1) EZI – Charging more for their recruitment than they charge their clients (1,00,000 for them

vs 90,000 for their clients)

2) They had background in business and consulting (McKinsey). But still they required some
sort of generic training.
3) What is the approximate average turnover ratio at EZI? At Competitors?
EZI had an average turnover ratio of below 2% per year. The industry average was around
30% per annum.
4) Imperfections for partner consultants –
Lack of Controllability (-) – Compensation based on firm’s overall profits and seniority, Lack
of accountability
Alignment (+) – No individual performance pays, all partners had same share in the
company, focused only on clients
Interdependency (+) – Profits split across entire firm
5) Management time spent in performance evaluation
Spent no time for performance evaluation of partner consultants and no track of their
numbers, Competitors spent more time

Non-partner consultants – Lack of controllability because of qualitative metrics and

managerial discretion

Why integrity and character important for the consultants they hire?

Because there are no checks and tracking of performance once they are in.

They had fixed fee policy for clients. They charged more than competitors mostly.

Collaboration is important because it’s a multinational firm. [Orders generated in one country and
we are finding candidate in another country]

What are their problems?

Misalignment and lack of Interdependency

There is a relationship between three imperfections.

We cannot minimize all three errors at the same time. If we minimize two errors, the other error will
go up.

In this case they are trying to minimize alignment and interdependency errors and they are trying to
manage controllability error through hiring. That’s why they spend so much on hiring their
employees (100000) so that they hire the right people.
Eg: If there is 100% group evaluation, then there will be some people working hard and others
slacking. How do we control it? By selecting candidates in PGDBA admission process who work on
their own without monitoring.

Same like above: Government sectors – Individual performance is not tracked

But why is productivity low in government sector?

Because of lack inter-linkage between HR policies and company strategy

For Naukri.com what kind of strategy do we need?

Measuring individual performance is important

Controllability error will be minimum.

Recruitment – Don’t spend much time and money for hiring. Give clear target. Not much training
required

Why is EZI looking for review?

Because of where competitors are going. And EZI wants to change firm strategy and HR strategy.

Interlinkage between HR policies and company strategy

Performance management system must be consistent with training, development and promotion
policies which needs to be consistent with hiring policies.