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High Performers, the 80-20 cohort, the machination which makes the organization compete, run and win have their unique retention dynamics. Their expectations from an organization differ widely from the run of the mill, templated, standard expectations the rest of the audience has. Their awareness that they are important cogs in the wheel entails that their retention becomes a sleep depriving issue for HR teams.
How do you ensure that star performers remain in the “passive candidate” mode forever for head-hunters and recruiters?
Join Arul Rajkumar (Ex. Director HR – Randstand) in a conversation with Mettl , India’s most prolific assessment company to understand how top companies engage their top talent. This webinar will see him talking about:
Recorded on: 16 October, 2015 Duration: 68 min
Last Update: August 16, 2016
Moderator: Good morning, ladies and gentleman. Thank you for taking time out of your busy schedules to attend today’s webinar. After a brief hiatus in the month of March because of the financial year closure we are back, bigger, and better. Kicking off April’s webinar series with an agenda, which is very topical to the audience right now, considering that this month marks the dreaded T word [SP]. What is the T word we are talking about here? Turnover.
Yeah. Yeah. It’s painful. And it’s even more painful when high-performers, that cohort, which is made of your teams of all shapes and sizes, sleepless nights. When the days succumb to the April Blues and move on to greener pastures, is when we take stock and realize that maybe our high-performer strategies/retention strategies are not up to the mark and can be shaped to an area [SP], which it is not right now.
The problem here, in India, which in our conversations with a lot of HR actors is that we are very reactive rather than being proactive when it comes to high-performing management. And it was high time because all of our webinar services also pointed towards the great need by the paternity and the sorority to understand a better sale and a better overall sale retention framework for high-performance. How should it be different, than that of the rest of the population? What motivations try and tend to stick to their current organization? How are the expectations from the organization different from the rest of the pie? We intend to throw some light on these topics by means of this webinar as we welcome Arul to shed light on this topic.
Arul is going to share this webinar in his mighty capacity, having led the HR function at Randstad in his last stint. He oversaw person’s transformation of Mafoi at Randstad in this very instrumental stint. Prior to Randstad he led people function at Randaxy and TNT India and has been instrumental in deploying high-performer retention and growth in these very industries.
This presentation of Arul’s, today, it’s a case study where he reflects and will walk us through a backbone of a robust, very holistic high-performance environment. Over to you, Arul.
Arul: A pleasure to be with you all. I have a presentation on the webinar so if there’s any difficulty in viewing it or seeing just let us know so that we can correct it. Good morning to everyone and glad to be with you.
What I’ve probably done in the presentation for this session is I’ve shared a live case study, which I’ve been involved in, in terms of my consultancy assignments in the last two years, and I’ve shared the challenge, which the organization went through, and also the interventions they did and the results they obtained, and also the key learnings. And what I’ve probably deliberately done is I think these topics are more relevant when it’s discussed and deliberated rather than a PowerPoint presentation. So I’ve actually made this as short as possible so we can probably discuss…
So I’ve made a presentation much shorter than what we could share for one hour. So we tried to make it as short as possible. And then, probably, we can deliberate on life issues, which you might have and questions you might have. So that probably was the model, which we looked at. If there’s any questions you have during my presentation, please feel free to ask me, I’d be more than happy to answer them.
Okay. I just covered this. It’s a live case, which we looked at. The industry is in the auto industry; it is in the premium auto segment. And this is a [00:04:18] distributor of premium auto brand, a very prominent brand, a very lucrative brand, and also the market leader in that segment. As I told you, probably key interventions and results which we obtained. And deliberation and learnings are from this particular sector. So it could vary from sector to sector but what I’m sharing with you is more specific to this sector, so I’m sure the interventions and learnings would be different from different sectors so we can probably discuss it in detail. And then, it’s open for questions/answers for any of the challenges, which you have, probably we can discuss that.
Something about… of course, the name is masked. So something with the problem statement, I think X-car has developed a reputation of being an employer of choice of caliber of staff. And it’s been successful in attracting and retaining staff. But also it’s been a target for poaching by other competitors who are setting up shop in India and also expanding their presence in India. This is, as you know, as I explained it’s in the auto sector, so the high-end auto sector. So it is primarily in the premium segment, so there are a few players, but the growth is upward of 40%. So there is definitely poaching, which happens across this sector.
X-cars, find itself as a target for other employers seeking to recruit or expand in India. X-cars has a healthy balance sheet and has met its commercial target the last three years, but the HR challenges which they face… they faced, rather, was… looks to derail their track record for the last few years. So the challenge, which they’re facing now could probably set them back in the next few years if they don’t address them as quickly as possible. So that’s the problem, which the organization is going through.
Something about the industry, why does the talent shortage exist in this old industry. Being one of the oldest industries in India, but, sill, there’s a talent shortage. I think there is a shortage of CXOs and CEOs. Again, the auto sector has probably not been as open as the other sectors, so you’ve not had a high competitive environment. And also the environment has been compared the last few decades, so it’s not really attracted the right talent with the right vision. And also a fairly manufacturing-based industry, so they’re not really attractive or probably had innovative people-centric approaches or practices.
I think I was just going through the list of CEOs, about most valuable CEOs in India, which is probably this as well. The top 50, not one CEO gets mentioned from the auto sector. So that’s where we are. And I think non-integration of technology in business imperatives and as a sector, there’s been a growth phase, so that technology interventions and technology innovations have not really been keeping pace with the growth nor has it been a prime focus for the sectors. So let me give you an example.
I think if you look at an entry-level car in any of the developing countries and compare it to India. The Indian car will probably rank at least five years or eight years behind, in terms of the technology, which is going through an entry-level car in any of the segments but more so in the luxury segment. So the technological interventions in the automotive sector are lagging behind not just in the product and also in the process in the customer-centric approach of the environment.
You walk into any of the auto company, a sales office, and you will find very rudimentary technology being used. You still sit and fill out a form, a customer requisition form. Which, even in a restaurant, you’ll find a handheld — people taking down what is the preference you have in a handheld. That’s unattractive to see. I think this has also attracted good quality talent, but there also have been a migration of talent from the sector.
And one of the concerns is also compensation in the sector because I believe the [SP]… focused on the manufacturing of the product and not so focused on the marketing and the delivery of value. It is probably not being as competitive as other sectors, in terms of compensation.
I think the excessive focus on quantitative than qualitative results I think that’s also because the focus is on numbers. And they’re also not really focused on research. Rather than looking at research for India, specifically, it’s a derivative of a product from either in South East Asia or in any other developed market. So most of the products which is used is a derivative of a product, which is already there.
If you read a little bit, very few products we see used in the auto sector, even in the high-end, are not direct from India or not researched for India. It is a derivative of a product, an X or Y successful product, either in the South East Asia, or in the European, or the U.S. market.
Moderator: This is interesting. Arul, this is very interesting. Point number four is very interesting, right? Because this also was visible when we did an assignment with India’s… one of India’s largest automobile manufacturers. And lack of… I mean borrowed technology was one of the biggest factors why there was mass attrition amongst the VP [SP] ranks. VPs did not want to stay just because there’s nothing for them to learn. This kind of corroborates what we have also seen in our assessments with this giant. Yeah, absolutely.
Arul: Yeah. And this also leads to a talent splurge [SP] because you are not allowed to change certain things. You are working in a very strict framework. So you can’t question some of the things which are there. It may or may not work in India. So what really happens? Talent gets splurged [00:11:23] If I can’t change anything, then why am I here? So that’s the focus.
I think another point is, I think, it has also not projected itself as industry of choice.
Moderator: Yeah, that’s also in here.
Arul: In fact, it’s probably not projected itself as an industry of choice, and probably not positioned itself as an industry of choice. Attracting of talented professionals is a challenge. These are the shortages in the auto industry. Maybe it’s a little generic, but it’s most specific to our sector as well, which is the high-end luxury sector.
I think before we got into the nuts and bolts of understanding the problem statement, we went into some of the quality checks or reality checks to see where we are and what we needed to do. We looked at about five areas, which is tried looked at where attrition is the highest? Is it in the senior, middle, or within the lower management level? Is it poaching is rampant in a specific skill set? Or, is it across? Or, is it only in a certain service area? Or, in the sales? Or in the aftermarket support or in pre-sale support or customer service — where I would see challenge lines?
So that was the big check, which we did? And, also, we looked at what is the philosophy they had? Was this pay-for-performance more than recognition? What is the whole management structure? Did it exist? Is it being effective? What are the challenges we still had in the past related to this area? These are all interlinked.
I think the next focus in this: Are compensation competitive within the industry? Because, obviously, as I mentioned earlier the challenge is, again, outside industry. But there are also challenges within.
Within the industry, are you competitive? How much are you listening to the employee voice — the customer satisfaction surveys or the employee satisfaction surveys? What does that tell us and what are the issues, which this particular organization is going through from inside, from what the employees are telling us, in terms of what the challenges are? Or, what are the concerns with your car?
What we also did was we developed a sample survey of employees who are young in the organization, which is less than six months. Probably a little older — one to two years? Also looked at employees who left the organization in the last two years.
And did a quick sample survey to see what’s working well? What is not working well? What can X-cars do to improve retention? Why did they leave? If things have become all right, will you come back? What are the things, the top three things, which you would like to correct?
So these are a few things, which threw up the questions. I think the challenge was to look at are the 20/80 rule, to look at… obviously, there’ll be a plethora of things. You need to cracks [SP] it and see what are the top five or eight things, or, 10 things which you’ll focus on to drive maximum results? So I just go up to the next slide.
And this is where we are… where we were. I think I looked at data for the last three years. So what you see on top is the attrition percentages, which is for the monthly basis. So if you look at it, it’s quite scary because some months we have 60% or 80% some months. And on average it’s about 35%-40%.
What you’re seeing is, I’ve given you figures up to 2015, but the trending is trending downward beyond that so that’s what it is.
So I think what we also saw the peaks were end of the year and also middle of the year, which is April to June. And towards the end of the year, there’s another spike. So what we also looked at was that at the middle of the year is the appraisal cycle and the competition cycle — so that seems to be a challenge. And then the end of the year is, again, the bonus cycle — so that’s, again, becoming a challenge.
So we looked at two peaks, which we had to address which is related to compensation. And some of the key actions which we took I think within that organization is…I’ve listed on some of them… on most of them, but some of them beyond that we can also discuss. I think that one of the things, which we felt was lacking, was a communication within the organization. So the challenge was to communicate what is the vision? Where are we? And, where are we going? And what status are we in?
Everybody needs to know what is the current organization’s status, and what are the key challenges, which the organization is trying to achieve? I think no news is bad news. So that’s where we found lack of communication is…left a vacuum where [00:16:46] more rumors were floating saying that we’re doing badly. We’re doing good, here. We’re doing badly, here. We lost market share to the competition. We are selling a number of cars. All sorts of communication takes place if you don’t have proper communication.
So we started putting down a communication platform where we had a monthly communication platform, and a quarterly communication platform, and an annual communication platform. So they’re just directly focused on what are the vision? What is the status against monthly or quarterly results? And what is trending, and what are we trying to do in the next two months or three months? And, of course, the functional updates. So that was, there was an update from various functions and this is an update on various initiatives, which the organization is trying to put.
One of the key challenges, which we looked at is, we were also looking at competitiveness across the sector. So we had to do a quick correction, in terms of competition for the short-term or in the long-term? When I say short-term, it was pure quick and dirty fix-it-now approach where we looked at quickly fixing the variants from the median in the sector to look at where are the…which levels of which roles where we are way off from the median. And we took quick action to bring high-performance closer to the median, and that was the first approach.
So we also found when you see the high-performance we looked at data for the last three years. We looked at compensation performance data for the last three years. We looked at, what are the target achievements, and whether the targets was qualitative and quantitative achievements. So the last three years, data were taken. And then we looked at, well, who are the high performers? Where are we? Where are they with respect to the median? So we tried to look at how fast we can bring them up to the median with the market? And then, that was the quick-and-dirty part.
And the next was the annual appraisal cycle, which goes on by March. So we looked at immediate correction and a quick correction during March, which is within the industry norm. So I think we also brought in a performance management practice or a performance appraisal system, which was revamped…make it more objective. And also set within rather than top-down. So every employee had a target sheet, which he or she was privy [SP] to in the system. All this is possible because we also had a decent HR system. So communication and decimation of information is faster.
And we also just not then look at competition. We also looked [00:19:52] of designation and grading. Where are we, in terms of grading and designation because the designations were quite different from the sector designations, which we encountered.
We were calling them managers, whereas in the sectors people were called general managers or vice-president within the same level/within the same role, a similar role. A station manager was called Vice-President. Whereas, we were calling them managers. So there was a huge differentiation of what competitors are doing and what we’re doing?
I think kind of one of the areas, which we looked at also, how do you increase a variable payout, and how could you make it effective? And the sector, by itself, was moving towards a more variable pay because…and we were not as competitive as the other players in the sector so we had to very quickly correct that. The sector was moving towards a 40% to 50%, we were at 20% so we had a huge gap to catch up, so we quickly corrected that.
We also looked at the HR policies and how can we be competitive in the market? And not just compensation, we also looked at reward and recognition. How do you create an environment of competitiveness? And how do you reward behavior? And how do you create an environment just not focused on people earning money by the end of year of competition, but how do you recognize and reward behavior during the year so the performance and behavior gets repetitive?
And next we looked at talent management, identify the core talents I would need, and potential of the talent to look at what are the top 20 or 20% of the people, of the talent, which you have, which you need to retain? And where are they, in terms of XYZ factors, compensation and learning cycles, and all other factors, which are related to the retention?
And, also, we looked at…all this is fine, but when the rubber hits the road, I think what the employee experience is, is a supervisor, or his immediate manager. So we said, we will equip him to be a better manager. So we also looked at how do we get them trained as leaders rather than just pure managers. So we initiated an I-Lead program, which is related to how do you then lead a team? How do you then lead a team of group members or managers, or how to you create a business environment for people to prosper? So these are the few initiatives which worked well. And I think by the end of the year…we started at an average. Look at the trends, it’s pretty scary because we were hitting as high as 80% and 60%, and an average with about 45%.
And we started our initiative sometime in January, and by the end of 2015, we were able to bring it down to 20% on a monthly basis. So that’s where we were by the end of 2015. So this is the live case, which we went through and some of the models, which you can probably look at, I think. My advice is keep it very simple. Don’t complicate things for your employees nor your management to understand what you’re trying to do. And to me, I think as simple as it can be, it’s better understood, better communicated, and better related, too.
I think, start with recruitment. The primary focus is set your expectation in recruitment. Build a strong crowd culture. If possible, revolve it around a global brand. If you have the opportunity, have a standardized recruitment process. Even a simple process of XYZ steps is fine, but have a standardized process. Hire people and manage their expectations, I think, are the most critical part. If you can manage their expectations when you recruit them, your retention is a byproduct. Be clear on what the organization stands for. What will they experience in the organization in the next six months to one year? Give them a reality check. If you don’t have something tell them you don’t have. If you have something, talk about it. Make sure that they are proud about it. Look at a total of what offering, don’t just go by base salary or fixed salary. Sell them the whole package, which is the fixed salary, variable salary, the benefits, the reward and recognition programs, the learning opportunities — sell them the whole package.
Standardize your on-boarding. I think on-boarding is the most critical part. If you get that right, I think your initial battle is won. Get your on-boarding process, bring out that wow feeling in your on-boarding process and have a clear performance management system. People see through it during the first six months. If you have a weekly performance management system, people see through it and they will quit. For the high performers, if they feel like they are not being rewarded or they’re not going to be rewarded by the end of the year or they’re not going to be recognized for their efforts, they will quit.
Have a strong management development culture. It has to be with the ownership for the management. Do not try to do it on your own. Please get your CEO to endorse it. Let them own it. See, performance management, people management, attrition is not an HR problem. It’s a business problem. The most impacted people are the business people. We are enablers. I think, create the environment where business takes ownership of the management development and the performance management cycle. We are the initiators of the process. I think the business has to own the process. It is ultimately their performance is going to improve if their team performs, yeah?
I think, create an annual, at least an annual review. Acknowledge [SP] your talent, create a reward and recognition program. I think, create… [00:26:19] one benchmark, but you can have higher or lower, depending on where you are. Create a sense of ownership for the organization, create a benchmark where you can create talent from within and create a management-based strength where you can recruit… any replacement can come from within.
And I think any talent, any talent, which you identify, do not expect them to do the same thing over and over again for the next one or two years. Create development opportunities both, within your company and also internationally. Give them an exposure beyond the four shores [SP], which you can show them. I think they have to look at…you have to look at a global opportunity for them and look at what will work well for them. And I’m sure that they will [00:27:17] back from various subjects that you did. Create an environment where they think global rather than local. So these are a few things. Make it very simple so people can understand what you’re trying to do, yeah?
The next slide is some of the interventions, which I thought… I already covered some of them, but probably a look at some of the interventions, which work for us in that environment, and also which helped us to review the attrition and retain talent, yeah?
I think some of it I’ve covered in some detail, but I’ll just run through it just to give you a recap. I think talent attrition I’ve covered. They will manage expectation and pipeline. I think one is, manage expectation. Always plan for your attrition. Do not expect 100% retention. In this environment, in the [00:28:20] environment it is difficult. So plan for your pipeline, look at your channel and system, look at proactive mapping, map your talent.
Suppose you have X position, which are critical in your organization, what is the market mapping? Who are the people who are competitive in your sector who you can identify and map and attract to your organization? Also, look at, how can you back fill [SP] with fresh talent, because I think more and more focus will be on fresh talent. So have a GT scheme or a management training scheme. Get your employer branding right. Because if you don’t get your employer branding right, your talent acquisition or talent attraction is a challenge.
On learning development or training and development, get your on-boarding induction right. Get your leadership academy to train your people. I think as you see the business cycles are getting shorter so people will aspire for bigger roles. And unless you have a leadership academy or a leadership learning cycle where people can learn and develop to be better leaders, you will find a huge gap where business is growing but people have not grown to take up roles to handle those businesses. I think, the involvement of your leadership team to train is critical because I think involve the leadership team to be trainers in this program. I think, get management to take ownership for the learning and development rather than HR being ownership of the learning and development.
On comp and benefits, we talked about total reward philosophy. Be competitive in the market. Wherever you want to benchmark, communicate your benchmark very clearly. If you’re benching on 58 percentile, communicate that very clearly and be truthful on what you’re saying and be very clear on where your benchmarks are. And, get your reward and recognition scheme in order because you can’t win only by money — paying money by compensation. I think you need to have a clear, robust reward and recognition scheme where you’re able to retain people with using the soft aspects of reward and recognition.
You have a clear variable pipeline because that’s where your high-performance or high potential employees have an opportunity to earn much ahead of [00:30:55]. So have that retention strategy, which can be used intelligently because you can do a telescopic payout or immediate payout, depending on the challenge, which you have in terms of attrition. Have a clear leveling structure because it’s important to get a scientific structure, which could be through any of the leveling process either has or [00:31:26] or any of the companies. So have a clear demarcation of where the levels are and clear roadmap or career path for a high-performer to see for himself where he stands and what is the career path, which he can take for his future.
Talent management/performance management system I think have a talent management process. Have a career path that you need through all of this — these are critical. People who meet the roles of critical talent should know where they are and what they have to do to get ahead. And have a clear career path on what are the skills, which are required for the future roles so they are clear where they are. And have a clear talent management process to identify what are the talent, which you have. And from there, build a career path from there.
Have a succession plan to keep track of key positions. It’s imperative because, I think, if you don’t have a succession plan, you’re actually writing off your organizational future. So it’s critical to have a key succession plan for the next two/three years. So you look at least the two years [00:32:43] to look at what are the succession plans and what are the successes you have and what career paths you want them to take.
Engagement, I think it’s critical because in today’s age, I think it’s [00:32:58] so you need to have an engagement plan beyond just four walls with the organization. Use Twitter, use social media, use it to connect. Create an environment of info with employees and use to it connect with the organization. Yeah, the fun and games are fine, but I think it’s important to connect with the organization rules and vision, which the organization is trying to drive. And that’s where the engagement happens and the performance meets the vision as well.
I think have every leadership connect with employees. It’s important to have leadership to connect with employees. The employees hear it from the horse’s mouth where they are, so that’s critical. So these are the few things I thought I would share. That’s my last slide. I think beyond this, I think I would like to hear from you, what are the challenges and probably deliberate on what other possible things, which you can probably discuss or initiate in your organization. I’m sure you also have your challenges in your organization, which are similar, probably, are quite diverse as well. So I just thought I’d make this short so we can probably discuss or deliberate on your challenges, which you might have. That’s about it from my side. Thank you.
Moderator: Arul, hi. Thank you so much. Thank you so much. The questions have started coming in, Arul. So what’s on the slide, which where we saw all those graphs, is there a breakdown, in terms of high performer also? I know this is a cumulative figure, but if you could also break it down into what was the pie, in terms of high performers, average, and the low performers — a bit of the 10 performers?
Arul: I think these are, what [00:34:46] the high performers were, probably, if you look at it, in terms of percentages, probably it is almost higher than what figures you see here.
Let’s say… let me give you an example so it probably is easier. Let’s look at a January figure in 2013, which is 47%. The high-performance figure would’ve been 55%-60%, roughly that figure, so that’s the level. So we were losing high performers as well because that’s where the first exit happened because that’s where the first poaching happens, right? The first level of poaching happens with the high performers. It’s probably true in many industries. So competition identifies the high-performers and starts bombarding them with various options which they can offer. So that is where the challenge was. I think if you were not just losing the middle and the lower ranks of the performers, but the high performers were the highest.
Moderator: Sure. [00:35:57] asks us, Arul, does it help if organizations start paying retention bonuses? Is it good for the long run, or is… is it good for the long run or it has short-term benefits but it might backfire, eventually?
Arul: See, I think a retention bonus, it depends where? Obviously, it is not meant for everybody. Even within the high-performers, you will differentiate, in terms of who gets the retention bonus. Retention bonus, what I’ve seen is most traditional industries have stayed away and, especially, in this sector, most of them have stayed away. Though some of them have retention bonus. It’s only exclusive to a selective few. So you will find retention bonus even in most other sectors too, above a certain level, above management level. And it’s also excluded for a selected few, depending on the performance the last two years and then looking at what are the contributions, or what is the future of that employee in the organization? What do they expect? Is he a talent? Is he a high potential? Then you look at retention bonus.
Actually, retention bonus works both ways, both, for short-term and long-term. The long-term retention bonuses are ESOPs [SP] and other long-term payoffs, which happen even as a bonus. And the short-term is, you retain for one year, you get X amount. Beyond that year that amount will be renewed or even discontinued. So that’s up to the organization to look at. But it is, in my knowledge, it’s for a selected few. It’s not for everybody.
I think retention bonuses are here to stay. I think most companies practice it because they want to retain talent, at least for the next two/three years on a short-term basis or a long-term basis. It’s an important tool, which you use.
Moderator: And, Arul, this is my own take on things. We’ve been talking to a lot of automobile HRs and CHROs and top executives in HR. So as you said, there’s a tremendous talent scarcity. And when it becomes even more grave, as in automobile, performers tend to understand this fact. High-performers, they know that they’re critical to the entire [00:38:28]. They also know that somewhere there are people who are looking out for them. And then they set up expectations. As compared to other industries, it sometimes borders to impossibility, there’s so much of expectations high-performers have in automobile from their own [00:38:52].
How do you negate this? How do you ensure that it’s fair play on both sides? How do you ensure that there is no set precedent, in terms of bending your back for one particular performer and the other performers also see this and understand that, “Okay, the organization can be held at gunpoint?”
Arul: See, I think [00:39:17] it’s a tricky situation when it comes to scarcity of talent. There’s scarce talent, but you need to retain the top 20 talents, what you have, which is very scarce in the industry. I think it’s important to diversify the risk because I think it’s important to get somebody second in line playing in that skill so that you are not left high and dry when that person moves out, eventually, if he moves out. But I think we make all efforts to make sure that he stays.
But I think you need to have a risk management practice as well to look at how you can balance the risk, in terms of creating another talent pool around them so that he or she is not the only sole owner of that process or that skill. So you’re paying people abroad, or you get an external willing to train these X number of team members. [00:40:16]. But within that period of one or two years, you need to retain the guy as well, so you have to be flexible in those terms to look at one or two year retention. Beyond that, your risk is covered.
So I think, have a clear risk mitigation plan. I think, create an umbrella around him where you can mitigate the risk with additional people who are learning that skill or learned the skill or trained in that skill, which can probably mitigate your risk of that person leaving. And worry about that. I think you need re-fence the guy. It is not always money. You will sometimes…small things really work.
And I remember an example of an employee who was highly skilled and highly talented in the industry who had to leave and…who was wanting to leave. And the main challenge, which he had, I think, his family was not settled and his wife was not able to find a role in that city. So simple things like that, these are small things but it worries him because he or she is not settled at home so these are a few things, which you need to look at.
And then you need to know his pulse, and it is not just…it is the top 20 people in your organization, so you need to know their pulse. Look at what is working for them, what is not working for them, what will make them stay, what will not make them stay? What are the dynamics which are working around them? I mean you need to have some intelligence to look at, which are the companies, which you can [00:41:57] and then look at what are the mechanics, which you can build around him to make him stay. So there are a few things that you need to look at. I think, money alone will not work. I think that’s my experience. You need to look at factors beyond money to retain employees as well. Did I answer your question?
Moderator: Yes. Yes. Yes. Yes. [00:42:20] asks us, would you like to recommend any tool helpful in identifying hi-pers. So, Arul, before you come to this, it’s a little humorous here because, actually, we are meant to do this. I mean our assessments have been identified as high potentials in around 30 industries now. We have been… we are aligned with the new age competencies and our assessments are based on behavioral interviews, focus group discussions, and structured two-on-two interviews where we identify what makes a high potential different from the others? What other, the skills and the attitudes of a particular high-performer, which sets him apart from the others in the organization? So we, at Mettl, have been doing this, for now, four years. So we are one. Now, Arul, do you, also, can shed light on some tools where…or some assessments may be where high potential identification is easier. Obviously, beyond the performance metrics, which are displayed in the organization?
Arul: Sure, I think one advice I will give you is I think have everything integrated. High-performance doesn’t start with a performance management system. High-performance starts with the recruitment. When you identify talent to recruit in the organization you need to hire high-performance employees. It starts with the recruitment process. Start with who you recruit, what competencies you look at. Call it whatever — competencies, or skills, or behaviors — whatever it is? What are the skills, which you want to recruit in the organization, and what levels would you want? What level or ways of what you need? And then look at how you… you will not get a perfect fit. You will have probably somebody who’s 70% there or 60% there. How do you develop that person in the next one or two years to make sure he or she takes up a bigger role?
Don’t recruit for a job. I think, recruit for a talent, which you can grow in the organization. Don’t recruit a person for a job like anybody can do it. It’s looking for a better job fit, rather than me sitting and doing an interview.
And then use tools to identify your observation and your assessment in the interview process — to validate your observations. If you feel this person is a visionary, I think, look at his visionary skills, and what are the skills you use, in terms of assessment. And numerous psychometric tools available, which you can use. And be very, very specific to your industry. Use tools which are specific to your industry. And, which I would say, practiced and which are relevant in your industry because that becomes accepted much faster because you feel…it’s not that people don’t accept new things, but I think if an industry leader or an industry competitor is using that tool, then it becomes much easier for you to sell that tool within your organization. If you feel that’s not working, please change. I’m not saying that’s a guided [SP] rule. But if you feel that’s not working in your industry or in your company, please change. But look at what are the practices in your industry and then look at what are the best tools available. Then you can start using them.
Look at differentiation. Once you identify this tool, I think, this tool that you use them consistently. Don’t use them only for recruitment, but use them for performance assessment, or performance…leadership assessment, or even your talent assessment centers — use those tools consistently so it becomes part of your system rather than using it only for recruitment or only for assessment.
As far as possible, don’t use multiple tools because then it becomes very difficult for you to correlate these tools and get the real message out of the whole tool. So have one consistent tool or set of tools which you can use. I think, if you have the time and the space, Assessment Center gives you phenomenal data points, which you can use. Again, it’s been deployed well and also it is used well for development. But there are tools across industry, I mean I found whatever I’m working, in terms of industry, there are tools, a plethora of tools available across the industry, which you can use.
And there are viability factors, there’s credibility factors you can probably assess, in terms of industry-specific tools. But, I think, my advice is to… do some research on what’s working in your industry and then look at what tools, which will work in your company. Because it’s important to look at your culture and values and also, your organizational fiber — to look at what will work in your organization? And then introduce these tools. Don’t do cut-and-paste — you will probably find it difficult.
Moderator: But then, Arul, that’s what we have been witnessing over the past four years, that they say…so Mettl is into customer assessments. So we do a lot of customer assessments also. And those customer assessments are created keeping in mind industry context and the job role context. And we do a lot of behavioral interviews, as I said, a lot of focus group discussions. But, even then, companies are very…there is a huge resistance to customizing these assessments for themselves. I mean, as you said, “Do not have a cut-and-paste job.” But it’s logic. Logic dictates that. But there is a huge resistance by companies to get tests and assessments customized. They would want an off-the-shelf product.
And then, once this is deployed and it does not work for their particular industry, A, because some of these assessments are from [00:48:15] organizations and [00:48:17] and the reliability is maybe not very, very up to the mark when it comes to the Indian context and then it backfires. And, again, there’s no measurement used. So I know it’s a little bit off the topic, but what do you say, here? What are your thoughts, here? Isn’t customization the only way to go?
Arul: See, I think customization, as I said when I says cut-and-paste, don’t use because your competition is using. That’s what I meant. I think there are enough standardized tools available, which you can use. But customization is very specific to the need. If you’re looking at the leadership assessment at the senior leadership level, customization is possible because the numbers are few and, also, cost is not a forbidding factor, in terms of numbers. Because if you’re customizing for X number of people, I think, the number’s load in the cost is fine.
But I think the customization for entry-level hires. For example, if you’re looking at entry-level hires I think, of course, it’s certain you want customization because you can’t do a standard tool for a software engineer. You will find it difficult to assess specific skills you’ll need in your organization. So you probably would like to customize the tool to your competencies and skill level that you need, which is where I think you need to… I think you need to, even to sell it, sell it, in terms of economic viability rather than looking at… I think if you couldn’t see at any level the tool is used as a validating factor rather than your…than I guess a known factor. So I think that’s why probably most HR professional use the tool less. Is the result of this tool or the assessment, is it validating my observation in the interview or my observation in various interactions I had with the employee? If it’s not, why? What else do I need to look at?
So that’s probably… so if you’re looking at the validating factor, the cost also becomes a factor. So you need to make it competitive as well. At the same time, at certain levels customization is a must because you are looking at specific levels that’s specific to that company. So I will say it’s a 50/50 opportunity to customize and 50%, probably, you might use it without customization.
Moderator: [00:50:54] asks us, what is a healthy frequency of HR connects? I mean she’s pointing…is a one-on-one connect with employees a healthy frequency? Is connectivity more often raising unnecessary expectations and concerns of employees? What should be the communication frequency, in a sense?
Arul: See, I think it depends on your…if you’re looking at HR connect, at least once a month with your core group is critical. I think, depending on your talent pool that you have. If it’s spread across the country you can’t connect every month. At least once in a month is a decent time by which you can connect with your talent pool. Obviously, when it’s a large concentrated environment where you have a captive audience, probably, it can be a sample group can be used once in 15 days, also. But I would say once a month is good enough. And it gives you enough time for you to react to the concerns, which employees have as well before you meet them again the next one month.
My advice is no more than 15-20 people. Then, it becomes a crowd, and a crowd gets difficult to manage. Ten to 15 people is easier to connect. One-on-ones is more for talent connect. So if you’re looking at talent connect, depending on the time and schedules you have, probably you should have at least one or two meetings with every talent between the appraisal cycles. I don’t know how many cycles you have. Normally, organizations have two cycles in the year. So at least one or two meetings between those two cycles is what I would recommend for talent.
Moderator: [00:52:49] asks us, Arul, can you expand your initiatives on I-Lead and I-Lead Plus? I mean content, focus, GPS [SP], and the general effectiveness of these programs?
Arul: Okay, I think what we did was I think I-Lead is the first-time managers, which is primarily focused on the immediate managers above the front line. And I-Lead Plus was for middle managers. And I-Lead Prime was for leadership levels.
I think the content of the program was focused around the leadership styles. We assessed them before that. And then we looked at what are the concerns/the challenges, which they had? And then looked at designing the program around it. So there was no fixed content, which we had to develop. I think we had to develop more from the assessment, which we did. And then looked, what are the areas in a relationship? Again, we had a well-defined competency for our frameworks, so we looked at the competency framework. And, what are the leadership qualities, which we want our managers to exhibit? And then looked at, what are the areas, which the gaps, which we found on the assessment? And then looked at the performance data, married both, and then looked at what are the areas which we want them to rethink?
Obviously, it cannot be done in one program so it was a three-year cycle. So it started with one cycle, then it goes on for the next two or three years. So it’s a cycle that goes on with learning, with application and learning, and application and learning — so that’s how it happens.
Moderator: Just let me rummage through a couple more questions. Just give me one-second, please.
Moderator: So [00:54:52] now asks us how to identify and distinguish between two high performers and when the pay is more or less equal? I mean I can’t understand it just off this question. Maybe he wants to understand about if there are two high-performers and they’re in the same pay scale. I think, he wants to understand whether there should be different retention strategies for the two. I’m still… [00:55:22] if you could also just type in the exact question? Yeah, he says it’s true.
So he wants to understand, if there are two people who are high performers and both are in the same pay scale, would it help to have different strategies or dynamic intervention strategy for every such individual? It’s a very micro-level view I think, Arul. Is it possible, a dynamic retention strategy for everybody?
Arul: Let me address this. I think you pay for performance, you differentiate on potential. You will pay for performance, in terms of high-performers. See, performance is a reflection of your exhibit or your output for that year. The potential is what you invest for future. So my advice is to pay for performance. You might have two equally high-performing employees, but I’m sure the potential could be different. The potential of Mr. X is higher than Mr. Y. You differentiate Mr. X against Y.
If you are saying that both X and Y are the same potential, then you will differentiate on roles. Whether this role, which he’s doing, what is the role which he’s going to do in the future for me, is that critical for me, as an organization? If that is critical, I want him to be retained. I will differentiate them in cost. It is not cost only by fixed salary. I think that’s why you have the variable paid concept. That is why you’ll differentiate variable paid for various roles. Because there are certain type of high [00:56:56] roles, which is in your industry.
For example, a sales role is definitely higher variable pay in the client rather than on [00:57:05] role because our industry operates like that. A sales guy can earn twice as much as a base salary or even 100% of it… a good sales guy can earn double his salary by the end of the year. A great guy can triple his salary by the end of the year. So that’s competitiveness you want to build in your variable pay.
So when you build your variable pay package you will need to base it according to the roles a person has. So he or she gets, if he’s a high-performer of his team, he’ll be the top quadrant of the performance. So he will automatically get sucked into that high retention variable pay quartile. So he or she will be… and he will get retained, in terms of cost. But if you really wanted to get performance differentiation, I think I would say, pay for performance, differentiate on retention. Does that make sense?
Moderator: That’s a great part, absolutely. If I could recap the session, this is the hero statement which we’ll be coming out with. I’ll take one more question, Arul. And there are some more questions remaining in the stack, which our team will mail you and we request you to answer those questions over email to the respondents.
Yes, there is… we could see in the graph that the overall figures come down and came to sub-25 levels. But, again, somebody asked then, what is the overall pie of the high performers and average performers? Then there’s a question there, what was the pie when it comes to 25%, in terms of high performers then?
Arul: See, I think we started losing less of high performers than average performers. So we were able to retain high performers much higher, at a higher percentage, than the low performers or average performers, which was the reverse when we started. When we were losing higher performers and lower within the medium and average performers. When we ended, which was in 2015, we were losing less of the high performers and more of average and low performers, which was the reverse, which we saw.
Moderator: And one last question and this is my question, Arul, to you. So, for instance, there are a lot of measures you have deployed here, in this particular case of X-cars. For somebody to pinpoint the exact [00:59:41] of a particular intervention in terms of enabling retention, how do you do that? I mean there are lots and lots of interventions HR teams deploy. But is it possible to numerically quantify what measure had the highest impact, in terms of retention?
Arul: See, I think this is where your employees are aware and your wiser [SP] employees and your…on your employee connect tabs. You look at it and also the employee connect for two years and what you’ve seen now, after all the interventions. What are the factors of success of these interventions came out very clearly? The employees, I’m sure, will tell you, “This is working. This particular initiative was great.” That shows that you hit the nail and your ESS surveys or your Employee Satisfaction Surveys gives you that direction of where… whether you’re heading in the right direction. And that gives you a clear indication of where you are and what initiatives, which you’ve done in the last one year or six months, which is good?
And your employee connection is most critical when you do your employee connect once a month, you will know what are the initiatives, which has worked? What has not worked? And that itself was indication of, let’s say if you’ve done 10 initiatives, out of that, probably, all may not succeed. But, at least, if seven or eight succeeds, you’ll probably pick 80%, which is a good factor to start with when you’re driving initiatives.
But I think what is important is going to full-on to your initiatives. Don’t make half-hearted efforts because your employees sees through it and he or she looks at it as a waste of money, waste of time, a waste of your efforts. You’re not only wasting your time, you’re wasting mine. So that’s the key fact you normally would get. So be highly committed on your initiatives and employees will follow when you show passion and pride.
Moderator: Arul, with this, I would have to do a wrap here, Arul. It was a great session. A lot of learnings for everybody out here who’s come and taken time out on a Friday, considering that this follows the most busy month of the year, which was in March. And I’m sure a lot of high potentials have been going out of their own organizations and these things so as I said, it was very topical and very relevant to them right now.
There are a few questions, Arul, as I said, which are left unanswered. My team would pass it over to you and I would request to you to, please, answer them to the respective attendees. Thank you so much, Arul. Any parting thoughts? I’m so sorry. I could not hear you.
Arul: Yeah, I just said I’d be more than happy to answer any number of questions. You can give my number, they can call me up as well, so I will be able to speak to them.
Moderator: Sure. And, Arul, any parting thoughts you might have had here?
Arul: I think I’ll just sum it up in a simple manner. I think, keep it simple and differentiate on performance/potential.
Moderator: Yes, that was a bubble statement. I mean we, us guys here, at Mettl, like to recap every webinar with one line and it sums up the entire webinar. And this is it for us.
Arul: Anything else from the audience? Anything else, otherwise I…
Moderator: Arul, the session is over. Thank you so much.
Arul: Thank you. Thank you. My pleasure. Yeah.
Originally published April 2 2018, Updated June 16 2020