Creating_high_Performance Mr. Pathak GACL
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Theme Human Capital Strategy Getting the right people
Creating a high performance culture with the right HR strategyByS C Pathak GM (HR) Gujarat Alkalies & Chemicals Limited
One of the Key success factor of a high performing organization is its Culture. Culture adopted by the organization determines it success and even sustainability. And this challenging task of creating a high performance culture can only be accomplished by the HR department, with the right HR strategies. Why HR ? Because it is the only department that deals with people process like recruitment, selection, training & development, performance evaluation, career planning promotion, transfer etc.
What is culture?
Culture is the infrastructure and the fabric that binds people and processes together to generate results. 80% of Organisational culture exists by accident or default, rather than design. Most are shaped through critical incidents or key events that have happened in the history of the organization.
Culture should be focused and have a balance between internal and external processes
Role of HRPre Implementation To know what their culture is and what type of culture is the demand of market.
To know the strength, weakness, opportunities and threats (SWOT analysis) of the organization. To elucidate the need for Change in the culture and seek the participation of the leadership and other employees in the change. The whole process should be by the people, for the people and of the people.
What does the right HR Strategy should be for high Performance culture? HR should communicate to its employees the companys Mission, Vision & goals . To ensure that the process follows a top-down approach. HR should support the employees / supervisors in forming KPIs / KRAs such that they are rational, linked with Organisational goals and reflect accurate impact on organizational targets. To link performance management system with reward, & other HR process. To recognize the high performers. To identify non-performers, counsel them, identify reasons for nonperformance & organize training and development programs and motivate them.5
Case Study Performance Management System At GACL
Gujarat Alkalies & Chemicals Limited GACL A State Government PSU
Features that makes GACL a Unique PSU: Operating in the competitive market unlike other state PSUs Steep competition in business as well as in job market Competitors: Grasim, DCM shriram, Nirma
Challenges to HR Deptt. of GACL : Four year pay revision not comparable with peer industries High Attrition Rate Scarce Technical Talent Non-comparable Pay Structure
Value Enhancement - Old v/s New PMSSr.No1 2 3 4 5
Old (PAR / CR)Appraisal was only based on behavioral aspects Non-numeric ratings were used for evaluation No linkage to the organizational business goals No individual / functional targets for employees No role clarity / job prioritization in carrying out ones function Ratings were not communicated to employees No linkage to reward/ recognition. No linkage with other HR initiatives like career growth, job enlargement / enrichment etc.
New PMSAppraisal is integrated with functional as well as behavioral aspects Five points rating scale is used. Linked with organizational business goals and objective Targets are decided through active participation. Role clarity through Key Performance indicators and prioritization through weightage given to it.. Final performance ratings are communicated to concern employee. Employees is rewarded through variable pay. Linkage with other HR initiative like Promotion, Performance counseling, training , job enlargement/ enrichment etc. Jobs linked to the SMART methodology Specific, Measurable, Achievable, Realistic, Time-bound
No specific timeline for execution of jobs / targets
The Implementation Phase:1. Top Management Support:
Top Management Support
Active Involvement of Board of Directors & MD2. A Steering committee: Senior
Executives of GACL (to oversee process of implementation) Steering Committee
Help-Desk By HR
Change Champions at Ground Level: Two representative from each department (to directly interact with all management staff as facilitator) Communication: Through Training Programs, Office Orders, Change Champions Covered Each employee in Management Staff (Concept , Objective and Benefit of new HR Initiatives)
4. Clarity in
Rigorous Training Sessions Clarity in Communication
5. Rigorous Training Sessions:
6. Help-desk by HR: For one-to-
one customized service & query resolution. E-mail id to interact directly with HR & Head
The Concept New PMS: A framework to drill down the Organisational goals in Individuals performance targets Scientific Evaluation KPI based target setting
Integrated process which involves superior
employee & his
Aligning employees efforts with functional and organisational goal joint efforts towards improving organisational performance as a whole. Applicable to Management Staff onlyPage 10
New PMS Linking with other HR ProcessesLinkage with Reward & Recognition Training & Development Promotion Policy Job-rotation, Job-enrichment & Job-enlargement Performance CounselingPage 11
Variable Pay MethodologyLevels Total Pay (CTC) (100%)M1 M4 (ED, CGM, GM, DGM) M5 M8 (CM. Sr.Mgr, Mgr, Sr. Officer)
Fixed CTC (85% of Total CTC)
Variable Pay (15% of Total CTC)
M9 M10 (Officer, Asstt. Officer)
Both Individual & organisational performance are considered level wise for Performance rating and calculation of variable pay while giving Individual performance rating both Individual Performance & behavioral competency are considered.LevelsM1 M4 (ED, CGM, GM, DGM)
Key Performance Indicators (KPI)
M5 M8 (CM. Sr.Mgr, Mgr, Sr. officer) M9 M10 (Officer, Asstt. Officer)
Concept & Need of Compensation restructuring
Restructuring of existing salary components (allowance & perks) is carried out to provide option to the employee for - Own tax planning. - Increase cash in hand.Need for Compensation Restructuring
High FBT / Retirals burden for GACL.Encashment components companys car etc. with no perceived value to the employee ie. Liveries ,
New young entrants prefers more cash in hand .
Large number of components, leading to administrative issues of managing / monitoring .Outdated structure; not revised even after numerous changes in tax laws.
GACL Compensation re-structuringTotal amount of Cost to company (CTC) is broken down as follows. Cost to Company (CTC)
Fixed CTC (85% of CTC)
Variable Pay (15% of CTC)
Base Pay (40%)
Flexible Pay Plan (60%)
Variable pay is paid onetime as per performance rating. Base pay is decided by company Flexible pay components are decided by an employees within the allotted cap
Restructuring of componentsComponents of Old Compensation Structure1.Basic 2.F.D.A. 3.V.D.A. 4.H.R.A. 5.C.C.A. 6.Washing Allow.. 7.Canteen Subsidy 8.Education Exp. 9.P.S.D. Allowance 10.Medical reimbursement 11.Chem. Handling Allow. 12.Gardening Allow. 13.Conveyance 14.Company Car 15.Education Asst. 16.Birth day gift 17.L.T.A. 18.P.F. 19.PA Policy 20.EDLI Insurance 21.Superannuation 22.Bonus/Ex-Gratia 23.Uniform/Liveries 24.Gratuity 25.Phone 26.Medical 27.Electricity 28.Furniture 29.Uniform & LiveriesPage 15
Components of New Compensation structure.. A. Base Pay (to be decided by GACL) 1. Basic 2. PF 3. Gratuity
B. Flexible Pay Plan (to be decided by employee) 4. Superannuation 5. Conveyance 6. LTA 7. HRA 8. Education Asst. 9. Hostel Allowance 10. Canteen 11. Washing Allowance 12. Medical Allow. 13. Variable Special Allowance
Role of HR at GACL during the Initiatives HR department deliberated the PMS & Compensation with members of committees in all vital decisions during the implementation process. HoD- HR conducted a series of informatory sessions with the Corporate & Functional heads. During training sessions HoD HR addressed queries / fear / notions of the employees and explained them individually whenever required. A team of Officers of HR department facilitated each and every management employee in fixing KPIs (SMART method) by linking them to the Organizational goal and deciding components in flexible pay plan. HR Team along with IT department developed PMS & compensation module and trained all mgt. employees for using the online module . Hence the whole system is paperless. Now HR department is owner of new PMS linking variable pay and implement flexible pay plan (Choice pay) from 2009 onwards.Page 16
Thank YouPage 17