24 December 2019 11:42:31 IST

‘More placement opportunities for HR graduates from top B-schools’

Intellectual capital outweighs tangible assets in modern organisations. It is people who make or break business, says TV Rao, Chairman, TVR Learning Systems

TV Rao, currently Chairman of TVRao Learning Systems, was a Professor at the Indian Institute of Management, Ahmedabad from 1973 to 1994 and a Visiting/Adjunct Professor till recently. With over 40 years of extensive work in the field of HRD, he is popularly known as one of the ‘Fathers of HRD in India’.

In this wide-ranging interview, Rao speaks on why the HR discipline needs to undergo a change, whether bright students are opting for HR and if HR professionals are finding a place at the high table.

 

 

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Why and how does the discipline of HR need to change?

HR exists in a context. The context needs to be understood and appreciated along with the role of HR.

HR managers need to understand a lot about organisations, their business, customers, suppliers, various business processes and functions before they learn about people and HR. They should appreciate the role of intangibles or soft variables in business. In many new economy industries, such as IT, financial services, e-commerce, and other new economy industries, a large part of the market value of organisations is intellectual capital. Such capital outweighs the tangible assets in modern organisations.

 

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It is people who make or break business. Developing an appreciation of intellectual capital (intangibles) that make organisations sustainable and build long-term capital is still not being understood by most managers. HR managers seem to work for tangibles whereas their success is in creating intangible assets.

 

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Even CEOs don’t recognise this. It is not their fault as they are driven by the mad rush for quarterly tangibles — results.

Modern developments in HR theory and practice, including competency mapping, assessment and development of talent using assessment centres and 360-degree feedback, are not being given adequate importance by managers.

In colleges, students are still learning routine HR than development HR or business HR. Though at one level HR has become more critical and has come closer to business, its integration needs to be managed better. How are students viewing the HR profession and the courses offered by B-schools today? Are more opting for it?

 

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I’m afraid the respect for HR in most prominent B-schools remains at the same low level as before. When I joined IIM-A in the early 1970s there were many takers for the personnel management elective courses besides manufacturing and systems related courses. Over the years, that percentage has gone down. Partly because specialised schools to promote HR and even a Masters programme in HR have come up.

For example, institutions such as XLRI, TISS, XIMB, IIM Ranchi, MDI and SCMHRD have full-time two-year dedicated HR courses, the registrations are good and bright students do join them. Some schools of social work are also able to attract good HR students. However, whether they attract the brightest of the lot into HR is doubtful, though this has tremendously improved. A large number of engineers opting for Masters in HR courses is an indication of the same. Placement opportunities for good HR graduates from good schools have gone up. Where it is still focused on industrial relations and human resource management, and not so much on HRD, the demand may not be so high. Students view HR more positively now than before.

The number of HR conclaves organised round the year by most colleges (though for placement purposes) is an indicator of the increasing popularity of HR.

Has the career path to the top improved for a new HR recruit? Does the HR professional today have a seat at the high table?

Definitely it has, for a talented HR candidate. Talented HR professionals are in short supply in spite of the increase in the number of institutions offering a HR specialisation.

The HR profession has earned its position at the high table. It got built up in the last 20 years gradually. Some HR Directors are paid very well, even better sometimes than others Directors. Some good HR Directors have made a mark, become successful CEOs, handled other functions very effectively and boosted the image of HR. However, these are very few, perhaps in less than 5 per cent of our corporations across the country. Over 90 per cent of the CEOs still consider HR as a support function and not as a business driver or business partner.

 

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I personally consider HR as business and a step above being called a strategic business partner. In my view there can be no business without good HR or talent and it is important for even CEOs to take over the role of HR. The scope is high and we still have a long way to go. The credibility of most HR professionals is weak. They shift jobs frequently, use consultants to do their work, focus on tangibles at the cost of long-term intellectual capital building, don’t use self-reviews or seek 360-degree feedback for improvements and are more eager to please their CEOs than to guide them. All this affects their credibility. If HR professionals raise the bar, focus on nurturing intellectual capital and stay relevant and competent, their place at the high table is ensured.

With more start-ups, younger CEOs and a young workforce, has HR needed to redefine itself to deal with a new animal at the workplace?

We (late Dr Udai Pareek and me) started the first dedicated Human Resources Development department in L&T in 1974-75. We gave it a new philosophy and agenda. The main agenda of HR is to create organisational capabilities through various HR systems and practices. We mandated HR to build the three Cs: Competence, Commitment and Culture. We are still struggling with the first two Cs and we have underplayed culture and values which are critical in building sustainable organisations. It is only after liberalisation that organisations in India started seriously focussing on competency building through assessment and development centres, leadership development programmes and 360-degree feedback.

 

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Technology has totally changed the nature of learning. Culture and commitment surveys existed from the early 1960s and 1970s. Unfortunately, they got more commercialised and are being used for brand-building than for genuine improvements. For young CEOs and younger professionals, HR has to be totally redefined and repositioned. In future we need to move from HR as a job to HR for everyone. All CEOs need to be HR-sensitive, if not proficient. Talent-spotting, nurturing and developing skills are going to make or break businesses.

The future is going to be more and more of an economy based on knowledge and technology. Every manager, and especially new generation CEOs, have necessarily to learn HR and cannot afford to delegate to specialists any more. The specialist’s role will become purely developmental. They will need to become researchers and innovators of new talent management practices and will need to focus a lot more on culture and values and building other critical variables that will nurture intellectual capital and grow intangible assets.

How has HR pedagogy fared in this tumult?

Pedagogy has seen some macro level changes but not as much as expected. Some schools provide on the job experience for longer terms than summer training. This is a welcome step. The best way to learn HR is by experiencing it first and learning the theory alongside or later. Most schools are not willing to do this. As a result, most fresh graduates in HR lack basic knowledge and HR skills.

Ethics and values are the most important in HR. An HR manger is expected to promote them at the workplace. They need to set an example. For example, the most important HR values are: openness, collaboration, trust and trustworthiness, authenticity, being proactive, confrontation of issues, solving problems and experimentation. Character and integrity are implied in all of these. Respect for talent is critical. These values are not taught in schools and are also not being promoted to the extent they need to be. We have a long way to go.

How important is inculcating ethics and values in young managers today?

I consider teaching values, ethics and culture as a critical aspect of business management education. In recent years, across the world including in our country, we have seen how businesses conducted themselves without care for integrity, honesty, values and character and how this has led to the fall of leaders, managers and corporations. It is important for every student to realise the importance of values and culture in the process of learning to become a professional manager.

 

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This year we made an attempt to include this variable by asking for information on teaching of values and ethics. We are happy to find most institutions have one course or more on values and ethics. We also found a few institutions don’t have such course content. Promoting values and culture through courses is not the only way to inculcate the same. However, it is critical to bring to the notice of the students the lasting impact of values and culture on the sustainability of organisations and contribution to human welfare.

Next time, we may find a more in-depth analysis of the extent to which these are inculcated in students, in the same way that the institutional environment has been found to impact innovations in higher education. We are seriously thinking of bringing this variable in subsequent years in our rankings. We also may include the extent to which some critical methods, like case studies, simulations and rural immersion, are used in terms of enhanced marks or weightage.