Organisational Behaviour – Group E2

Why is people management important ?Ten tips for people management.

 
Before throwing any B- School jargon or discussing any incomprehensible theories lets go
through some real life examples where companies have faced difficulties in managing people
and how critical, people management becomes for an organization in order to usher in such a
competitive and dynamic business environment. The examples also talk about some of the
strategies used by the organizations to deal with such problems.

Cases in people management:

1. Employee motivation and retention strategy at Microsoft:

Since its inception, Microsoft was appreciated for its employee-friendly HR practices.
However, during the late 1990s, as the company was growing rapidly in size, it lost the
popular elements of its work culture. Moreover, several racial discrimination lawsuits and
antitrust proceedings affected the company's corporate image and financial performance
adversely. In the early 2000s, in order to improve its profit margins, Microsoft started cutting
several employee benefits, which de-motivated its employees. To boost the employee morale,
in 2006, Steve Ballmer, the then CEO of Microsoft, appointed Lisa Brummel as the Senior
Vice-president of HR.

After taking charge, Brummel announced a plan to significantly revamp some of the existing
HR management practices at the company. She announced a plan named 'myMicrosoft,'
which included developing appropriate systems to enhance communication between the
employees and the HR department, making changes in the company's performance review
system, introducing several new employee benefits, and designing new workplaces in an
effort to attract and retain employees.

With the changes in the HR management practices, Microsoft was able to boost employees'
morale. The employee attrition rate went down to 8.3 percent in 2007 from 10 percent in
2005.

2. HR problems at Jet Airways:

The retrenchment drama that unfolded in one of India's leading aviation companies, Jet
Airways (India) Limited (Jet), in late 2008. After showing the door to more than 1000
employees in a bid to streamline its operations, Jet was faced with immense criticism and
opposition by various organizations and political parties.

Jet's chairman Naresh Goyal reinstated the employees a day later saying that he was not
aware of these sackings. The Indian aviation industry was going through a tough phase and
experts felt that it was in the interest of the company to retrench employees to remain
competitive.

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In the last week of November 2008, Jet decided on a 20% cut in the salaries of its pilots,
engineers, and some other staff. The company planned a 5 percent to 10 percent cut in the
salary of top officials who drew a salary above Rs. 75,000.

However owing to huge criticism Jet reinstated the sacked employees.

3. Toyota: Look beyond Gas Pedals

In Jan this year Japan based auto maker company Toyota, famous for its quality had to recall
nearly 9 million cars. Poor handling of this issue in the public eye damaged the automakers
brand reputation and caused sales to decline to their lowest point in more than a decade.

Dr. John Sullivan, a well thought leader in HR states that this was not a technological glitch.
Where employees fail to perform as expected, investigators must determine if the human
error could have been caused by factors beyond the employee’s control. Such external factors
might include actions by senior management, lack of adequate information or job training,
faulty inputs to the process, or rewards that incent actions not in line with documented goals.

4. HR causes Hyundai to crash:

In the last four decades Hyundai managed to establish itself all over the company as company
producing reliable, technically sound and stylish automobiles. In the 90s the company started
aggressive overseas programs. By the late 90s, when the south eastern crisis struck, the
company like all other organizations, faced serious financial problems. To survive, it had to
cut its labour force. The company offered various retirement schemes, unpaid leaves for two
to three years, etc. to its workers, and expressed its inability to support its entire workforce in
the slack period.

The union refused to compromise and the management too held its ground. Finally the
government intervened to force a negotiated settlement between the management and the
union. However, this event severely affected the company’s image as a brand.

5. Wal-Mart: Even Leaders make mistake:

Wal-Mart is the biggest company, the biggest retailer and amongst the few trillion dollar
companies in the world. Wal-Mart’s culture was characterized by an orientation towards
customer satisfaction and provide the best value at the lowest price. Employee well being was
given a lot of importance and the company tried to project an image of a socially responsible
entity.

However, over the years the company became the target of much criticism. It held the rcord
for having been sued the maximum number of times. Its work culture was criticized on
various grounds which included gender discrimination, its overtime policies, using sweatshop
products and “killing off” small local business.

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All these examples reveal that today, People Management is not just a mere requirement but a
strategic asset in organisations. It has been accepted that apart from the technology used, it is
the human factor, which differentiates organisations. The primary focus has thus shifted to
People Management.

Every organisation encounters threats, opportunities, and challenges provided by the

environment in which it exists. The environment also provides the necessary resources in
terms of technology and human capital. However, even the greatest technological
advancement can prove to be a failure in the absence of human competence to use it. In short,
people fuel the entire organisation and create value for it with the help of technology and
financial resources.
People management has various facets. As people managers, employees manage diversity,
teams, employees’ performance, and motivation besides helping conflict resolution through
successful negotiation.

Every organization strives to achieve the best out of their employee but in practice why do
the results are not in harmony. So here are the ten mistakes the employers make which
jeopardize their relationship with the employees:

Ten Dumb Mistakes Employers Make:

1. Add another level of hierarchy because people aren’t doing what you want them to do.

2. Appraise the performance of individuals and provide bonuses for the performance of
individuals and complain that you cannot get your staff working as a team.

3. Add inspectors and multiple audits because you don’t trust people’s work to meet
standards.

4. Fail to create standards and give people clear expectations so they know what they are
supposed to do, and wonder why they fail.

5. Create hierarchical, permission steps and other roadblocks that teach people quickly their
ideas are subject to veto and wonder why no one has any suggestions for improvement.

6. Ask people for their opinions, ideas, and continuous improvement suggestions, and fail to
implement their suggestions or empower them to do so. Better? Don’t even provide feedback
about whether the idea was considered.

7. Make a decision and then ask people for their input as if their feedback mattered.

8. Find a few people breaking rules and company policies and chide everybody at company
meetings rather than dealing directly with the rule breakers. Better? Make everyone wonder
"who" the bad guy is.

9. Make up new rules for everyone to follow as a means to address the failings of a few.

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10. Provide recognition in expected patterns so that what started as a great idea quickly
becomes entitlement.

Ten Tips For People Management:

Manage:

They focus on getting their people to deliver the key activities and don't attempt do
too much themselves. The best managers delegate widely, using the ethic 'Ask for
forgiveness, not for permission' to free their people from blame or wrongdoing.

 Build the Best Teams:

Leveraging the exceptional talents of all the people around them, managers develop
and utilise capability fully - and glue it together.

 Focus on Delivery:

Managers are there to deliver the day to day tactical results the business or
organisation needs. Here, there is little space for strategy or vision as such, but those
great at managing people will keep a reference point there. Every manager's defined
goal is measurable results.

 Build Relationships:

As it's all about people, great managers build relationships easily and make it a
priority, day-in-day out. They spend a lot of time with and listening to, their people.

 Accept Feedback:

Actually, they don't just accept it, they suck feedback in - they use their excellent
listening skills to seek out feedback all the time - in every interaction.

 Develop Others:

Grasping the opportunities, the best managers quickly link them to those who can
make progress in their own development - and in line with the ongoing succession
planning, prepare for the future well in advance.

Are Accountable:

They are very clear that they are 'where the buck stops'. No blame elsewhere, not
upwards deflection of decisions; no 'someone else's fault'. They are where the action
is and they accept it. It's down to them.

 Set Standards:

To ensure that everyone is clear, great managers have simple and clear standards
through out their area of operation - ideally created in collaboration with their people.

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Are Determined:

Focusing entirely on value-creation, they stick to plans, policies and change

programmes like glue. They have a skill to know and deliver what is right, without
veering from their Vision.

 Can Be Trusted:

The best managers are ethically sound, fair and honest. They make promises only
when they know they can deliver. Everyone is treated equally and their own
behaviour models fairness and transparency.