With over 40 years of extensive work in the field of Human Resource Development, TV Rao is popularly known as the "Father of HRD in India". Currently an Adjunct Professor at IIM Ahmedabad, Rao worked for over 20 years as a professor at IIM Ahmedabad, beginning 1973, before he founded his own HR consulting firm, TVR Learning Systems. Rao, who has authored over 50 books on HR management, recently spoke to BLonCampus. Excerpts :
How HR has changed over the years in India?
HR has changed in some ways, though it has stayed the same in many others. One important change is that conviction about the importance of people has gone up. HR is now focusing sharply on talent. In the earlier days, the focus was on how to create an environment in the organisation so that people can enjoy the work they are doing.
That concern still remains but it has shifted to not only enjoying the work but also contributing to the work-place. And contribution comes through talent.
A performance appraisal is a classic case — for 40 years we have talked about appraisal, we don't talk about it anymore. The term is misleading now, and has evolved to become performance management, which means planning of time, and talent. You communicate with your juniors, seniors and co-workers, identify talent gaps and fill those gaps. It is a remarkable change.
I will give you an example about appraisal-led inefficiency. An employee complained that he works hard throughout the year to excel in his job but during appraisals his performance is marked as average. About 80 per cent of the employees receive the same feedback in his company. As he points out, “if most of the people are average performers in my company, how come the company is doing exceedingly well?”
The situation arises due to excessive use of normal curve within the organisation. Such ‘force-fitting’ (of employees into a normal curve) is not necessary. This is changing now.
At the same time, not much has changed. There are companies that are still struggling with the normal curve and want to force-fit a majority of the work-force into that curve. These companies won’t allow many employees to become outstanding performers, as they don’t want to loosen their purse strings.
How has people’s mindset towards HR changed?
The mindset of people from the older generation has not changed, though that of the younger generation has. HR nowadays is increasingly about employee engagement, talent discovery and talent retention. Shifting jobs is not considered bad these days, it is a measure of how much you are able to use your talent.
The most significant change today is Gen Y, the millennial work-force is totally different. Old HR practices, such as pension, provident fund, etc. don't hold value today. Today, people want ‘cash in hand’. If they don't enjoy the job, they quit, so movability has gone up. Today, the focus is on talent management.
There have been tools like 360-Degree Feedback or Balance Scorecard to measure the company or individual performance. Are these being used effectively? What could be the next big thing in HR?
I don't think 360-Degree Feedback is utilised the way it should be. Many people use the tool unscrupulously for control purposes. I think it’s a tool for leadership development, self-reflection, and review. Its failure is because it has not utilised the reflection and review for growth on the part of senior executives.
I am not sure of assessment centres either; we have not yet evolved the technology that can really assess the potential of people. Unfortunately, not much research is happening on assessment centres.
I have written a book called Workonomics, which is human resource economics. The most important thing, as mentioned in the book, is recognising time and talent. Recognition of the linkage between time and talent utilisation is going to be the next big thing.
Also, employee engagement is not only the job of organisations. Engaging is in your own interest, so I recommend that every employee should take charge of his or her engagement. In other words, HR people should be improving the understanding of engagement within the organisation, so that the focus of HR shifts from just one department to every employee.
You said HR is intangible, but if a function's existence becomes intangible in a revenue-driven organisation, won't that jeopardise the future of HR as a function?
There is always a balance. No company ever forgets about its finances. But they have to realise it is not just the quarterly profits or targets that need to be achieved. A brand image is also important and needs to be built.
Many companies need to discover market capitalisation, which is as important as annual profits.
A company's profits may not be as high as its market capitalisation, which is built over time through the integrity of people within the company, dynamism of the CEO, loyal customers, quality of the product, and company culture. HR's job is to make people more reliable and talented, and to encourage them to take the initiative and become creative. All these things are intangible but will reflect, in the long term, as market capitalisation.
Such a focus is difficult. Not many CEOs treat HR managers as contributors to intellectual capital. That's where companies are struggling.