10 CAREER & BUSINESS LIFE * THE ECONOMIC TIMES MUMBAI TUESDAY 18 JANUARY 2011

PAY WATCH
CRUCIAL LINK: EASING THE TRANSITION
SECTOR: CONSTRUCTION
From working on the cultural fit to working out compensation
Here’s what you wanted to know
structures and roles, HR departments can make M&As click but were afraid to ask: How much

Pump Up the big guns of India Inc take home

Employee HR Plays Key E SUDHIR REDDY

Chairman & Managing Director
IVRCL Infrastructures & Projects

` 18.2 crore
Morale
Role In Mergers
TOTAL REMUNERATION

`93.5 crore
COMPANY NET PROFIT

` 2831.5 crore
COMPANY MARKET CAP

AJIT GULABCHAND
WALKING THE Chairman & Managing Director
Hindustan Construction co
TIGHTROPE
● A ‘cultural fit’ between the
` 6.1 crore
TOTAL REMUNERATION
companies is an integral issue that
needs to be addressed. Employees ` 5.8 crore
on both sides need to be coached COMPANY NET PROFIT
on cultural norms, food habits and
even festivals and socio-economic ` 2513.9 crore
conditions of each other COMPANY MARKET CAP

COMPENSATION STRUCTURES AND ABHIJIT RAJAN

CHANGED OR NEW ROLES OF EMPLOYEES Chairman & Managing Director
HAVE TO BE WORKED OUT. THE BEST Gammon India
A RESURGENT ECONOMY AND WAR FOR
PRACTICES OF EACH COMPANY HAVE
` 1.4 crore
talent has increased attrition beyond the normal
TO BE BLENDED.
level across sectors. While instances of mass
exodus are yet to take place, HR experts say its high ! TOTAL REMUNERATION
time that bosses take note to prevent such a crisis.
Writankar Mukherjee spoke to a cross-section of ● HR must ensure ● The acquisition team ` 56.3 crore
seasoned HR professionals on how bosses can take there is no drastic has to address the COMPANY NET PROFIT
change in concerns of
guard and boost employee morale. management, employees, especially ` 1926.8 crore
which may lead to the common fears like COMPANY MARKET CAP
disaffection among ‘will I still have my
Make the office a learning ground employees and job’ or ‘what will
Research has shown people don’t change jobs just for subsequent attrition happen to me?’ RUPEN PATEL
money. It is the job profile and the ability to learn with- Managing Director
in a organisation which often becomes a deciding fac- Patel Engineering
tor. More so, in case of today’s generation of profes-

` 1.2 crore
sionals who want to learn and move up the ladder fast.
“When bosses and organisations continuously help an
employee develop their capabilities, they will not quit TOTAL REMUNERATION
as they have a sense of enrichment. Bosses should give SARFARAZ
correct feedback to employees on their performance,
help them learn on the job and build their capabilities,” Devina Sengupta both sides, the HR departments must make sitions till date — starting with Spectra-
` 193.3 crore
COMPANY NET PROFIT
says AkzoNobel India’s HR director Sangeeta Pandey. BANGALORE it clear there is no ‘loser’. If the merger is mind in 2002 and Nerve Wire in 2003 —
cross-cultural, employees need to be and the role of HR in M&A has greatly ` 1766.6 crore
Chart the employee’s growth
HR experts say employees who know in advance their
growth plan within an organisation are much more motivat-
ed. “Even though youngsters tend to change jobs every two
A CQUIRING a company is never
easy. That’s because it is never
fully possible to buy out the core
of the firm: Its people. In these days of
high attrition and a vibrant job market,
briefed on the cultural norms of the partner.
Post-acquisition, surveys need to be
conducted in the acquired company, and
training provided to staff, for them to get
a feel of their new environment. Role
evolved. “We have learnt from our earlier
mistakes,” says Bhandari. “Like the fact
that employee retention is key during an
acquisition.” In 2005, Wipro formed a
global workforce team to ensure a smooth
Source: Latest annual reports
COMPANY MARKET CAP

years, they do so for career growth. So, why not show em-
ployees their future career growth within the current organ-
isation, which highlights their potential salary and future
role?” says YV Verma, COO at LG Electronics India.
Reward and recognise
Like talent management should ideally be a year-round
phenomena for every employee-friendly company, so
should be reward and recognition. “Giving a pat at the back
at the right time is important. Such rewards or recognition
then becomes a kind of psychic income. It sends the mes-
sage that employees come before customers,” says Max In-
dia Group director (human capital) P Dwarkanath, a veter-
an HR professional.
companies involved in mergers and ac-
quisitions have to tread lightly when it
comes to employees. They have to be re-
assuring about jobs, and allay all fears
and concerns. Given this situation, HR
departments are beginning to play a
more significant role than ever before, in
integrating people during M&A.
The Igate acquisition of Patni last week is
an example. It required the integration of
25,000 people (16,000 from Patni and
9,000 from iGate). Though it was not easy
telling Patni staff their company had been
bought out, HR officials ensured they were
informed about this well ahead — even be-
changes are crucial; the sudden removal
of top management in an acquired firm
leads to instability.
For Tata Sons, which acquired Tetley,
Daewoo Motors, Natsteel and Corus,
among others, it is more about getting a
sense of the acquired company. Satish
Pradhan, chief, Group Human Resources,
says acquisitions have evolved from the
initial stage of looking at financial strate-
gy, to looking at employees and answer-
ing the question, ‘what will we look like’
and ‘do we have the right mix of people?’
transition during acquisitions, where HR
specialists looked into the ‘target’ (or ac-
quired) company’s best practices.
Bhandari says during later projects, WE’D LOVE TO HEAR FROM YOU.
they ensured an HR manager remained REACH US AT cbl@timesgroup.com
with the target firm for 3-6 months after
the acquisition, to ensure a smooth inte-
gration of policies. “In earlier acquisi-
tions, we made the mistake of trying to
do everything at once, but now we pro-
ceed step by step,” adds Bhandari. First
looking at the cultural fit, then compen-
TeamLease,

Make your company a dynamic one
The best way to boost employee morale is by constantly
evolving their role and responsibilities. HR experts say
organisations should be dynamic enough to offer that
challenge to their employees. Top performers like new
challenge and tends to get bored doing the same thing
for a long time. Godrej Consumer Products VP (HR)
Rahul Gama admits it is like walking on a tight rope
when it comes to balancing a person’s tenure in a role
and ensure he does not quit for delay in upward move-
ment. “Rotation of professionals in different roles is a
must to ensure equitable growth of the organisation and
individual,” says Gama. Godrej tends to rotate an em-
ployee’s role every three years.
Identify the employee’s sweet spot
HR experts say bosses should identify an employee’s
sweet spot, be it job security, faster growth, desire to
work out of a particular location, or be part of a new
business, and try to nurture it. “People work for them-
selves and not for an employer. Each boss should know
the eco-system of an employee well enough. And then
give him the ability to perform, which if he lives up to
then compensate him adequately and nurture his emo-
tional and sentimental well-being. These should be the
responsibility of all bosses,” says Ajit Isaac, HR analyst
and MD at Ikya Human Capital Solutions.
fore the external stakeholders. Within min-
utes of the announcement, employees re-
ceived mails from the CEO, Powerpoint
presentations explaining the benefits of the
deal, and timelines for various activities.
Discussion forums, Town Hall meetings and
teleconferences were set up.
“These will continue so that employees
in all geographical locations can get their
doubts cleared,” says Sunil Chitale, chief
strategy and marketing officer at Patni.
Even queries posted online anonymous-
ly, will be answered. The two companies
will continue with their independent HR
policies till they can figure out integration.
In fact, Phaneesh Murthy, CEO of iGate,
assured that retention packages would be
rolled out to select employees soon.
“The success and failure [of an M&A]
hinges on HR activities,” says A Sudhakar,
executive director (HR) for Dabur. People
integration is a complex issue. For most HR
personnel, work begins before the actual
M&A, when a company is scouting for a
prospective. A cultural fit is key; if not ad-
dressed, this could lead to high attrition lat-
er. Working out compensation structures
and roles, and the swapping of best prac-
tices, follows. Sensitising employees on
TAKEOVER SALVE
Post-acquisition, surveys need
to be conducted in the acquired
company, and training provided to
staff to adjust to the new situation.
Role changes are crucial too
A September 2010 study by Mercer, en-
titled ‘Asia on the Byside’, of 155 senior ex-
ecutives from Asia-based MNCs involved
in cross-border acquisitions, showed that
35% of respondents identified ‘human
capital integration’ as the most significant
issue during an M&A. Only 23% identified
‘financial reporting integration’ as signifi-
cant, while 16% said ‘lack of employee en-
gagement’ and ‘leadership/management
retention issues’ were uppermost for them.
Len Gray, Asia Pacific business leader of the
M&A business at Mercer, says: “This has
meant that the HR function has an increas-
ingly important role to play, even during
the due diligence stage of an M&A, to be
able to assess the cultural fit of the transac-
tion, particularly where the objective is
complete integration of the acquired or
merged entity.”
Wipro Technologies has made 21 acqui-
sation details and, finally, implementa-
tion of processes. At Wipro, employees of
the acquired company have to go
through assessment tests every few
months, to ensure they understand the
parent company and its culture better.
When FMCG major Dabur acquired
Balsara in 2005, Sudhakar says he
“stopped recruitment at Dabur a few
months before the acquisition” so that the
575 Balsara employees could be accom-
modated. Dabur’s acquisition of Fem
brought a different set of learnings. The
company had a sales team which needed
to be incorporated into Dabur without be-
ing integrated, since that would lead to a
loss of jobs. “We had learnt this from the
Balsara acquisition,” says Sudhakar. While
Dabur faced 20% attrition post the Balsara
deal, the attrition rate after Fem was 0.
Cultural integration is a concern even
with smaller companies. When telecom
manufacturing company Tejas Networks
acquired Israel-based Ethos Networks,
“we got the Israeli side to travel to India,
and explained to both sides the impor-
tance of the acquisition,” says Arnob Roy,
president (engineering) at Tejas. Joint
projects and technology became binding
factors for employees, who were encour-
aged to speak to each other over phone,
rather then email.
Gujarat ink
MoU for varsity
Our Bureau
BANGALORE
STAFFING firm TeamLease Services on Monday signed
a Memorandum of Understanding (MoU) with the Gu-
jarat government to set up a vocational education uni-
versity in the state. Around 22 community colleges
would be rolled out by 2014, under this project.
To be built in phases, the university will offer two-
year associate degree programmes in alliance with pos-
sible employers. The programmes are targeted at those
who want more than a diploma course, but cannot af-
ford a traditional college degree. With a total invest-
ment of Rs 30 crore, most of the learning will be via
satellite. Colleges in the more remote areas will have
between five and 19 class rooms, minimising cost on in-
frastructure. The first phase will see the setting up of 10
colleges over the following 18 months.
The community college model has been borrowed
from the US, where not many can afford traditional de-
grees, TeamLease chairman Manish Sabharwal said on
Monday. The institute’s tie-ups with companies will of-
fer apprenticeships and jobs to vocationally-trained stu-
dents once they graduate. TeamLease has 1,400 clients,
including Reliance, Oracle, Bharti, SAP among others,
and they could all be potential employers. Sabharwal
says Karnataka and Maharashtra are next on the anvil
for a similar project.
Education sector specialist and partner at Ernst

Ethical culture can prevent frauds

&Young Amitabh Jhingan said: “The success depends on
the acceptance these courses have in the industry and in
other colleges.” It remains to be seen if companies will
pay more for vocationally-trained people than freshers.
The project will also target those who want to be

A CURSORY glance at most of

the corporate frauds that
have swept through the
world over the past two years
makes it amply clear that almost
all the frauds are perpetrated by
rogue employees and not
professional fraudsters. Even the
latest Citibank scam proves this
hypothesis. Shivraj Puri was an in-
sider at Citibank, so was Sanjay
Gupta at the Hero Group.
Why do employees commit
frauds? Is it an overpowering
greed for material gains or is it just
the thrill of beating the system? A
feeling of fulfillment leading to a
desire to prove that one is smarter
than the system in place? Whatev-
er it might be, one thing is clear.
Employees commit frauds because
they feel the process is weak and
can be beaten and more
importantly, they feel that once
they beat the process, they will be
able to get away with it easily
because detection is next to
impossible. Otherwise, what
would explain Shivraj Puri’s
massive gamble of Rs 400 crore?
Is having a strong process
control the only solution to
employee frauds? “It’s a fact that if
a determined insider wants to beat
a process, he will be able to.
Despite all the controls, checks
and balances, the hiring process,
you will still have someone sneak-
ing into your system who will try
to exploit the weaknesses for
personal gains,” says Rahul
Mokashi, a senior manager with a
BPO who deals with instances of
employee indiscretions day in and
day out. If what Rahul says is
correct, then how do
organisations protect themselves?
Prevention of fraud is more
about creating a culture, which
promotes ethical and moral behav-
iour. “Every organisation has its
black swan event! You might delay
it but can’t avoid it. The question
is, how do you deal with it,” says
Rakesh Parekh, a banker, in a
Facebook comment on my profile.
How you deal with such instances
sets the tone for conduct of
employees in the future. A weak or
slow response that allows the
culprits to get away scot-free, will
only make it worse for the
organisation. On the other hand,
getting a reputation as a strong,
no-nonsense employer will deter
people from committing frauds.
Organisations need only do a
few basic things to make sure they
do not get perceived as weaklings
in their response to frauds or even
attempts to defraud. “A zero
tolerance to frauds irrespective of
the stature, seniority or
performance quotient of the
employee must be a no-
compromise item,” says Mokashi.
Training employees to be vigilant
about what goes around them in
the workplace is another aspect,
which often gets neglected. This
coupled with an effective whistle
blower mechanism is an effective
combat mechanism. How an organ-
isation responds to a breach builds
credibility and culture. A hotline
where people can call in and an
email id where people can mail in
their concerns and suspicions is a
must. “Many organisations have a
rained in specific skill sets to secure a seat in a degree
college. The Gujrat state government has agreed to take
up the discussion of letting TeamLease University grant
degree certificates in their Assembly. Sabharwal said
this should happen in the next 3-6 months time. A uni-
policy of not responding to versity can only give degrees once the state government
anonymous emails. This may not be sanctions it after discussing in the state assembly. Team-
the best thing to do. Anonymous Lease in the meantime will go ahead with the infra-
emails at times, may give you structural works.
enough to raise your antennae and Once we get the nod for degrees this would mean
start snooping around. that one can complete one’s vocational training course
Just as in housing societies, resi- with us, and go back to completing their college degree,
dents’ associations have worked instead of having to start a new course again,” Sabhar-
better and are more effective at wal said.
maintaining harmony, law and or- Hasmukh Adhia, principal secretary for Education
der, as compared to the police, in with the government of Gujarat said, in a statement,
organisations too, employees’ vig- that “youth unemployability is a bigger problem than
ilance can prevent large-scale youth unemployment” in the state. Initially, the voca-
frauds and process breaches. tional training university would focus on courses like
If you have to prevent another accounting, IT-infrastructure management, mechanical
Shivraj Puri from happening in engineering and electronics (called mechatronics), be-
other organisations, empower, fore branching out into other things later.
skill, rely on and facilitate your em- TeamLease will also convert its 225 vocational train-
ployees to build a culture of high ing courses into community college module, though the
integrity and professional conduct. timeline for this has not been decided yet. Qualifica-
Ravi subramanian tions for enrolling in any of the community colleges in-
Banker & author of cludes a Class X or XII certificate, and the fees will be
‘Devil in Pinstripes’ anywhere between Rs 15,000 and Rs 45,000 annually.