HR, a key driver of organisational growth

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Ajit Menon, Executive Director – Organisational Development, Mudra Group.
Ajit Menon, Executive Director – Organisational Development, Mudra Group.

HR has to emerge as a strategic business partner helping the top management build an organisation that is good not just for today, but for tomorrow and beyond, says Ajit Menon, ED – Organisational Development, Mudra Group.

HR has unfortunately been relegated to a support function across industries. In my experience spanning hospitality and BPOs to aviation and now advertising, I find that there is a tendency to allow HR to handle hygiene issues — perform the personnel role and handle payroll, a predictable training and development role, rolling out the vision document given by the CEO, and so on. There needs to be a clear distinction between ‘Human Resources' and ‘Organisational Development'. That is coming in now. HR is now working with the top management to propel the organisation forward.

From being data-driven, the function has evolved to become technology-driven. It is easy to live under the illusion that if one creates innumerable reports, time sheets, assessment modules (some outsourced) and the like with the use of technology, one has graduated from the personnel function to organisational development. Among the HR practitioners who were seen as best practitioners were those who were most vocal and visible — not necessarily the ones who were successfully contributing to the growth of the organisation as business partners.

There is a realisation now that the function should run in sync with the organisation's vision and road map for growth. Growth of the organisation will come with growth of its people, especially in a people-centric business such as advertising. The reason I moved to advertising was to move to an industry where there is hardly any HR in practice.

Leadership, Learning and Change

The approach to people management has to stop being myopic. When we reviewed HR at Mudra, we stopped looking at what was happening in advertising, and started looking at best HR practices in large corporates. But yes, we needed to be aware of the nature, scope and peculiarity of this industry to craft a people development plan.

It's a common perception that the advertising industry doesn't pay as well as the client categories it services — that's not entirely true as things stand today. One of the biggest learnings I have had is that if you provide a great work environment, recognition, and get the talent to believe they can build a career here, monetary compensation stops becoming the biggest driver. Having said that, one cannot hide under the shield of the company not doing well to avoid paying increments. Hygiene factors have to be considered to ensure that employees are allowed to do their jobs with a decent lifestyle.

A company can pay bonuses when it does well. But it has to pay an increment that is reflective of the current inflation rates. If the cost of commuting and food items go up irrationally, how does the employee meet those additional expenses?

Incentive Dynamics

The first thing to do is clearly to identify the people you want to retain and groom. On the pay, the ideal situation is to have a base salary, and an incentive structure. The incentive component needs to go up as one goes up the organisational ladder.

If the targets are restricted to the CEO, then the structure doesn't work. KPAs need to be defined even to creative directors today.

Realistic targets with attached incentives are a great way of weeding out those who are in the job for the wrong reasons. If one enjoys the work, they don't need to push themselves too hard for the targets.


Every working professional wants to know how his career will progress. There needs to be assurance that if one gives 100 per cent, the person will grow. A ‘Career Progression Plan' needs to be in place. Transparency in stating how employees can grow is also needed.

For instance, we have instituted a ‘Star' programme. The members of such a programme should be identified by defined parameters such as: (i) critical contribution to the business, (ii) ability to be role models, (iii) directional vision, (iv) succession planning and (v) current performance.

Most organisations understand the 80:20 principle that defines employee contribution. It is imperative that one identifies the stars to be retained, motivate them, and ensure that one does not de-motivate the rest. On the contrary, the idea is to motivate those who don't make the cut for the programme to aspire to get there.

You cannot completely escape scenarios where a competitor poaches one of your stars at three times the salary and a position three notches higher. We try to explain to the person where his career is progressing and where he would be in the normal scheme of things. He or she is simply made to understand the gamble with a ‘career jump'.

I have seen instances where people who take such jumps return to a role that is better defined with long-term perspective, rather than an impulsive hire to fill a temporal need gap.

As told to Gokul Krishnamurthy

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(This article was published on February 20, 2011)
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