Aresandiran J. Naidu President – MIHRM, Malaysia)
HR was the first job I had. I joined at age 23, and have been there since. I have observed the changes happening in HR since the beginning, and although they are welcome, there is a lot more to achieve. Let me give you some basic statistics of Malaysia first. We have a population of 33 million. The labor force is 68%. On capability ranking, we rank 23rd in the world. Our retirement age is 60.
What is it that drives performance management in Malaysia? The Prime Minister has a clear mission that we would be a developed nation by 2020. We had an aim for 55% skilled population. When we started in 1993, we had only 18% skilled workforce. The government passed a legislation which made it mandatory for every company, national or foreign to pay 1% of their salary to a fund, managed by the government, called the Human Resource Development Fund. We used these funds to start skilling centers to skill labor. Companies too can skill their workforce and claim a refund. Over two decades, the percentage of our skilled workforce has skyrocketed.
Last year, we introduced another legislation called the Employment Insurance System from 1st January 2018. This allows employees of companies to leave their company on a voluntary basis for up to six months, and register for social funds. During these six months, they will be trained and up-skilled. These are the systems put in to grow the nation. We are committed to providing more opportunities for employees to grow and for the workforce to skill themselves, so that we together can grow as a nation.
"Education and health services are free and have been expanded in recent years, in order to create further employment opportunities and ensure inclusive growth. Keeping education free or at the very least very affordable is the key to developing a skilled workforce"
Dr. T.V. Rao- Let’s now move on to Mauritius, which is quite close to Malaysia in the Human Development Index, despite being much smaller in size. What is the key to Mauritius's progress in HR?
(Areff Salauroo President, AHRC & President MAHRP, Mauritius)
Mauritius is sometimes called 'Chota Bharat' (Laughs). We have a population of 1.3 million. Mauritius has a strong human capital foundation developed through consistent and equitable investment in human development. This enabled us to exploit advantages, learn from expertise brought in through FDI and maintain competitiveness in a fast evolving international market. Education and health services are free and have been expanded in recent years, in order to create further employment opportunities and ensure inclusive growth. Keeping education free or at the very least very affordable is the key to developing a skilled workforce. The educated and adaptable workforce were essential elements of the 1980s export orientated growth. We imported workforce from India, Bangladesh and many other countries. Around 90% of entrepreneurs in the export processing zone (EPZ) and in the manufacturing sector are Mauritian nationals. Businesspeople had the human capital, education and knowledge needed to exploit market opportunities.
From the beginning, we have been observing what successful countries are doing, in order to improve our performance management. The world is becoming globalized. We must keep up with this pace. We still have many challenges like achieving gender equality, and we are working towards it.
"The only benchmark for 'A great place to work' is the happiness and wellness of the employees. In my organization, my people are not called employees, they are called members. organizations need to instil high performance culture at the time of inception"
Dr. T.V. Rao - I have visited Sri Lanka several times in the last 20 years, and I was very impressed by their seriousness in learning. If you do a competency management workshop in Sri Lanka and go back after six months, you will see that they have all become competency experts. Fifteen years ago, I was astounded by the best HR practices followed there.
Can you tell us how Sri Lanka has managed to improve its HR proficiencies as well as earn a good Human Development Index rank?
(Prof. Ajantha Dharmasiri Vice President of the Asia Pacific Federation of Human Resource Management (APFHRM), Director and the Chairman of the Board of Management of the Postgraduate Institute of Management, University of Sri Jayewardenepura)
I think if anyone outside Sri Lanka knows everything about HR practices practiced there, it is Dr. T.V. Rao. Dr. Rao quoted some gentleman saying 'How can you call a human being a resource?' The same thing happened to me. I was asked once, how can you call human a resource when resources are material? Why not call them human capital? I think that is even worse than calling them resource. He also talked about having less hierarchy or a lean structure of management. In Sri Lanka, that has always been there. The boss and the employee usually travel by the same mode of public transport. There aren’t many rigid structures there. In fact, Human Resource Management wasn't taught in colleges here for a long time, except maybe for expats. When several companies started investing in Sri Lanka in the 1980s, they had to start adapting to cultures there.
Sri Lanka has a population of 22 million, in a land mass of around 65,000 square kms. We have around 1.5 million government employees and more than 11 million employees working in the private sector. Our retirement age in the public sector is 60, and you can extend it to 62. We don't have a retirement age in the private sector, but it is traditionally taken as 55, as EPF can be taken from age 55. Our unemployment rate is less than 3.8%. We in fact have a shortage of labor. We need more hands than we have in factories and organizations. Our number one source of manpower is foreign employment. Number 2 is the apparel sector- manufacture and exporting. We have scarcity of labor in the steel manufacturing sector, and other private sectors. That is where our situation stands.
The bright side is that the National Vocational Authority of Sri Lanka has around 250 government sponsored vocational training institutes around the country. Many students are taking interest in these institutes, looking to up-skill themselves. We have started some best practices which are garnering acclaim. We have started HR awards for performance excellence. I believe, the only benchmark for 'A great place to work' is the happiness and wellness of the employees. In my organization, my people are not called employees, they are called members. organizations need to instil high performance culture at the time of inception.
"The main problem is that your life is going away without realizing your full potential. In your life, if you do not do what you cannot do, it is not a problem. But if you do not do what you can do, your life is a tragedy"
You get to do more only when you enhance your capabilities. How organized your body, mind, emotions and energy are right now is how much you get to do. Whether you can do it like someone else or not is not the point. Are you doing it to your full potential? That is the point.
If you want to function to your full potential, you have to see that there are no inner issues anymore. Your work is about external issues. Action is always about the external, not the internal. Most people are working for their satisfaction. They would be lost without work. They are working to make themselves into something. As long as you are doing work to find yourself or fulfil yourself, how much ever you do, it is not enough, there is something within you which always wants a little more.
If you are still working in pursuit of happiness, it is time to change. If you are doing work as an expression of your joy, then time is not a problem. There are 24 hours in a day. How much you can do will happen, what you cannot do will not happen – simple! But are you working to your full potential?
Most people are not busy, they are preoccupied. If they look at their body and their mind, a lot of their activity is unnecessary, especially mentally. Generally, more than 80% to 90% of the mental activity in human beings is unnecessary. If you drop all that unnecessary activity, you will not feel you have done too much.
Mentally I never feel exhausted, nor do I feel stressed because I only think what I want to think. I don’t think anything that I don’t want to think. But when there is no Organization in the mind and body, you will always feel overworked. You will always feel time is not enough. But the main problem is that your life is going away without realizing your full potential. In your life, if you do not do what you cannot do, it is not a problem. But if you do not do what you can do, your life is a tragedy.
People are taking so much care to maintain their machines outside. You send your car or motorcycle for servicing. Have you done any service to your body and your mind? Have they been taken care of properly? Nothing has been done. If you do a little bit of servicing every day for the body and mind, you will see, suddenly you function much better. If you start doing a simple kriya or meditation for a few minutes a day, what you are doing in eight hours right now could easily be done in four hours. You will have a lot of time on your hands.
By Neeraj Varty
