What keeps human resource professionals (HR) awake at night? Engagement issues; fast revolving exit doors at work; productivity challenges; lack of leadership; perhaps all of these and more. And HR folks are working overtime (literally in some organisations!) to resolve these with benchmarking best practices in other firms that struggle with similar challenges.

Significant investments are made in some of these areas with mixed results. In marketing, there is a saying, “Only 50 per cent of the marketing budgets delivers; the issue is no one knows which 50 per cent!”

When it comes to HR, the scene is no different. Not surprisingly, HR budgets shrink all the time.

The edifice of engagement or retention requires a strong foundation. And when it comes to HR, the foundation is one of “perceived fairness” in people practices. People value fairness more than money and titles. This is an area where HR needs to do a lot of soul-searching. Attrition, for example, is an area of concern, particularly when an organisation loses its top talent. Significant work has been done in this area, but one article, The role of shocks in employee turnover , that was published in the British Journal of Management, merits a mention. This article says people leave organisations when they receive a shock. And lack of “fairness” is perhaps one of the most shocking events that can trigger an employee to quit.

Unjust practices

I have attempted to capture a few examples of practices that many HR folks can relate to. None of these practices communicate that the organisation is fair.

It is a norm in most companies today to have a variable pay component as part of the annual salary package. This is to be paid based on certain pre-determined criteria relating to business performance. The pay-out may happen on a quarterly, half-yearly or annual basis. The fairness related question is: Do you pay or deny this component to someone who is leaving the company after the period for which the variable pay is being calculated?

Say, in an annual plan, if the employee has worked for the year and leaves the organisation, say in January or February, do you pay the variable or not? Several organisations pay this variable ONLY if the employee is on the rolls of the company on the day of the pay-out, although the pay-out belongs to the period during which the employee worked and perhaps worked hard.

When fresh engineers are hired from campuses and if for reasons of slowdown in business traction these engineers are asked to leave or are laid-off, does the company honour at the least, the “notice pay clause” in the offer letter? Or are they simply called and asked to leave. If freshers leave the company on their own, they are asked to cough up a “bond money” and “notice pay.” But freshers can be terminated anytime without even honouring the “notice pay on either-side” commitment included in the offer letter.

We all know that the business landscape is increasingly becoming a “roller-coaster ride.” This will require what I would like to call “accordion management.”

Like playing an accordion, organisations and HR folks are called upon to expand and contract hiring based on the business situation. However, the issue here is not letting people go, but how some organisations handle this. For some reason, even the most progressive organisations in India do not want to acknowledge the difficult business situation and the painful consequence of downsizing. Instead, they go about laying-off people, but go to town saying they are only “getting rid of poor performers.” As if losing a job is not bad enough for employees, this public stance adds “insult to injury.” Such stances are not only a shining example of unfairness, but actually inflict harm on people as even the organisations looking to hire avoid recruiting people who have been laid-off, and branded as non-performers.

Diversity is a big thing in many organisations for good reasons. Since the customer-base in the marketplace is very diverse, we need a similar diverse employee profile as well to be able to service the diverse customer-base. Let us take a closer look at how salary increases and promotions are delivered in a few organisations for women employees who go on maternity leave — something that they are legally entitled to. In many places, women employees on maternity leave are given pro-rated raises or their promotions are deferred by the managers and HR often plays a second fiddle, instead of questioning such unfair practice.

Employees serving notice period on resignation are denied salary raises (remember it is for the work done, not for some future performance), and often their variable pay is not paid to them for the period they contributed to the business performance.

Look in the mirror

One does not need an MBA in HR to understand the lack of fairness in many such decisions as above. And HR is either a silent spectator or an active accomplice when such things are “business as usual” HR practice in some organisations.

There are several organisations where HR folks guard against such unfair practices and uphold values and integrity around people practices. It would be good to bench mark such practices and make them a part of one’s own organisation. HR managers do not have to look too far to identify such practices and declare a war on them and put a brake on them. More often than not, these practices happen right under their nose. A quick audit can reveal many of them. The justification for some of these unfair practices may be “keeping with the Joneses.”

For many of the intriguing people issues in our organisations, all that we need to do is remember the ancient wisdom, “When in trouble, look into a mirror, not out the window.” Many of us in HR tend to look out for the causes of our problems. In my view, we will find answers to our problems if we looked into a mirror and understood that the root cause of all our problems is unfair practices.

So, the key tool for employee retention and engagement is understanding our own fairness quotient as HR folks and as an organisation. It is difficult, but who says HR is for the weak-hearted?

(The author is an Executive Coach and HR Advisor to corporate houses.)

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