December 5, 2010

HR policies in tune with Pareto principle

I often wonder why some corporate managers fail to recognize a mundane need for flexibility in organisation wide policies. Recently i worked with a first generation diversified corporate from Delhi  that faced such challenges. This company has presence in construction services industry and have forayed into higher education. Since India is growing economy for the past decade therefore many companies finding it difficult to keep pace with the rate of change. Some are so scared by rapid pace of change that they happen to do more damage in their unplanned  effort to control the flow of work. In there desire to put systems into place they end up choking the growth of the organisation.

The rant for having one kind of policy across the organisation may look pretty rational but it could seriously  stymie the growth. Let us examine a case. All organisations consists of people that have varied level of productivity. As per Pareto' law: its your 20 percent that matter more than the other 80 percent. Therefore its not false to argue that most companies have important 20 percent human resources that would be difficult to replace! So the HR need to have a plan that takes care of the challenge.

How many companies have solved the riddle of having flexible HR policies that could serve the need of both 20 & 80 percent pool?

Sales & marketing have figured a way out by implementing variable performance linked pay & growth path. This would mean that if you are a hard working, no-nonsense guy then you would take home more bucks at the end of the month. But is it enough? My experience at Indian Express Chandigarh, a decade ago  was different. Since the 20 percent guys were in minority the other 80 percentile ganged up against them and forced them out of the company, resulting in huge damage to the growth.

How to safe guard your 20 percent deliverers against 80 percent maintenance guys? If you are a professional who desire to keep your productive force together better have two-tier HR policies.One size does not fit all so its wise to have a two-tier system of management.

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