Tuesday, April 28, 2009

Align!.. Optimize!!... Fire!!! - The New HR Mantra

Last month, I met an old friend. He had done himself well, and is now the HR Head – or Chief People Officer as he would insist - in a blue-chip company.

"How have you been?" I asked him.

"Oh, I am doing well," he replied.

"...and how has the current recession affected you?" This was a curiosity for me: what would the HR professionals be doing with people when there is not enough market demand to keep the employees productively employed.

"Not much, really!! We have managed it well," he said. "In fact, we just concluded an Employee Alignment and Optimization initiative last week."

"Employee Alignment and Optimization" seemed such a sexy term. It conjoured up images of a happy bunch of people being helped by my friend and his HR team to bring their interest and capabilities in-synch with their work and performance.

"That’s really nice! You mean, you assessed and re-allocated them so that they get to do what they are really capable of doing, and enjoy doing?”

He looked aghast and uncomfortable. “No! no!,” he said. “This was actually an initiative to disengage about 200 of them from the organization.”

“You mean, you fired them?!!” I was startled, not being sure how can one “optimize” and “align” people by firing them.

“No, actually, we didn’t have to fire them, at all,” he beamed, happily. “ In fact, as we had planned, it was a voluntary separation. It was really a very smooth process.”

I was thoroughly impressed. “That’s really remarkable!,” I said with awe. “ It says so much about the level of commitment you must have fostered among the people, that they could make such a sacrifice for the larger good of the organization. Imagine!... you send out a mail saying that we need 200 volunteers to leave the organization – and people actually volunteer.”

My friend looked at me as if I had lost my beans. “Of course, Not! It was not like that at all!!” he almost choked. “This was a very systematic and thorough exercise; we planned it with precision, and with full confidentiality; and we trained our HR and line executives to communicate the choice to the 200 of our employees who had be separated.”

I was befuddled, “….and what was the choice?”

“Oh!,” he said with the pride of a general who has cleverly ambushed the enemy. “We told them that they can volunteer to resign; they will have to sign a document to that effect. It was our legal department which suggested this. In return, we will give them 2 months of “sabbatical leave” – “

“Sabbatical leave! You mean, the company will finance 2 months for their re-education?” I was amazed at this generous gesture, though by now, I had nagging doubt that there must be a catch somewhere.

“No, no!, we can’t do that. Think of the costs!” he corrected me. “You know, what with this sensitivity of media about the pink-slips, we had to really think about what to call this interim period. What we actually offered them was 2 months of further employment at half salary, and they don’t have to come to office – actually, they can’t enter office, at all! We also promised to help their outplacement, and they get a decent separation package after 3 months. Depending upon their length of service, they would get 2-months to 10-months of their pay as the severance pay.”

“…and what if they didn’t accept this offer?”, I was curious – or as Alice would have said, it was getting curiouser and curiouser.

He laughed, waving his hands in the air. “Actually, there was not much of a choice for them.” he said with some satisfaction. “We had their performance ratings, and other inputs from the line managers, which we could use to retrench them. We told them that, upfront.... our Legal Dept had already put together a strong case for termination for each of them, really!.”

A stray thought suddenly occurred to me.

“But tell me,” I asked. ”why did you want to fire – er, sorry, disengage - them in the first place!?”

He looked at me incredulously, as if I was from some other planet. “Don’t you read the newspapers?” he asked. “I don’t know if this is a cyclical recession or a meltdown, but the point is that we need to cut down costs – and maintain our margins.”

“But aren’t employees the “resources” – I mean, Human Resources? I know organizations which even call them “the most precious assets” or “human capital”? How did they suddenly become “cost” to the company?”

“Ugh! You don’t seem to understand…,” he lapsed into silence for some time. “After all, “resources”, “assets” etc., are just words. The key issue is: whether, as HR professionals, we are contributing to business or not.”

“But what happens if the business picks up in a year or so, and you need more people?”

“If that happens, we will have to hire new ones”, he said in a matter-of-fact manner. “The point is that have to maintain our profit margins of 35%...”

Needless to say, we left each other, puzzled – and the rest of the conversation, somewhat, went on the same tenor…

And I recalled Jerry Harvey’s classical article: “Eichmann in the Organisation”

“… it was not the Nazis only who were to be blamed for what happened to Jews – but also the Jewish Council in Germany. To quote:

“…the collusive role played by the Jewish councils – the most powerful, respected, and trusted members of the Jewish community – in the liquidation of their own people, including, in the end, themselves…. they compiled lists for the Nazis of persons to be deported… served as police during actual seizure of people and property… “

In the contemporary scenario, Eichmann was the quintessential Human Resources professional, and would have approved of the new HR Mantra:

Align!... Optimize!!... Fire!!!


divi_dave said...

Nice post Sir.
The companies are indeed trying all they can to keep away from the use of the term lay-offs. Right from making it darn difficult for the Employees/Trainees to perform and then disengaging them for non-performance to carrying out all types of initiatives which carries out the employee exits as smoothly as possible. They're leaving no stone unturned in saving their "good-will". I think terms like indispensable (human)resource would stop making sense soon(if at all it ever did).

star said...

too good post..
what is the role of HR Manager? is a question now.
People say - recruit, train, motivate, retain..the human talent in the org. its considerably understandable that in times of crisis these managers fail to see the longterm..issues so concerned.
It not only does bring down the goodwill but it will create bitterness in the minds of existing employees as well. Due to which good performers will also (chances) become bad performers. they say stress from job? what leads to it?
-Job security
-Intrinsic and Extrinsic factors associated with jobs..so on..
So, if there is no job security and an employee constantly works under pressure..they are creating a hell out of life for an employee ..and need not disengage..but he may voluntarily sign out..atleast the mystery ends!!!

Vijay Pereira said...


I asked the following question on a linkedin poll:
What is the role of HR in this economic downturn?
Damage control



bombay dosti said...

Thank you for putting this post down.I was contemplating with a nagging doubt for quite some time. In every chat show, that comes, people are seen to be often questioning the labour laws that India has, that it comes in the way of setting up industries fast. But the kind of protection that our labour laws gives for the shop floor employees, makes sure that atleast this kind of "firing" without a noise happens. Not that it does not happen, but atleast people are aware of their rights. Of course, there is a downside to this as well, where industry tries to avoid making people as own employees as much as possible.

At the same time, what I keep wondering at these times, is that in the knowledge industry, noone is really aware of what their right is in such a scenario. In some companies, it is half month's pay and in some companies, it is not even that. What is the employees entitlement?

Another thing to note here is that, companies, in the knowledge sector, are adhering to American clients and follow their system of hire and fire. Its so unfair to take bits and pieces of a system. From what I understand, you could fire, in the US, but there are some strict entitlements laid down for the employee in case of such a situation.Noone seems to be speaking about anything of that kind.

I think its high time, that there are written down legal terms to be put down, regarding the rights of the knowledge workers too. Knowledge workers would be the set of people who are least aware of their 'employment rights'. For so long, they were concerned only about benefits.

The reason I am writing this comment is also to get your opinion on this. Are you aware of any such written down entititlements for white collar employees. Or is this the time, for "white unions" to start working?

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