The Hindu Business Line : ‘HR, a key component of organisational set-up’

Chennai, Nov. 28 HR is widely recognised as an important cog in the organisational wheel and it is involved in the strategic business planning process. This is one of the many findings of an ongoing survey being conducted by Ernst & Young and the National HRD Network, an association of professionals committed to promoting the HRD movement in the country.

But despite awareness of its strategic importance, companies place only a limited focus on increasing the effectiveness of HR processes.

According to Mr N. S. Rajan, Partner, Human Capital, E&Y, this was a contrarian view and organisations seemed to be happy with the way things were. Mr Rajan is a Regional President of the NHRD (North).

Preliminary findings

Preliminary findings of the study titled ‘HR’s Next Agenda’ were presented at the 12th national conference of the National HRD Network that opened in the city today.

The survey aims at studying the state of HR practices and the upcoming priorities of HR in India with a view to creating a baseline of current practices and providing directional guidance to the trends shaping up in the HR function.

One hundred and eighty-eight organisations, representing 15 industry sectors, participated in the survey, the first such study to cover the entire country.

Based on these findings, the study believes that HR would partner business to reduce cost and improve efficiency. More than half the respondents planned to introduce effective measures of performance of HR or HR metrics in their organisations.

Increments in 8-10 pc band

According to the study, increments were unlikely to exceed 8-10 per cent in the coming year and performance-linked pay would take precedence even at the junior levels.

The financial services sector was found to have the highest incidence of short-term performance pay while the chemicals and petroleum industry offered relatively big benefits. Employee stock options (ESOPs) were losing their sheen as a long-term incentive.

More than half of the respondents said there was need for more transparency in the compensation practices.

According to Mr Rajan, this indicated that there was a growing awareness of the need to follow corporate governance rules in the matter of compensation.

He pointed out that in the future, HR would move towards a standard global compensation system across geographies.

As far as talent acquisition goes, the study says internal recruitment would be preferred to external recruitment and a positive corporate reputation was the biggest draw for hiring talent. Seventy per cent of the companies surveyed agreed that hiring would continue despite the economic slowdown.

Individual goals were not well aligned to business goals and communication of performance feedback and rating to employees are areas that need improvement, it said.

The study finds that no budget cuts were expected in training and development over the next one year.

Only a third of the identified future leaders were satisfied with the organisational support for their development.

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