You are on page 1of 10


As business evolves, so do the various functions. The change and impact of HR policies at various stages of the organization also changes. This article looks at the change of HR policies at the various stages of the organization(Start-up, high growth stage). The Study takes in the dynamics of policies in hiring, compensation and retention during the two phases of the organization viz. Start-up and fast growth.

The Start-up stage is the early stage of an organization. The Start-up companies have very limited employees and resources. The size of the organisation is below 100 members. In the start-up stage the organization has very limited accomplishment to show up to the public. The budding stage or the Start-up organization applies different Human Capital management policy. The major challenge at this point is setting up a HR policy from scratch. Always a pro-active approach is expected to handle situations rather than a reactive one. So the policy making forms the important part at this stage. Apart from policy formation the major challenge here is Talent Management. HIRING In a start-up stage the process of hiring, retention is tricky. As a start-up you lack a brand name and other luxuries of any establish firm. A good financial situation is also absent. And the competitors are established players in the market. So the competition is high and also your requirement The Best Talent Available. Attracting the best talent is the challenge at this stage. The skill set is requirement is also high at this level. The best talent, an entrepreneur mind-set, ready to stretch beyond the normal working hours. And in most case the talent is under-paid. This is the challenge of the HR function at this stage. And the interesting fact is that most of the start-ups may not have dedicated HR personnel. But still the talent management is to be performed. We look for young talents, who are open to learn and have a entrepreneur in one-self; this was the statement from the Indian e-commerce sensation Flipkart. The whole idea is to have the mind-set to learn and experiment. This is the pre-requisite of talent at Flipkart. In most start-ups the hiring is through referrals. The personal bonding plays a key role. The degree of formalization is less. The organizations follow a flat structure as innovation is the key and path for growth and success. Most of the start-up organization follows a Fill Chair approach as the options available are limited. COMPENSATION The Compensation systems at most of the start-ups are through stock-options. The start-up lack the financial liberty and offer stock-options that can be redeemed at later period for the organization. Some start-ups follow informal compensation system. This is not a fair practise as the in-consistency in compensation results in complexities at later stages of the organization. TALENT RETENTION Talent Retention in start-ups is equally challenging. The strategy followed by the organization is to retain everyone. The attrition of a single employee results in bottleneck for the organization. The organization looks and implements methods to retain the employees at

these stages. Increase in compensation, rewards, recognition, a good team, environment are some of the technique used to retain the talent in start-ups. GOLDEN CIRCLE RULE Another good strategy or policy is to use the Golden Circle of human motivation preached by Simon Sinek. According to him the Why,How and What forms three circles and our Human brain uses three different circular areas to process these information. The What is processed by outer part of our brain followed by How and inner most part of our brain processes the Why. According to the study by Sinek, the answer to the Why part helps to motivate people to the best. Starting the job description with Why we are doing this followed by How we are doing this and What we are doing helps to get in the best talent, help to retain the talent. The study of Sinek goes through the examples of Apple and Wright brothers. Apple knew why they wanted to do,How they wanted to go and what they wanted to. Apple believe in doing things different, challenging the status-quo. We challenge the status-quo by beautiful design, simple to use and user-friendly. This differentiates Apple from all its competitors which are equally qualified and have challenging products. The same applies to the hiring. The goal is not to give a job. But to get people who believe in what you believe. When companies hire people to do a job they work for your money, when they get people who believe in what you believe they offer you blood and sweat. The example of Wright brothers to build the flying machine is the best example. In 20th Century Samuel Pierpont Langley was trying to build the flying machine and people believed him to build as he had the technology and financial ability($50000) to build it. But he was never successful. But Wright Brothers dreamt about the progress the man kind had if they build it. They believed in the progress that motivated them to build the flying machine, whereas Samuel was after fame and financial gain. The interested part was Wright brothers never tried to improve their machine, because all they wanted was to make humans fly and they succeeded in it; so they quit. These were the observations from Sinek. To add is my observation about Microsoft and Facebook. Facebook, the most successful social network in the world and the second largest country by Population was never the first social network to come up. There were players like Friendster and many other services. But Facebook knew why they are building it. They were looking for a platform for open and connected flow of information. They knew why they were building it up. Facebook was never the first mover but still they became the largest network in the world. Their mission is still in-complete and so are they continuing the success story. The other story is Microsoft. Microsoft joined with IBM and Intel partnered to build the personal computer because they believed in the capabilities and advantages that a personal computer would have. The success story made Personal Computers in the hands of common man and it became truly personal. But post that, they lost the battle in the online space. They succeeded in the personal computer world because they knew why they are building it.


HISTORY OF HCL TECHNOLOGIES HCL Technologies is one of the two businesses falling under the corporate umbrella of HCL Enterprise with combined annual 2011 revenues of US$ 6 billion. HCL Enterprise was founded in 1976 and is one of India's original IT garage start-ups. HCL Technologies formed in 1991 when HCL's R&D business was spun off to focus on the growing IT services industry. During last 20 years, HCL has expanded its service portfolio in IT applications (custom applications for industry solutions and package implementation), IT infrastructure management, and business process outsourcing, while maintaining and extending in product engineering. The founder of HCL, Mr. Shiv Nadar passed the leadership to Mr. Vineet Nayar. Vineet Nayar joined HCL in 1985 as a management trainee and worked his way up through the company, becoming president of HCL Technologies in 2005. So he has lived through the boom in IT investment, the shift to outsourcing and offshoring, and the gradual maturation of the IT services industry. As he recalls: The history of HCL is a bet on the growth of technology services. Back in the late 1990s, 45 per cent of our revenues came from technology development. We were very good in what we did. But when the technology meltdown happened in 2000, technology spending vanished overnight. So we had to re-invent our business model. He came up with the initiative of Employee First Customers Second. A array of changes were brought out as a part of the initiative getting HCL Technologies back to a key player in the industry along with winning Best Employer awards. HIRING Hiring at fast growing companies is highly selective. The hiring process is well defined through defined and specific requirement. The hiring pattern shifts to more specialists. Most of the hiring is done to match with the core-competency of the organization. The hiring pattern shifts from entrepreneur mind-set to a employee who adds value to the organization and who is dedicated. COMPENSATION The pay compensation of the company shifts from stock-options to pure monetary system. The pay package is in alignment with the market conditions for the skill set. The industry standard is followed by the organization. EMPLOYEE RETENTION POLICY EMPLOYEE FIRST CUSTOMERS SECOND HCL realized that in service industry the value gets created not in the back office but in face to face interaction between the customer and employees. Hence it is important to empower employees so that they deliver more value to the customers. When an employee is delighted, he will delight the customer.This gave birth to a path breaking philosophy called : 'Employee First, Customer Second, termed by Fortune as "The most modern management idea".

Source : HCL They implemented a bunch of reforms under the Employee First policy. SMART SERVICE DESK An automated query resolution mechanism for employees. SSD enables employees raise their concerns for adequate resolution in just three clicks. On an average 31,000 tickets are raised every month. Its a single point contact system for all facilities. The employee has the option of setting the priority level for the concern and the response improves with improved priority order. The employee can give feedback regarding the solution. A bigger team is deployed to give quality output I4EXCEL Employee performance portal which handles end to end appraisal process of all employees. 24,000 appraisals are completed in 30 days in 2007 vs 9,200 in 45 days. i4excel transparently shares ratings and views of managers manager (reviewer) with the employee. DIRECTIONS Directions is an annual company-wide event that takes strategic discussions out of closeddoor meetings to all employees. The CEO and the leadership team present at these meetings share the vision and strategy of the company as well as respond to questions in interactive sessions. Directions allows everyone in HCL to speak the same language and understand how their individual contributions fit in a larger organizational framework. Vineet, CEO HCL Technologies takes two weeks each year to prepare for the event and spends another two weeks attending Directions events across the world.

U&I A two way dialogue mechanism between CEO and the employees. Nearly 90% questions have been answered by Vineet himself. He spends 7 hrs. in a week replying to the queries raised. U&I started a reverse blogging, where in CEO posts questions to the employees EFC Employee First councils work on goals that are of common interest to all employees and also help maintain a balance between work and life. The councils allow employees to unleash their creative talent. Last year over 1,500 events were conducted by EFC councils. WOMEN FIRST COUNCIL The purpose of this council is to focus on women development and to create an inclusive, supporting and caring environment. A women exclusive website was launched which has information of all women related policies, safety and security measures, work-life balance techniques. CAREER POWER A comprehensive career planning and development program, which provides a framework where each employee is empowered to plan desired career path. O2 LEAGUE OF EXTRAORDINARY O2 is a system created in HCL to recognize high performers. The league constituted those employees who have been outstanding performers since last 2 years.

XTRAMILES HCL created a unique reward and recognition portal where all employees can see extraordinary efforts & performances and appreciate them at a click of a button. The purpose of Xtramiles is to ensure timely and public instantaneous recognition of employees who have displayed exemplary performance. MITR MITR lends helping hands to all HCLites and their family members by providing them expert counseling 24X7 on any issue concerning them. GENIE The personal assistant, the all purpose coordinator, the private shopper, the entertainment guide, the travel planer, located within the office premises & programmed to take any request. Genie can manage all trivial and not so trivial chores.

FUN @ WORK It is functional in organizing events in the office on Fridays. The programme aims to create office as an experience more than a work place. WEEKLY POLLS Polls are conducted on weekly basis to gather employee feedback on various issues. The results are shared on the intranet and guide decision making. CATALYST A employee driven team building program, catalyst enables much of the desired work-life balance for his/her team by rolling out various activities in a year. TRAINING HCL has adopted a number of innovative methods of training and developing talent within the organization. The extensive program includes: Five methods Computer Based Training, Instructor Led Training, Web Based Training, On the Job Training and Blended Learning. Four tracks in Campus, Fresher, On-going, Re-skill. Three streams Technical Training, Domain Training, and Behavioral Training. Two channels Leaders Teach (an internal training program), Talent Transformation and Intrapreneurship Development Team.

OPEN 360 DEGREE FEEDBACK HCLs annual survey of 20,000 people across the company rates 1,500 managers on 20 aspects of their performance. There is nothing unusual in running such a process. But what is unusual is that the results of the survey are aggregated and published online for every employee to look at This is a simple change in practice, but one with profound consequences. For the manager, there is nowhere to hide if he or she gets negative feedback. Most managers take the feedback very seriously and make changes; a few choose to move on 360-degree feedback is not linked to the annual appraisal or to the compensation package. It is open for everyone to see, and that is enough to encourage changes in behaviour. MADJAM 2 Make A Difference (MAD) is an initiative to promote innovative ideas in the workplace under which people across the organization offer suggestions and solutions for change. This year, more than 900 HCLites in 377 idea teams submitted business and technology based transformational solutions. Ninety-four of these were shortlisted, based on a poll by their colleagues, to present their ideas to a jury. The ideas selected and implemented are expected to create more than $25 million in value for our business.

MEME MEME is an internal social networking platform created and used by employees to connect, share, learn and grow serves as an avenue to share thoughts and ideas with fellow HCLites. Can you imagine the innovative potential of over 30,000 MEMErs discussing a wide variety of subjects across nearly 700 groups? Through MEME, they address a series of needs of a multi-generational workforce, including aspects of gender, culture, ability, work life continuity, leisure, values, beliefs besides professional problems. GREEN WARRIORS Green Warriors is our employee volunteer network which collaborates with administration and infrastructure teams for advocacy and implementation of green activities. Around 1200 warriors conducted eco audits of their workplaces this year to assess the state of resources consumed in company owned facilities with recommendations for actions that can be adopted by employees to contribute to Green operations. Several of these will be implemented during 2012. SOCIAL MEDIA POLICY (REVISED ON 18TH JANUARY 2012) HCL has revised its Social Media Policy encouraging participation on Social Media platforms and forums as HCL representatives on not. The new policy aims to give a better work place for the generation Y, represent responsibly in online media.

The HR policy of the organization takes different shape at different stages of the organization. They require changes to suite the business goals of the organization and also to meet the employee satisfaction. This document studies only the changes in HR policy in the innovation driven competitive service industry and the technology industry. The HR policies in Start-ups are usually performed by non HR specialists. The lack of experience in HR related activities may lead to decisions without considering human capital management factors. The productivity of the Start-Up can be improved if a dedicated HR manager is in place in the organization. The role of HR can scale the productivity of the startup. The hiring practise of seat filling at this stage can lead to reduced productivity. The reduced attractiveness of the organization leads to employee shortage as the organization is much in its development stage. The fruit of the hard work at this stage is what returned later in the organization. The Golden circle rule could be a better method in hiring talent and solve compensation related issues. A well defined goal could motivate them better than any other incentives. So hiring people who believe in what you believe is a wonderful theory. At the same time, the golden circle rule does not explain the significance of How and What Circle. The theory also does not explain the implication of wrong How and What part even if we know Why we are doing around.

The larger organizations that have a strong HR policy have transformed as the case of HCL Technologies. The organization faced tough times during the dotcom burst. The company was a major technology provider and the organization faced competition when companies reduced technology spending after the dotcom bubble. The HR policies in the organization was focused in delivering the solution and cost savings to the customer. Most companies had operations in India to reduce cost. HCL Technologies was one of the first companies to provide value to the clients rather than cost savings. The differentiated themselves from the competitors by providing value to its customers than cost saving. Mr. Vinit Nayar came up with the Employee First Customer Second approach which is considered as a very modern thought in management. The model focus was that it is easy to get customers but difficult to maintain employees in a highly labour intensive situation. The race for talent was more prominent here. The employee first attitude creates a win-win situation in which the employees are retained and as they are given more importance, they in turn perform well giving Value to the Customers. The new reforms that were added to the organization made it a employee friendly organization and received the best employer awards. The Smart Service Desk provided a one-stop shop for all employees with improved satisfaction level to the employees. Directions and U&I provided a platform for interaction for the employees. They felt more secure with the organization. This can lead to job security in the organization. This policy can make service industry too have a life-long employment conditions unlike the present situation of a job switch once in every 2 years. MadJam provides a robust platform for intrepreneurship enabling employees to drive the business for the organization. The renewed organization compensation and feedback systems give in-sight into performance and areas to improve. The facilities to improve are also provided within the organization making it closer. The policies changes to bring in better work-live balance, women empowerment and leisure activities in the organization makes it an experience rather than work place. Policy change in social media and own social network to interact makes it friendly to the Generation Y. These policies help to provide a better work place for generation Y or the millennials. But the acceptance of the existing generation X to these policy is still not covered. The compatibility issues between Gen X and Gen Y is not cleared by these policy. Most of these policy changes looks to change around the working place in favour of the Gen X. There are many other organizations (eg : Cognizant Technology Solutions) in the service industry which also offer similar employee friendly conditions in-spite of being customer centric rather than employee centric. However the attrition rate of HCL Technologies was inline with the service industry in-spite of being employee centric. The true differentiation the policy changes have got in can be felt only in the long run through the ratio of long term employee associated with the organization.

Organizations follow different policy in HR during its way forward. They change and evolve as the organization changes in size, changing business requirements and with changing employee. The start-up stage when no dedicated HR and HR policies are absent needs a change. The presence of a dedicated HR function and policy gives better shape and helps to streamline the evolution in the early stages. Also this is an area which requires further study. As the organization grows in size, HR policies are required. Also these policies should be already in place and should be framed in a pro-active manner rather than a reactive approach. As the business requirements changes the HR function takes a new stage in the form of aligning the work force with the dynamics of the business. Further with changing work force, the HR policies evolve to suite the work place better for the upcoming generation, shaping the organization the way forward. The HR policies in hiring, compensation and retention changes with change in size, business goals, workforce across organization.


Kim, W.C. and R. Mauborgne (2005). Blue Ocean Strategy. Harvard Business School Press. Greenleaf, R.K. (2002). Servant Leadership. Paulist Press. Peiperl, M. (2001). Getting 360 feedback right. Harvard Business Review, January 2001.

Mr. Reejo Varghese, Ms. Greeshma V : Senior Software Engineer, HCL Technologies Ltd. Employee First Customer Second Worlds most modern management Idea Fortune Magazine.


Submitted By pgp02.084