For a manager, firing an employee is never an easy task. It is an emotionally draining activity. In India losing a job has emotional connotations far beyond the financial implications. Losing a job could be a result of broad layoffs, a result of poor performance or a result of career stagnation. The last one is the toughest for a person to handle.
One could lose a job as a result of the entire group getting retrenched. This is witnessed during the economic downturn when the company takes such actions to keep its financial scorecard healthy. In such a case the employee becomes a victim for no fault of his. He could draw solace from the fact that he is not alone. When the job market improves he is sure to find another job.
One could lose a job as a result of bad performance. In this case the employee is not caught unawares. Typically an organization as part of the performance appraisal system would have given the feedback of poor performance to the employee. Most often the managers are reluctant to let go the lowest performer unless that employee exhibits serious attitude issues that could impact the team. While this may seem humane, in reality the manager’s inaction negatively affects the employee. Being at the bottom of the organization the employee’s compensation is affected year on year. Letting him go may benefit him. He may be able to find a better paying job where his skills are more valuable than in the current organization. But before letting him go, the employee should be given feedback for improvement. Good organizations does this well. They also put the employee through “Performance Improvement Program” to give him a choice to improve. Despite all these actions if the employee’s performance does not improve, the organization may have to let go the person. The employee is mentally prepared as he has been given due feedback and an opportunity to improve.
The third case when one could lose the job is when the person adds less value to the organization compared to his experience. He may not be a poor performer. Typically this case occurs at senior levels. The person through his past experience and accomplishments would have grown to be a middle level manager. In this process he may have gone away from being “hands-on” employee. If this person does not have the right leadership skill to grow further, he gets stuck at the middle level managerial position. Over time the junior employees develop skills and are better in their accomplishment s than this person. Neither growing as a leader nor being as technical/handson as the juniors this person gets stuck. The risk of losing the job for this person is low if he is part of a big organization. However for smaller organization he becomes an overhead. Sooner than later this person comes into the radar screen of the management. His tenure in the organization depends on the results of the organization and the relationship this person has with the management. If the management is fair, then it would help find a suitable role for him in other organization that values his skill. If it cannot find such a role then it would give sufficient time and even a voluntary retirement package for the person to find a job elsewhere. However at such high experience level without good leadership skills it will be difficult to find a suitable job elsewhere.
To keep the job, one has to constantly improve their performance at work and develop the leadership skills.
Happy Reading,
Ram
Sunday, October 24, 2010
Sunday, October 17, 2010
Trust
Trust takes months or years to build, but can be destroyed in an instant. Trust among the members of the team, between the team members and their manager is very critical for the success of the organization. For successful execution of projects in an organization, emphasis is laid on the tangible metrics like on-time schedule, quality and process compliance. But without a high level of trust in the team - the intangible metric, the organization can fall short of meeting the above mentioned tangible metrics.
When you trust someone – whether it’s your boss, a co-worker – life feels good. When trust levels are high, you feel relaxed and accepted; you can be yourself. When trust levels are low, you feel uncomfortable and on the defensive; you can’t be yourself. Co-workers with high levels of trust enjoy working and tend to be more productive. Lack of trust can cause people to feel angry, hurt, or disappointed with each another. Teams with low levels of trust have trouble working together and reaching agreements.
Lack of trust in the team is like a speed-breaker. It is a counter-productive force that slows down the progress of the team. Being intangible in nature it is not a visible force. When the trust in the team goes missing, the common purpose of the organization is lost. People compete and argue and fail to reach a consensus thereby slowing down the progress. Every decision made gets questioned. The management has to spend more time to convince the team on the decisions it made.Instead of cooperating and collectively addressing the challenges of the projects, the lack of trust causes the organization to spend more time “inward looking” to get the team aligned on the common purpose.
Lack of trust also makes people reactive. Instead of taking proactive measures to help the progress of the project, people wait to be told. People may not come forward and help others in the team. They may not pour their hearts into meeting the objectives of the team. Lack of trust goes beyond the realms of project execution. Left unaddressed, it can become the cause of attrition.
In the book “Speed of Trust” Steven M.R Covey talks about the economics of trust. When the trust goes down, speed will also go down and costs will go up. He gives an example of how peoples' trust in flying within the US went down dramatically after the 9/11 terrorist attacks. The robust procedures and system put in place after 9/11, increased safety and trust in flying. But it required the passengers to arrive two to three hours before an international flight. They also had to pay a new 9/11 security tax with every ticket. So, as trust went down, speed also went down and cost went up.
Our first urge when trust breaks down is not to trust the other person again – to “write the person off”. However this is counter-productive and exactly what you shouldn’t do, especially if the relationship is important to you. When trust breaks down, it is important to repair it and that requires three things:
• A willingness and desire to get beyond the problem, breakdown, or misunderstanding.
• A willingness to talk with the other person to resolve the problem
• A willingness to look inside yourself and take responsibility for your past and future actions.
There are many things we can do to build trust. When someone confides in you or shares personal information, keep it confidential. Keep your promises and follow through with commitments. To build trusting relationships,learn to forgive others and move on. Try to let go of old arguments, resentments and issues from the past. Realise that trust is up to you. You are responsible for how much – or how little – people trust you. Build credibility by committing to being truthful and by admitting when you are wrong. Communicate openly and honestly. Talk with the person whom you let down. Don’t wait. The longer you wait to talk about a problem, the bigger the misunderstanding becomes. Don’t be afraid to apologise. Remember, trust takes months or years to build, but can be destroyed in an instant.
“Trust is the highest form of human motivation. It brings out the very best in people” - Steven R Covey
Happy Reading,
Ram
p.s A short book on “Building Trust” brought out by Ceridian delves into all aspects of trust – why it is important, what happens when trust breaks down and how to build trust. This blog uses parts of the book.
When you trust someone – whether it’s your boss, a co-worker – life feels good. When trust levels are high, you feel relaxed and accepted; you can be yourself. When trust levels are low, you feel uncomfortable and on the defensive; you can’t be yourself. Co-workers with high levels of trust enjoy working and tend to be more productive. Lack of trust can cause people to feel angry, hurt, or disappointed with each another. Teams with low levels of trust have trouble working together and reaching agreements.
Lack of trust in the team is like a speed-breaker. It is a counter-productive force that slows down the progress of the team. Being intangible in nature it is not a visible force. When the trust in the team goes missing, the common purpose of the organization is lost. People compete and argue and fail to reach a consensus thereby slowing down the progress. Every decision made gets questioned. The management has to spend more time to convince the team on the decisions it made.Instead of cooperating and collectively addressing the challenges of the projects, the lack of trust causes the organization to spend more time “inward looking” to get the team aligned on the common purpose.
Lack of trust also makes people reactive. Instead of taking proactive measures to help the progress of the project, people wait to be told. People may not come forward and help others in the team. They may not pour their hearts into meeting the objectives of the team. Lack of trust goes beyond the realms of project execution. Left unaddressed, it can become the cause of attrition.
In the book “Speed of Trust” Steven M.R Covey talks about the economics of trust. When the trust goes down, speed will also go down and costs will go up. He gives an example of how peoples' trust in flying within the US went down dramatically after the 9/11 terrorist attacks. The robust procedures and system put in place after 9/11, increased safety and trust in flying. But it required the passengers to arrive two to three hours before an international flight. They also had to pay a new 9/11 security tax with every ticket. So, as trust went down, speed also went down and cost went up.
Our first urge when trust breaks down is not to trust the other person again – to “write the person off”. However this is counter-productive and exactly what you shouldn’t do, especially if the relationship is important to you. When trust breaks down, it is important to repair it and that requires three things:
• A willingness and desire to get beyond the problem, breakdown, or misunderstanding.
• A willingness to talk with the other person to resolve the problem
• A willingness to look inside yourself and take responsibility for your past and future actions.
There are many things we can do to build trust. When someone confides in you or shares personal information, keep it confidential. Keep your promises and follow through with commitments. To build trusting relationships,learn to forgive others and move on. Try to let go of old arguments, resentments and issues from the past. Realise that trust is up to you. You are responsible for how much – or how little – people trust you. Build credibility by committing to being truthful and by admitting when you are wrong. Communicate openly and honestly. Talk with the person whom you let down. Don’t wait. The longer you wait to talk about a problem, the bigger the misunderstanding becomes. Don’t be afraid to apologise. Remember, trust takes months or years to build, but can be destroyed in an instant.
“Trust is the highest form of human motivation. It brings out the very best in people” - Steven R Covey
Happy Reading,
Ram
p.s A short book on “Building Trust” brought out by Ceridian delves into all aspects of trust – why it is important, what happens when trust breaks down and how to build trust. This blog uses parts of the book.
Sunday, June 27, 2010
Micro Management
The team is facing an issue. The members are not taking any proactive measures to address it. The manager suggests actions and asks the team member to act on it. Is the manager micro-managing? The team plans the project, taking into account the realistic scenarios. The team still fails to meet their milestones. The manager, during the status meeting, asks the team the reasons for the slip. He gets into the root cause of the slip. Is the manager micro-managing? Scenarios like these set me thinking – Is it wrong for the manager to “micro manage”, when the team is not meeting the expectation?
Merriam-Webster's Online Dictionary defines micromanagement as "manage[ment] especially with excessive control or attention to details". The two phrases “excessive control” and “attention to details” requires elaboration.
If the manager wants to exercise more control, even when his leaders are meeting or exceeding the expectation of their jobs, then yes - the manager is culpable of micro-managing. A manager is said to be micro-managing: when he does not allow his leaders to do their job because he feels it is more efficient for him to do it; when he does not allow the team members to learn from their mistakes; when he gets irritated if the team member makes decisions without consulting him; when he does not allow them to take initiative; etc.,
However, if the leaders do not meet the expectation, asking them to act on issues is not micro-management. If deadlines are missed, a manager needs to be more involved in the details and help solve the problem. If a project is not going as planned, a manager needs the details in order to develop contingency plans. If a team member is not willing to perform, a manager needs to monitor their performance closely in order to motivate or discipline them accordingly. If a manager has to report on progress, he needs a detailed understanding of the processes and procedures of the organisation. In all these cases the actions of a manager cannot be termed as micro-management. Sometimes these managerial responsibilities can appear intrusive or controlling to staff – particularly to those who are under-performing and require more supervision. It is only when a manager’s oversight or input is excessive or unnecessary that he/she can be reasonably termed a “micromanager”.
The second part of the definition of micromanagement talks about “attention to details”.The word micro is broadly synonymous to the details. A manager is not expected to get into the details of the day to day activities of his team members. His leaders are expected to work with the team members on the details. If this does not give the expected results, then instead of getting to the micro details, he should put a framework in place that addresses this issue. If he observes lack of details in the management of the projects, then he should work with his leaders and develop a framework that highlights critical milestones. Tracking these milestones gives the necessary details without the need for micromanagement.
To avoid micro management, develop leaders who are proactive and accountable. Empower them. Set clear expectations for leaders and ensure that they do the same for their reportees. Hold everyone accountable for their results. Develop the culture of pro-activeness in the organization. Develop trust with the leaders. This will go a long way to ensure manager does not need to micromanage.
Merriam-Webster's Online Dictionary defines micromanagement as "manage[ment] especially with excessive control or attention to details". The two phrases “excessive control” and “attention to details” requires elaboration.
If the manager wants to exercise more control, even when his leaders are meeting or exceeding the expectation of their jobs, then yes - the manager is culpable of micro-managing. A manager is said to be micro-managing: when he does not allow his leaders to do their job because he feels it is more efficient for him to do it; when he does not allow the team members to learn from their mistakes; when he gets irritated if the team member makes decisions without consulting him; when he does not allow them to take initiative; etc.,
However, if the leaders do not meet the expectation, asking them to act on issues is not micro-management. If deadlines are missed, a manager needs to be more involved in the details and help solve the problem. If a project is not going as planned, a manager needs the details in order to develop contingency plans. If a team member is not willing to perform, a manager needs to monitor their performance closely in order to motivate or discipline them accordingly. If a manager has to report on progress, he needs a detailed understanding of the processes and procedures of the organisation. In all these cases the actions of a manager cannot be termed as micro-management. Sometimes these managerial responsibilities can appear intrusive or controlling to staff – particularly to those who are under-performing and require more supervision. It is only when a manager’s oversight or input is excessive or unnecessary that he/she can be reasonably termed a “micromanager”.
The second part of the definition of micromanagement talks about “attention to details”.The word micro is broadly synonymous to the details. A manager is not expected to get into the details of the day to day activities of his team members. His leaders are expected to work with the team members on the details. If this does not give the expected results, then instead of getting to the micro details, he should put a framework in place that addresses this issue. If he observes lack of details in the management of the projects, then he should work with his leaders and develop a framework that highlights critical milestones. Tracking these milestones gives the necessary details without the need for micromanagement.
To avoid micro management, develop leaders who are proactive and accountable. Empower them. Set clear expectations for leaders and ensure that they do the same for their reportees. Hold everyone accountable for their results. Develop the culture of pro-activeness in the organization. Develop trust with the leaders. This will go a long way to ensure manager does not need to micromanage.
Sunday, June 20, 2010
Poorly Made in China
This blog is an excerpt from the book “Poorly Made in China” by Paul Midler. It reveals business and cultural challenges, and exposes the dangerous cat- and-mouse games that take place between Chinese companies and their foreign counterparts.
Chinese manufacturers are aggressive and desperate for business. When importers visited the factory, the manufacturers went to great extents to impress them. Even if they did not have a working product line, they created a mock product line to give importers confidence that they could get their products manufactured by them.
Manufacturers bent over backwards, if only to make it seem, as though doing business with them would be a breeze. For many new to export manufacturing, the factory owner doubled as teacher. Beyond cheap labour, speed and convenience (which are hallmark of Chinese manufacturers), everything about China was setup to get customers in through the door. The importers were treated like kings. While these manufacturing relationships tended to become only more difficult over time, the beginning was almost always promising.
China attempted to appeal more easily to Westerners and also appear more up to date. Factory owners dressed like their foreign business partners and they took English names for themselves. Despite China’s insistence on having a unique culture that stretches for millennia, there is no other country in the world whose citizens have given themselves alternate English names, in such numbers and with so much enthusiasm.
It was too expensive to make a product line before an order actually came in. Manufacturers all suffered from this chicken-and-egg problem: to kick-start their businesses, they had to fool customers into thinking that product samples were already in motion. The easiest way to accomplish this was by throwing samples – anyone’s samples – into a showroom. The Chinese made plenty of counterfeit products, and so it was no great surprise that they also faked entire showrooms. Placing an initial order in China was easy anyway – all that was needed was a sample. They could take any product and move it quickly into production. They also showed incredible willingness and enthusiasm to get a relationship started. Copying was rampant in China and made the manufacturers behave in strange ways. Each manufacturer tried to protect the designs, but there would be spies from other companies, so it was not uncommon to see the same designs being made by multiple manufacturers. To respect the client who gave the design, the manufacturer was cautious enough not to sell the same product to other clients from the same geography. But that did not stop them from selling it to clients in other geographies. Some Chinese manufacturers setup an address in the United States and pretended they were a buyer. They then contacted competitors and requested product samples. They were then shipped back to China and placed in a showroom. Ingenuity at its best …
Once they received orders, Chinese factories often engaged in quality fade – the incremental degradation of a product over time. They quietly reduced the amount of materials or else manipulated the quality of raw inputs. The changes were gradual, almost imperceptible. The importer was neither asked for permission nor told. Quality fade was an economic decision that manufacturers in China made. If the shipment was rejected by the importer then they found agents to sell them in the other growing export markets or even in the domestic market. This was one of the reasons for a rise in the quality problems. Factories did not see an attention to quality as something that would improve their business prospects, but merely as a barrier to increased profitability. Importers learnt quickly that improved quality raised their costs. Manufacturers rarely settled for any loss due to these defects. Importers were not inclined to pursue legal action and they did want to put an entire business on hold, just to settle the matter of a few containers. Manufacturing problems tended to be small, relative to the size of the overall business. Factory owners actually took this into account when they considered whether or not to manipulate the quality levels. Manufacturers sometimes offered discount on future orders as compensation for defective parts. The only way to recoup losses created by a factory was to reward them with more orders.
Besides engaging in quality fade to increase the profit margins, the manufacturer also resorted to short term price increase that caught the importers by surprise.The manufacturer would increase the price at the last moment, well after the orders were confirmed. Chinese are good in negotiation despite the language barriers. They relied more on emotion and on their instincts. They made the customer believe that progress was being made in the negotiation, and then at the critical point in the talks, they took the entire deal off the table. These manufacturers went out of their way to make the importer lose his cool. As cash flows for the importers were tight, they preferred to get some revenue, rather than lose business. They yielded to the price increase.
Chinese manufacturers understood the benefits of offering enticements to get a business relationship going, but after some interval, the factory jeopardized goodwill in order to fund its returns. Supplier relationships were almost never better than they were at the beginning. The importers were left with no choice. They could not change the supplier because of the time it would take to get an alternate supplier up to speed. Even if this was possible, the new supplier might be just as bad as the current one.
Be wary. Going to China for low cost need not always end up being low cost. Add to that the woes of quality problems. Look before you (Leap) Invest.
Happy Reading,
Ram
Chinese manufacturers are aggressive and desperate for business. When importers visited the factory, the manufacturers went to great extents to impress them. Even if they did not have a working product line, they created a mock product line to give importers confidence that they could get their products manufactured by them.
Manufacturers bent over backwards, if only to make it seem, as though doing business with them would be a breeze. For many new to export manufacturing, the factory owner doubled as teacher. Beyond cheap labour, speed and convenience (which are hallmark of Chinese manufacturers), everything about China was setup to get customers in through the door. The importers were treated like kings. While these manufacturing relationships tended to become only more difficult over time, the beginning was almost always promising.
China attempted to appeal more easily to Westerners and also appear more up to date. Factory owners dressed like their foreign business partners and they took English names for themselves. Despite China’s insistence on having a unique culture that stretches for millennia, there is no other country in the world whose citizens have given themselves alternate English names, in such numbers and with so much enthusiasm.
It was too expensive to make a product line before an order actually came in. Manufacturers all suffered from this chicken-and-egg problem: to kick-start their businesses, they had to fool customers into thinking that product samples were already in motion. The easiest way to accomplish this was by throwing samples – anyone’s samples – into a showroom. The Chinese made plenty of counterfeit products, and so it was no great surprise that they also faked entire showrooms. Placing an initial order in China was easy anyway – all that was needed was a sample. They could take any product and move it quickly into production. They also showed incredible willingness and enthusiasm to get a relationship started. Copying was rampant in China and made the manufacturers behave in strange ways. Each manufacturer tried to protect the designs, but there would be spies from other companies, so it was not uncommon to see the same designs being made by multiple manufacturers. To respect the client who gave the design, the manufacturer was cautious enough not to sell the same product to other clients from the same geography. But that did not stop them from selling it to clients in other geographies. Some Chinese manufacturers setup an address in the United States and pretended they were a buyer. They then contacted competitors and requested product samples. They were then shipped back to China and placed in a showroom. Ingenuity at its best …
Once they received orders, Chinese factories often engaged in quality fade – the incremental degradation of a product over time. They quietly reduced the amount of materials or else manipulated the quality of raw inputs. The changes were gradual, almost imperceptible. The importer was neither asked for permission nor told. Quality fade was an economic decision that manufacturers in China made. If the shipment was rejected by the importer then they found agents to sell them in the other growing export markets or even in the domestic market. This was one of the reasons for a rise in the quality problems. Factories did not see an attention to quality as something that would improve their business prospects, but merely as a barrier to increased profitability. Importers learnt quickly that improved quality raised their costs. Manufacturers rarely settled for any loss due to these defects. Importers were not inclined to pursue legal action and they did want to put an entire business on hold, just to settle the matter of a few containers. Manufacturing problems tended to be small, relative to the size of the overall business. Factory owners actually took this into account when they considered whether or not to manipulate the quality levels. Manufacturers sometimes offered discount on future orders as compensation for defective parts. The only way to recoup losses created by a factory was to reward them with more orders.
Besides engaging in quality fade to increase the profit margins, the manufacturer also resorted to short term price increase that caught the importers by surprise.The manufacturer would increase the price at the last moment, well after the orders were confirmed. Chinese are good in negotiation despite the language barriers. They relied more on emotion and on their instincts. They made the customer believe that progress was being made in the negotiation, and then at the critical point in the talks, they took the entire deal off the table. These manufacturers went out of their way to make the importer lose his cool. As cash flows for the importers were tight, they preferred to get some revenue, rather than lose business. They yielded to the price increase.
Chinese manufacturers understood the benefits of offering enticements to get a business relationship going, but after some interval, the factory jeopardized goodwill in order to fund its returns. Supplier relationships were almost never better than they were at the beginning. The importers were left with no choice. They could not change the supplier because of the time it would take to get an alternate supplier up to speed. Even if this was possible, the new supplier might be just as bad as the current one.
Be wary. Going to China for low cost need not always end up being low cost. Add to that the woes of quality problems. Look before you (Leap) Invest.
Happy Reading,
Ram
Sunday, May 30, 2010
To Cheat, or Not to Cheat
It is a month since I last wrote a blog. Just to ensure that I retain the habit of writing blogs, I fall back on my favourite book “Predictably Irrational” by Dan Ariely. In this blog, I summarise two chapters of this book written on “character” – it explores the circumstances when honest people cheat and how non-monetary exchanges increase the chances of cheating.
In 2004, the total cost of all robberies in the United States was $525 million. Compare that to the $600 billion that is lost because of employee’s theft and fraud at the work place. The retail industry loses $16 billion a year to customers who buy clothes, wear them with the tags tucked in, and return these secondhand clothes for a full refund. India hasn’t faced this problem yet - Thanks to the punch line “Goods once sold will not be taken back”
In this blog, we are not talking about crooks who are dishonest thieves but about people who generally consider themselves honest.
To see how much an honest person would cheat, a controlled experiment was conducted at the Harvard School of Business. Students were given 50 multiple choice questions to answer in 15 minutes. At the end of that time, they would be asked to transfer their answers from their worksheet to a scoring sheet. For each correct answer the students would receive 10 cents. In the second setup, a new group of students take the same test, but they were asked to transfer their answers to the score sheet that already has correct answers pre-marked. They would count how many questions they had answered correctly and write it at the top of the scoring sheet. The third group was asked to shred their worksheet and handover only the scoring sheet. As you see with every experiment the scope for cheating increased. The first group scored 32.6, but the second and third group scored 36.1. It was found that the increase in the score was mainly due to cheating. When given an opportunity, many honest people will cheat but not wildly. In another twist to the experiment, the fourth group was asked to write the Ten Commandments before taking the test. Surprisingly, this group, though having a similar scope for cheating like the third group, did not score as much as the third group. Writing the Ten Commandments before taking the test had an effect on their integrity and so they did not cheat.
Similar experiments were conducted in MIT but with a difference. Instead of giving cash, the students were given non-monetary tokens that could be encashed later. The results were very surprising. The third group cheated a whole lot more - as much as twice the first group. So when the cash was replaced with tokens the amount of cheating increased dramatically. In another experiment conducted in the MIT dormitories, a six-pack of Coke cans was left in the communal fridge. Within 3 days all the cans were gone. However when 6 one dollar bills were left in the fridge it remained untouched for more than 3 days. This means that not only did the non-monetary tokens “release” people from some of their moral constraints, but for quite a few of them, the extent of the release was so complete that they cheated as much as possible.
A person may not feel dishonest or guilty, taking a pen from office supplies or using photocopiers for personal use. But he would not take any cash that he finds in the office cupboard. When we deal with money, we are primed to think about actions as if we had just signed an honor code. But look at the latitude we have with non-monetary exchanges. When we look around us, much of the dishonesty we see involves cheating that is one step removed from cash. Companies cheat with their accounting practices; executives cheat by using backdated stock options; individuals exaggerate the cost of the television on their property loss report, or employees falsely report a meal as a business meal.
How can we fix this? We could label each item in the supply cabinet with a price (for instance) or use wording to explain stocks and stock options clearly in terms of their monetary value. However, in the larger context, we need to wake up to the connection between non-monetary currency and our tendency to cheat. Develop and maintain high level of integrity by doing daily prayers and reading spiritual and moral books. Let not even an iota of dishonest thought come to your mind. By assigning currency values to the non-monetary objects, make sure it influences you to not cheat.
Happy Reading,
Ram
In 2004, the total cost of all robberies in the United States was $525 million. Compare that to the $600 billion that is lost because of employee’s theft and fraud at the work place. The retail industry loses $16 billion a year to customers who buy clothes, wear them with the tags tucked in, and return these secondhand clothes for a full refund. India hasn’t faced this problem yet - Thanks to the punch line “Goods once sold will not be taken back”
In this blog, we are not talking about crooks who are dishonest thieves but about people who generally consider themselves honest.
To see how much an honest person would cheat, a controlled experiment was conducted at the Harvard School of Business. Students were given 50 multiple choice questions to answer in 15 minutes. At the end of that time, they would be asked to transfer their answers from their worksheet to a scoring sheet. For each correct answer the students would receive 10 cents. In the second setup, a new group of students take the same test, but they were asked to transfer their answers to the score sheet that already has correct answers pre-marked. They would count how many questions they had answered correctly and write it at the top of the scoring sheet. The third group was asked to shred their worksheet and handover only the scoring sheet. As you see with every experiment the scope for cheating increased. The first group scored 32.6, but the second and third group scored 36.1. It was found that the increase in the score was mainly due to cheating. When given an opportunity, many honest people will cheat but not wildly. In another twist to the experiment, the fourth group was asked to write the Ten Commandments before taking the test. Surprisingly, this group, though having a similar scope for cheating like the third group, did not score as much as the third group. Writing the Ten Commandments before taking the test had an effect on their integrity and so they did not cheat.
Similar experiments were conducted in MIT but with a difference. Instead of giving cash, the students were given non-monetary tokens that could be encashed later. The results were very surprising. The third group cheated a whole lot more - as much as twice the first group. So when the cash was replaced with tokens the amount of cheating increased dramatically. In another experiment conducted in the MIT dormitories, a six-pack of Coke cans was left in the communal fridge. Within 3 days all the cans were gone. However when 6 one dollar bills were left in the fridge it remained untouched for more than 3 days. This means that not only did the non-monetary tokens “release” people from some of their moral constraints, but for quite a few of them, the extent of the release was so complete that they cheated as much as possible.
A person may not feel dishonest or guilty, taking a pen from office supplies or using photocopiers for personal use. But he would not take any cash that he finds in the office cupboard. When we deal with money, we are primed to think about actions as if we had just signed an honor code. But look at the latitude we have with non-monetary exchanges. When we look around us, much of the dishonesty we see involves cheating that is one step removed from cash. Companies cheat with their accounting practices; executives cheat by using backdated stock options; individuals exaggerate the cost of the television on their property loss report, or employees falsely report a meal as a business meal.
How can we fix this? We could label each item in the supply cabinet with a price (for instance) or use wording to explain stocks and stock options clearly in terms of their monetary value. However, in the larger context, we need to wake up to the connection between non-monetary currency and our tendency to cheat. Develop and maintain high level of integrity by doing daily prayers and reading spiritual and moral books. Let not even an iota of dishonest thought come to your mind. By assigning currency values to the non-monetary objects, make sure it influences you to not cheat.
Happy Reading,
Ram
Wednesday, April 28, 2010
Unsustainable Pay Raises
India has been a successful destination for knowledge based services. It wouldn’t be incorrect to say that it was the cheap but good talent that attracted many Multi National Companies (MNCs) to setup their operations in India. Over the years, this cost advantage of the India operations is slowly disappearing. I wouldn’t be surprised if the MNCs go to other countries that are cheaper than India. We already see the BPOs moving to Philippines, chip design moving to Singapore & China etc. If we analyse the root cause, it will be very evident that the steady, double-digit, year on year pay raises has minimized the cost advantage. Employee’s Cost to Company is only part of the overall cost. The rising infrastructure costs in India, coupled with energy costs further shrink the cost advantage. I restrict this blog to the potential impacts of ever increasing pay raises
India still has some cost advantage because of the pyramid structure of the organization. At the bottom of the pyramid are the new college graduates (NCG) who get the lowest pay in the company. At the top of the pyramid are the senior most managers of the company who would be paid, the most. In between, there are multiple layers or ranks. As we go up the pyramid, the pay increases but the number of people at each layer become lesser in number. The average cost to the company is still low, as there are more employees at the bottom of the pyramid. However, as an organization ages, it will have more senior people and thus the average pay moves up. Add to this, the ever increasing starting salaries of the NCG. The NCG’s pay has grown at a CAGR of 15% over the last 17 years. The pay in USA has not increased that drastically. The ratio of US NCG salary to India NCG salary has dropped from 20 to 4 in the last 17 years. Today, a few of the middle level managers in India get salaries that are in the similar ball park, as their colleagues in USA. While the cost competitiveness has been eroding, the talent pool with critical skills has been growing. This will be the saving grace for the MNCs in order to survive in India. However the rate of growth will slow down. The pay raises will drop. At senior levels it could stay flat or in some cases even decrease.
The number of critical high-impact positions, that justify higher pay, are limited. This means that not all experienced (# of years) employees can occupy these positions. Such experienced employees could be getting higher salaries based on their years of experience but their current position may not justify the same. In some sense, career stagnation happens. Sooner or later, these employees become overheads. The salaries of such employees could stay flat or even decrease. As the pay and benefits could possibly be linked to the job rank or the grades, even demotion of job ranks can happen. They may also be retrenched. Employees would prefer not to be in such situations, but it would be futile to ignore the possibility that it could happen to them.
There are choices that people can make. If they do not want to get into such a situation, then they should work proactively to enhance their careers and add greater value than their current role demands. Take up bigger challenges and deliver results. This requires employees to get out of their comfort zone and take risks. It also requires employees to broaden their repertoire. They should constantly look at upgrading their skill set and ensure that it is relevant, in the ever changing market environment. If they are not ready to face these challenges then they should also be ready to accept that their career and pay may get stagnant.
The unsustainable pay increase also impacts a person’s social life. With more salary, people tend to spend more and get used to a higher standard of living. Spending beyond the means, in anticipation of ever-increasing salaries can create liabilities. It also creates secondary effects in the society by increasing the cost of living.
Continuously upgrading ones skill and living within means can help in long term sustenance of a person’s life and work.
Happy Reading,
Ram
India still has some cost advantage because of the pyramid structure of the organization. At the bottom of the pyramid are the new college graduates (NCG) who get the lowest pay in the company. At the top of the pyramid are the senior most managers of the company who would be paid, the most. In between, there are multiple layers or ranks. As we go up the pyramid, the pay increases but the number of people at each layer become lesser in number. The average cost to the company is still low, as there are more employees at the bottom of the pyramid. However, as an organization ages, it will have more senior people and thus the average pay moves up. Add to this, the ever increasing starting salaries of the NCG. The NCG’s pay has grown at a CAGR of 15% over the last 17 years. The pay in USA has not increased that drastically. The ratio of US NCG salary to India NCG salary has dropped from 20 to 4 in the last 17 years. Today, a few of the middle level managers in India get salaries that are in the similar ball park, as their colleagues in USA. While the cost competitiveness has been eroding, the talent pool with critical skills has been growing. This will be the saving grace for the MNCs in order to survive in India. However the rate of growth will slow down. The pay raises will drop. At senior levels it could stay flat or in some cases even decrease.
The number of critical high-impact positions, that justify higher pay, are limited. This means that not all experienced (# of years) employees can occupy these positions. Such experienced employees could be getting higher salaries based on their years of experience but their current position may not justify the same. In some sense, career stagnation happens. Sooner or later, these employees become overheads. The salaries of such employees could stay flat or even decrease. As the pay and benefits could possibly be linked to the job rank or the grades, even demotion of job ranks can happen. They may also be retrenched. Employees would prefer not to be in such situations, but it would be futile to ignore the possibility that it could happen to them.
There are choices that people can make. If they do not want to get into such a situation, then they should work proactively to enhance their careers and add greater value than their current role demands. Take up bigger challenges and deliver results. This requires employees to get out of their comfort zone and take risks. It also requires employees to broaden their repertoire. They should constantly look at upgrading their skill set and ensure that it is relevant, in the ever changing market environment. If they are not ready to face these challenges then they should also be ready to accept that their career and pay may get stagnant.
The unsustainable pay increase also impacts a person’s social life. With more salary, people tend to spend more and get used to a higher standard of living. Spending beyond the means, in anticipation of ever-increasing salaries can create liabilities. It also creates secondary effects in the society by increasing the cost of living.
Continuously upgrading ones skill and living within means can help in long term sustenance of a person’s life and work.
Happy Reading,
Ram
Sunday, April 11, 2010
Sense of Urgency – A Cure for Complacency
In a fast-moving and changing world, a sleepy or steadfast contentment with the status quo can create disaster. For too often people are content with status-quo and are resistant to change. Complacency is much more common than we might think and very often invisible to the people involved. Success easily produces complacency. It does not even have to be recent success. An organization’s many years of prosperity could have ended a decade ago, and yet the complacency created by that prosperity can live on, often because the people involved don’t see it. Complacency is a feeling that a person has about his or her own behavior, about which he or she needs to do or not do. Almost always, complacent individuals do not view themselves as complacent. They see themselves behaving quite rationally. They can be creative in justifying their point of view. They pay insufficient attention to wonderful new opportunities and frightening new hazards. They continue with what has been the norm in the past. As an outsider, you may correctly see that internal complacency is dangerous, that past successes have created sluggishness or arrogance, but complacent insiders just don’t have that perspective.
To get over this complacency, organizations should create a high enough sense of true urgency among enough people. We live in an age when change is accelerating. The rate of change will continue to go up and up. To address the constant and continuous change, the sense of urgency will move from being an important issue every few years to being a powerful asset all the time.
True urgency focuses on critical issues. It is driven by a deep determination to win. When people have a true sense of urgency, they think that action on critical issues is needed NOW. A sense of urgency is not an attitude that I must have the project team meeting today, but that the meeting must accomplish something important today. Underlying a true sense of urgency is a set of feelings: a compulsive determination to move, and win, now. When it comes to affecting behavior feelings are more influential than thoughts. Thoughts are important, but whether it is contentment with the status quo, anger and anxiety, emotions influence action even more. Great leaders win over the hearts and minds of others. Martin Luther King Junior’s speech addressed not only the strategic plan that called for equality for blacks, but mostly it pounded away at people’s gut-level feelings with poetic rhetoric and passionate words about justice and morality.
Tactics for creating a true sense of urgency should aim at the heart. It should provide human experiences that work appropriately on all senses. People not only hear, but they see something in front of them or in their mind’s eye that helps raise urgency.
• Bring the outside reality into groups that are too inwardly focused. Reconnect internal reality with external opportunities and hazards. Bring in emotionally compelling data, people, video, sites and sounds.
• Behave with urgency every day. Demonstrate your own sense of urgency always in meetings, one-on-one interactions etc., and do so as visibly as possible to as many people as possible.
• Find opportunities in crises. Always be alert to see if crises can be a friend that can destroy complacencies.
• Deal with NoNos. Remove or neutralize all the relentless urgency-killers, people who are not skeptics but are determined to keep a group complacent or, if needed, to create destructive urgency.
To sustain urgency over time requires that it not only be created, but that it be re-created again and again. Sense of urgency leads to success, and success may lead to complacency if the sense of urgency is not re-created. The ultimate solution to the problem of urgency dropping after success is to create the right culture. Create the behaviors like being constantly alert, focusing externally, moving fast, stopping low-value added activities. When these behaviors become the norm, then a culture of urgency is instilled. People will then grab new opportunities, avoid new hazards, and continually find ways to win.
p.s This blog summarizes the learnings from the book “a sense of Urgency” by John P Kotter.
Happy Reading,
Ram
To get over this complacency, organizations should create a high enough sense of true urgency among enough people. We live in an age when change is accelerating. The rate of change will continue to go up and up. To address the constant and continuous change, the sense of urgency will move from being an important issue every few years to being a powerful asset all the time.
True urgency focuses on critical issues. It is driven by a deep determination to win. When people have a true sense of urgency, they think that action on critical issues is needed NOW. A sense of urgency is not an attitude that I must have the project team meeting today, but that the meeting must accomplish something important today. Underlying a true sense of urgency is a set of feelings: a compulsive determination to move, and win, now. When it comes to affecting behavior feelings are more influential than thoughts. Thoughts are important, but whether it is contentment with the status quo, anger and anxiety, emotions influence action even more. Great leaders win over the hearts and minds of others. Martin Luther King Junior’s speech addressed not only the strategic plan that called for equality for blacks, but mostly it pounded away at people’s gut-level feelings with poetic rhetoric and passionate words about justice and morality.
Tactics for creating a true sense of urgency should aim at the heart. It should provide human experiences that work appropriately on all senses. People not only hear, but they see something in front of them or in their mind’s eye that helps raise urgency.
• Bring the outside reality into groups that are too inwardly focused. Reconnect internal reality with external opportunities and hazards. Bring in emotionally compelling data, people, video, sites and sounds.
• Behave with urgency every day. Demonstrate your own sense of urgency always in meetings, one-on-one interactions etc., and do so as visibly as possible to as many people as possible.
• Find opportunities in crises. Always be alert to see if crises can be a friend that can destroy complacencies.
• Deal with NoNos. Remove or neutralize all the relentless urgency-killers, people who are not skeptics but are determined to keep a group complacent or, if needed, to create destructive urgency.
To sustain urgency over time requires that it not only be created, but that it be re-created again and again. Sense of urgency leads to success, and success may lead to complacency if the sense of urgency is not re-created. The ultimate solution to the problem of urgency dropping after success is to create the right culture. Create the behaviors like being constantly alert, focusing externally, moving fast, stopping low-value added activities. When these behaviors become the norm, then a culture of urgency is instilled. People will then grab new opportunities, avoid new hazards, and continually find ways to win.
p.s This blog summarizes the learnings from the book “a sense of Urgency” by John P Kotter.
Happy Reading,
Ram
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