MIT School of Business

PGDM: 31th Batch

Semester: IV

Subject Name: Strategic HRM

Case No.1

Tony Stark had just finished his first week at Reece Enterprises and decided to drive
upstate to a small lakefront lodge for some fishing and relaxation. Tony had worked for
the previous ten years for the OGrady Company, but OGrady had been through some
hard times of late and had recently shut down several of its operating groups, including
Tonys, to cut costs. Fortunately, Tonys experience and recommendations had made
finding another position fairly easy. As he drove the interstate, he reflected on the past
ten years and the apparent situation at Reece.
At OGrady, things had been great. Tony had been part of the team from day one. The job
had met his personal goals and expectations perfectly, and Tony believed he had grown
greatly as a person. His work was appreciated and recognized; he had received three
promotions and many more pay increases.
Tony had also liked the company itself. The firm was decentralized, allowing its
managers considerable autonomy and freedom. The corporate Culture was easygoing.
Communication was open. It seemed that everyone knew what was going on at all times,
and if you didnt know about something, it was easy to find out.
The people had been another plus. Tony and three other managers went to lunch often
and played golf every Saturday. They got along well both personally and professionally
and truly worked together as a team. Their boss had been very supportive, giving them
the help they needed but also staying out of the way and letting them work.
When word about the shutdown came down, Tony was devastated. He was sure that
nothing could replace OGrady. After the final closing was announced, he spent only a
few weeks looking around before he found a comparable position at Reece Enterprises.
As Tony drove, he reflected that "comparable" probably was the wrong word. Indeed,
Reece and OGrady were about as different as you could get. Top managers at Reece
apparently didnt worry too much about who did a good job and who didnt. They
seemed to promote and reward people based on how long they had been there and how
well they played the never-ending political games.
Maybe this stemmed from the organization itself, Tony pondered. Reece was a bigger
organization than OGrady and was structured much more bureaucratically. It seemed

that no one was allowed to make any sort of decision without getting three signatures
from higher up. Those signatures, though, were hard to get. All the top managers usually
were too busy to see anyone, and interoffice memos apparently had very low priority.
Tony also had had some problems fitting in. His peers treated him with polite
indifference. He sensed that a couple of them resented that he, an outsider, had been
brought right in at their level after they had had to work themselves up the ladder. On
Tuesday he had asked two colleagues about playing golf. They had politely declined,
saying that they did not play often. But later in the week, he had overheard them making
arrangements to play that very Saturday.
It was at that point that Tony had decided to go fishing. As he steered his car off the
interstate to get gas, he wondered if perhaps he had made a mistake in accepting the
Reece offer without finding out more about what he was getting into.
Case Questions
Q1. Identify several concepts and characteristics that this case illustrates.
Q2. What advice can you give Tony? How would this advice be supported or tempered
by behavioral concepts and processes?
Q3. Is it possible to find an "ideal" place to work? Explain
Q4. Give suitable TITLE to the case

MIT School of Business

PGDM: 31th Batch

Semester: IV

Subject Name: Strategic HRM

Case No.2
The Best of Intentions
Cynthia Mitchell just stared at her boss, Peter Jones. She admired him a great deal, but
she couldn't believe what she had just heard. "Let me get this straight", she said. "I
shouldn't give Steve Ripley this assignment, even though he's the most qualified
candidate, because the clients won't let him succeed?"
"It's your decision-and Steve's, if you decide to offer him the job. But I think it would be
a big mistake," Peter replied. "Because he's black," Cynthia prompted." And because
we're automatically assuming that the mostly white farmers in this district won't trust
their books to a black professional?"
Peter flushed. "We don't assume it. We know it. Just ask Betty Inez and Hugh Conley.
They were every bit as good as Ripley. But we - Okay, I was blind to the unpleasant
reality that plenty of discrimination still exists out there, like it or not . because of my
ignorance , they both failed miserably in districts that looked a lot like this one . It wasn't
their fault, but their careers with AgFunds got derailed anyway. I want to give Steve a
fighting chance, and I want Agfunds to have a better record developing minority
managers."
Cynthia sighed. "This feels all wrong to me, Petter, But I know you wouldn't raise the
issue if it didn't have any sub-stance. Let me think about it."
Personal Experience
And think about it she did. Cynthia had flown to Houston earlier inthe week for AgFunds
regional district managers meeting and had been enjoying getting to known her
colleagues over dinners at a variety of excellent restaurants-a welcome relief from her
rural Arkansas district, where the culinary choices ran the gamut from barbecue to, well,
barbecue. She was new at her job, and the other district managers-all white men had
made her feel welcome and offered her survival tips.

Tonight, though, she stayed put at her hotel. First she worked out in the gym, then she
ordered a caesar salad and a beer from room service. While she waited for the food, she
took a quick shower. When she finally settled down to her meal, she found she didn't
have any appetite. The situation with Steve Ripley was making her really tense. It
brought up bad memories. She sat back, sipped her beer, and remembered how her own
career at AgFunds had started.
It wasn't so long ago. A Minnesota native with an undergraduate degree from Purdue,
Cynthia had earned an mBA from the University of Kansan. She wanted to stay in the
Midwest, and she wanted to work with the agricultural community. She had originally
planned to pursue a career with the Chicago Board of Trade, but the opportunities there
hadn't seemed promising. AgFunds-a financial services company specializing in
investments and accounting services for farmers and farmer owned cooperatives-had
pursued her aggressively. She had joined the firm as an investment trainee in the
Chicago office after graduation, just four years ago. Her first year wasn't that different
from being in school; she spent most of her time studying for the exams she had to take to
become a fully licensed representative. She thrived in the competitive training
environment and was considered the top graduate in her class.
The best trainees that year were all vying for a position in northern Indiana. Mike
Graves, a highly successful investment rep, was being promoted to district manager.
Within six years, Mike had turned a declining stream of clients in Indianan into one of
the company's largest and most coveted portfolios. Cynthia wanted the job badly and
was sure she had a good shot at it. Her interview with Mike went well, or so she thought.
She was half planning the move to Indianan when she received an e-mail announcing that
the job had gone to her fellow trainee Bill Hawkins. She was genuinely surprised. Bill
was a great guy, but his credentials didn't measure up to hers. In fact, she'd spent a lot of
time tutoring him after he failed an early licensing test.
When she ran into Mike shortly thereafter, she congratulated him on his promotion. He
seemed self-conscious, and before long he stumbled into an explanation for why she
hadn't been picked for the plum job: "Eventually you'll be a better rep than bill. I know it
and you know it. But this just wasn't the right territory for you. It's very conservative.
Our customers wouldn't be comfortable doing business with a woman. One day you'll
thank me for not putting you into a situation where you'd fail."
Thank him? Cynthia had felt more like strangling him. But, like a good sport, she
offered him some politically correct conciliatory statements-"I'm sure you made the right
choice; you know the territory," and so forth-and kept looking. A month later, she landed
a less appealing but perfectly adequate sales rep's position in a northern Ohio district.

Presumably, the district was more hospitable to women, though she'd had to prove herself
to plenty of crusty male customers. Cynthia had done extremely well in the three years
she spent there-well enough to be considered a rising star at AgFunds. So she wasn't
surprised when Peter, the Houston-based regional vice president who oversaw eight
southern districts in Arkansas, Louisiana, Mississippi, New Mexico and Texas, recruited
her to run the Arkansas district. The new position was a stretch; reps didn't usually get
promoted this quickly, but she felt ready for the challenge.
And it definitely was a challenge Arkansas was once a great district, but it had been
losing customers for 15 years, thanks to a 25 year veteran who had gotten more and more
comfortable in coasting mode. Peter had finally pushed the guy into early retirement and
brought Cynthia in to shake things up. The sales force wasn't that bad; it had just been
poorly managed. But Cynthia desperately needed at least one powerhouse rep. Privately,
she admitted to herself that what she really needed was a clone of herself four years agosomebody fresh out of school who was talented, ambitious and extremely hungry.
She considered recruiting the second best rep from her old region (he happened to be a
good friend), but she wanted to look first at the recent crop of eager trainees. She was
intrigued to discover that Steve Ripley, this year's top trainee, was inexplicably available
three months after the training period had ended. He looked great on paper: a recent
MBA from UCLA, a successful summer internship at AgFunds, a stint over seas as an
economic analyst for the U.S. government. So why he was still available? Poor
interpersonal skills, perhaps? When she met Steve, Cynthia discovered that this was far
from true. He was personable, quick witted, bright, as excellent conversationalist. He
was also a black man in a company whose work force was overwhelmingly white.
She had interviewed Steve just this week, while she was in Houston for the off-site, and
she had ended the meeting wondering, very simply, how she'd gotten so lucky and when
he could start. Within a few hours, though, her curiosity about why he was still available
had resurfaced. When she asked a few discreet questions, her fellow district managers in
Arkansas were evasive; they seemed uncomfortable. The longest tenured of them finally
told her that Steve wasn't necessarily a great fit in some parts of their region and
suggested that she discuss the situation with Peter before she made an offer.
Set Up to Fail ?
Cynthia shifted uncomfortably in her hotel room chair. She poked at her salad with
distaste then scraped at the label on her half - empty Saint Arnold beer as she replayed
this morning's meeting with Peter in her mind.
It hadn't gone well.
"We need to talk about Steve Ripley," she had started. "He's a remarkable candidate.
Why wouldn't I hire him if I could get him?"

"Your predecessor didn't think he was a good fit, "Peter had said gently. "I have to tell
you I think he was right. And it's not because I'm a bigot. I can see you're wondering
about that. Steve's fantastic. He's one of the best trainees we've had through here in
years. But the biggest customer in your district don't want to work with a black guy. It's
as simple as that."
"So if some big customers are discriminatory, we'll let them dictate our hiring policy?"
Cynthia had challenged.
Peter had winced at her remark. "Look, Steve's going to be outstanding. He just deserves
to start out in a more hospitable district. Once the right opportunity opens up, he'll be
hired, and he'll do brilliantly."
Cynthia, remembering the job she'd lost out on in Indianan, then countered by saying," So
Steve has far fewer opportunities open to him than other, less-qualified applicants do."
"I know it doesn't sound fair, and in one sense it isn't, "Peter had said. "But if Steve fails
in his first assignment, it becomes extremely difficult to promote him-we'll be accused of
favoritism or the very worst form of affirmative action. And lets not forget we have
some obligation to maximize profits. I can almost guarantee you that won't happen in
your district if you hire Steve. If our customers won't buy from Steve, it hurts the
shareholders, it hurts Steve, it hurts you. Okay? How is that a good thing ?"
Cards on the Table
Cynthia didn't sleep well that night. She tossed around, half awake, half asleep,
agonizing about what her next step should be. Could she hire Steve against the explicit
advice of her new boss? What would it mean for her career if Peter turned out to be right,
and Steve didn't work out? Undoubtedly the easiest course would be to keep looking,
perhaps to hire her colleague from Ohio, who was, after all, a prove quantity. But that
didn't feel right.
During one of those 3 AM moments of apparent clarity that so often come to insomniacs,
Cynthia decided to lay things on the line with Steve. At 8 AM, she called his house and
asked if they could meet for lunch. He agreed.
"Look, what I'm about to tell you is sensitive," she said four hours later as she faced
Steve over glasses of bubbly water at the Daily Review Cafe. "So I'm taking a chance.
But I'm sure you sense a lot of what I'm going to say, so let's just talk about it openly."
"Sure, What's up ?" He looked both quizzical and slightly disappointed.

"Oh Lord, he expected an offer," She thought to herself. Cynthia took a deep breath and
started by telling him the story of how she lost the job in northern Indianan to a less
qualified candidate and how much that had bothered her. She filled him in on the
conversation with Peter the day before. By the time she'd finished, he was leaning back
in his chair, sipping his water, eyes narrowed.
"I'm not sure what to say", he offered after a pause.
"No need to say anything yet. The thing is," she continued," this is a company where
women and minorities can get ahead. I know that from personal experience. And I
walked in knowing I had to work harder and perform better than other candidates. I'm
sure you did, too. But the folks in senior positions sometimes decide what's best for
candidates without consulting them. I know I resented that a lot when it happened to me.
I don't want to continue that pattern. I'm not ready to offer you the job, but I do want you
to know what's being talked about, and I'm curious to know what your response is."
Cynthia half expected Steve to start selling himself again, as he had during their initial
interview - to ask for the chance to prove himself, even if it was a tough territory. But his
response was more tempered than that.
"As long as we're being open with each other, I have to say I'm not sure. I'd like to stay
in this part of the country for a few years, for personal reasons, but I don't want to take a
job that sets me up for failure. There are other districts in this region where blacks have
done well."
Cynthia was feeling deflated. "So-so you want to withdraw from being considered?"
"I didn't say that, I guess I want to be sure that if you offer me the job, I won't be walking
into a disaster. I don't mind long adds, but I don't want impossible odds," he responded.
Sensing her confusion, Steve smiled quickly, his considerable charm in evidence. "I'm
sorry if it seems like I'm just lobbing the ball back into your court, Cynthia. But from
what you've told me about your own experience, I trust you to make the right call. I
really do."
Analyse the case

MIT School of Business

PGDM: 31th Batch

Semester: IV

Subject Name: Strategic HRM

Case No.3
Welcase India

Chandrahas Mitter started at his reflection in the glasstop table. "What is your role in this
organisation?" He asked himself. "Can you actually be an agent without taking your
bosses in the US into confidence? Would you be shirking your responsibility if you
choose not to place your observations before them?" Mitter had no answers.
Mitter was the director (human resources) at Welcase India, a large multinational that had
entered India four years ago. He reported to Saurav Baruah, the country manager and to
John Carey, the international head of human resources. Much had been written about
Welcase and its leadership. The company had set a benchmark for others in team skills,
change management, strategic planning and synergy. And yet, the past few months had
been confusing and emotionally draining for Mitter, as he saw hidebound attitudes
creeping out, diminishing the halo around Welcase. Mitter's main worry was whether
Welcase was really doing as well as was widely believed. Though the company's sales
were robust and targets were being met, he felt that some critical issues were been
ignored. Welcase was meeting its targets, but were the employees feeling that sense of
excitement? Did they genuinely believe in the company's mission? Were they unsure
about where their career graph was headed?
Mitter recalled what management consultant Tom Peters had said in his path-breaking
book In Search Of Excellence. The top 10 are great and the bottom 10 anyway need to
go, but it is 80% of the people who really make the organisation's culture, who really
make the organisation work in a systematic way in the long term. He wondered whether
that we really happening in Welcase. At Welcase, apparently 80% of the employees did
not feel driven, fulfilled and satisfied. This low morale had its roots in the company's
performance appraisal system which had left most of the employees disillusioned.

When Mitter had met the heads of six divisions in India as part of the orientation
programme three years ago, they had cheerfully said," We have goals and we simply
have to go and achieve them."
Today, the same people were saying that Welcase was a great company but much had to
be done in the area of performance management. "Performance is more than mere targets
and volumes. What are we doing about institution building? Where is the contribution
which helps people to develop their skills and capabilities and contribute to the
organisation? None of that seems to be happening." they said in unison ."But we have a
very solid performance appraisal system in place countered Mitter. "There is a process
for settings goals, rewarding performance and building skills." "But there is no
transparency in the system, " said one business head. "Some people are considered stars,
but what makes them stars? And, how do I become a star? Do we have a system that
builds on my strengths and capabilities? "
It was well known in Welcase that however good an individual's performance, if his
behaviour didn't match the company's values, he would not have a future in the company.
But this 'Performance versus values' trade-off, assiduously followed by all Welcase units
worldwide, was couched in ambiguity. As the HR head in Jakarta had said: "We aren't
clear on how to measure performance. We have managers who are high on performance
and low on values, but because we are under pressure to perform to meet the number
targets, we defer the verdict to the following year."
Another unit head said:" The local leadership is under continuous pressure to prove the
unit's worth. This leads to certain compromises in values. But we get conflicting reports
from the business heads which lead us to send conflicting messages to the performers."
Like many firms with stated values, Welcase had evolved a behavior charter for its
employees. The belief was that growth and change could happen only when people had
certain intrinsic 'values', the commitment to work well in teams and striving for
performance excellence that was not bound by personal growth alone. An intrinsic part
of the performance appraisal system, therefore, was a continuous evaluation of
performance against targets/ pre-set goals and an individuals apparent behaviour against
the started parameters. Feedback on these values was sought from cross-section of the
stakeholders in an individuals performance, including his boss, peers and subordinates.
The feedback from the wider workgroup was actually intended to be used as an input for
self-development. But in India, the parent company had decided to allow business heads
to rate a manager's performance based on this feedback. The rationale was that since the
Indian unit was new and resource base was being built up, this information would help
business heads to identify the potential of people the build a strong team.

Mitter found this difficult to accept. He felt that the system was essentially a tool for
self-development which enables managers to get an insight into their interpersonal
relationships. That a unit was new was not sufficient justification to use the score for
performance appraisal which could be damaging, he thought. Besides, where were the
organisational parameters against which an individual's attributes could be measured?
What troubled Mitter more was that there was a huge problem of how much to
communicate to the managers. If managers knew that the feedback was going to affect
their growth the company, would the exercise degenerate into a you scratch my back, I
scratch yours' exercise? How can we build a more effective way of ensuring adherence
to values meaningfully without some very subjective feedback impacting an individual's
future? Also, shouldn't the business head already know the deficiencies and counsel the
employee to improve?" Wondered Mitter.
The business heads slotted managers in four broad categories: 'high potential' (can grow
in a number of roles),' has potential' (needs development in specific areas),' has more
development areas than key strengths ' (needs to be watched) and 'low potential (must
exist).
The appraisals were meant to be discussed by the appraiser and the appraised. But the
feedback Mitter got from various employees at different levels was that the discussion
was too cursory, that bosses did not spend enough time analyzing the appraisals,
discussing the weak points or recalling the success achieved during the period under
review "If my boss thinks I didn't have very high potential, I must be given a chance to
explain why I think I have the potential. It is supposed to be an interactive session, but
somehow it is not doing what it was intended to," complained many of the managers.

When Mitter pointed out how the appraisal system was being abused, the business heads
were startled. "What do you meant!" said one vice - president. "This is a time tested
system that works faultlessly elsewhere in the world."
It seemed to Mitter that, down the line, the expectations from HR were different from
what the senior management perceived. The system was so engineered that no one got to
known where he was being slotted unless he was in the 'grow' or 'develop' categories. For
instance, Baljeet Singh was slotted in the 'watch' category last year. When the appraisal
was over, Singh got no feedback. But over the next four weeks, he saw the subtle change
in the way his papers moved, the responses he got and the attitude of the boss. He noticed
that the monitoring was intensive and probing. "Have you visited the Hosur plant? No?
Then you must. I will talk to the factory manager there... It is the one of various things
you must do this year." his boss said.

But Singh did not see any reason to visit the plant. He knew his region had not performed
too well, but he hoped to discuss the reasons at the appraisal. However, that did not
happen. His boss only shook his head and said gravely. There will be always good
reasons for poor performance, but you have to accept that you have not performed. We
are here to sell, deliver, attain targets, and not give excuses for not meeting the targets.
These are demanding times and don't seek protection."
Matters came to head when Vandan Palia, vice president (quality control) at Kersha
Components, a Bangalore based electronic goods manufacturer acquired by Welcase,
decided to resign. Welcase had initially hired Palia as its market coordinator for a new
branch in Hyderabad. The south Indian market was highly competitive and despite its
best efforts, the Welcase team could not make a impact there. Subsequently, the
company decided to close down the Hyderabad branch. But Palia had been put been put
in the 'grow' category by a recent appraisal and was already scheduled to leave for a six
months training programme at the company's plant in the US. So, while the others were
asked to leave, Palia headed for the US. Palia's boss, however, held him responsible for
the failure and consequent closure of the Hyderabad branch. So, in the next appraisal, he
noted that Palia was not a good team player. Palia, meanwhile, had got excellent
feedback during his training in the US, but when he returned, he was told: "Your team
skills are lacking, so you are again put on probation for six months. Your performance
will be reviewed after six months."
After six months of hectic activity in the US, Hyderabad came as a dampener to Palia.
To make matters worse, the Kersha workers were an untrained team and Vidyut Parasher,
its CEO was not too pleased at the prospect of keeping someone who had been rejected
elsewhere. Even as he coped with the change. Parasher bluntly told him, "This is a make
or break situation for you. If you don't show results, you are out." Besides, Palia had to
initiate quality improvement in a unit which had no quality ethos. It was a nightmare for
Palia. Little wonder then that his efforts produced minimum results.
Parasher, of course, blamed Palia for the slow progress and said that he was incompetent.
It all made Palia feel worthless. What agitated him greatly was the feeling that everyone
was sitting in judgment on his performance. That was when Palia met Mitter," I really
don't see much point in continuing like this, "he said. "I feel worthless and I don't think I
can contribute. Whatever I do or achieve, it will not be recognised because nobody is
bothered. They just want me to introduce quality improvements at Kersha. But what
support have they given me to perform?"

He recalled the promise made to his the previous year. "They told me they would review
my performance in six months, but seven months have gone by and I have no feedback
about where I stand. I don't think I am ever going to make it. I feel let down, I'm
confused... "
Mitter tried to arrange a meeting between Parasher and Palia to sort out the matter. But
Parasher had his lines ready. "I told you when he was on probation. He is not working
out." Mitter could see that Welcase had a structured way of easing out people who did not
fit its needs. "I think the time has come to ask Palia to leave." said Parasher, as if
endorsing that fear. "It's almost clear to me that my boss in deciding my fate," said Palia.
"Parasher will not discuss my assessment report with me. If a performance system has to
work, it must be a two -sided affair. Otherwise, it is judgmental and subjective. At least,
it can't be termed an appraisal system."
Mitter feared that if Palia resigned, it could trigger off disaffection in the organisation.
Tremors were already being felt, and although the other business heads were less vocal,
they were themselves on shaky grounds because the country manager Baruah did not
share his appraisal ratings with them. Ironically, the business head also used Baruah's
method to appraise their own teams. In a way, Palia's meeting with Mitter was a selfinitiated exit interview because he had already found a new job. "I am going, but if you
don't watch out, there will be a lot of heartburn. Though I don't know how many people
have approached you and what you intend to do about it, I do know how a lot of the
others feel." he cautioned Mitter.
Mitter could see the disillusionment with the appraisal system was growing with the
company and decided to see Baruah about it. After all Baruah had worked in four other
countries before taking up the Indian assignment and had a good track record as a people
manager and an able leader. However Mitter doubted if a solution was at hand. For all
his track record as an able manager, Baruah had not been able to replicate his skills in
India. Baruah had returned to India after 18 years. He had left the country with a certain
view of India and its people. Today, 18 years later, he was seeing a totally different
country. Baruah had said that, in as many words, when Mitter brought up Palia's case.
"India is not what it used to be 18 years ago. The awe in which we had held our seniors
in the early 80s when I joined as a trainee is something I don't see now. We served at the
feet of our bosses, accepted their every diktat. None of this 'I disagree with you'
rubbish... In America, we don't mollycoddle our managers. Each one has to prove his
worth or face the consequences," he said.
Mitter could see that Baruah was basically American at heart. That was to be expected;
after all, he had spent the formative years of his career roughing it out at the hands of
exacting American bosses. "It's taking a while to settle down because there are so many
issues and so many concerns," began Mitter. But Baruah pooh-poohed his anxiety and

said: "You have only to tackle the issue. If someone comes and groans to you about this
or that, just address the issue. You will be wasting your time trying to make everybody
happy. We are not here to make people happy. I am here to deliver results to the
stakeholders of my parent company. Yes, I am concerned about people.... but
periodically, we must be firm and tell them that this is what you need to be doing. That is
the kind of HR manager we have in John Carey."
Mitter had spent three months in the US learning the ropes under Carey. Carey was a
very insightful HR person and truly successful. But that was not because he insisted that
people put their noses to the grindstone, but because he had perfected the art of listening
to people. Carey had many views and ideas, but he was open to debate and discussion
and even willing to change his views if the argument was convincing enough.
However, Mitter doubted if Carey's appraisal system was sound in the Indian context- at
least the way it was being used in Welcase. The system slotted people into a matrix
without any feedback. A boss needed to tell an individual whether he was an apple or a
lemon and why, felt Mitter. By slotting people unilaterally to their exclusion, Carey had
negated the role people played in building the organisation. For example, the business
heads did not reveal their subordinate's. But nor did Baruah reveal his ratings of business
heads. In other words, the malaise permeated through the fabric of the organisation.
Mitter had done an audit of the teams, attitudes, motivation, mission, values and morale
among the business heads and arrived at a conclusion that the basic problem was the low
morale. His audit has revealed that what managers were saying about their bosses, the
business heads, was identical to what the business heads were saying about Baruah.
Mitter knew that that the only way to build the organisation and reap a sustainable
competitive human resource advantage was by revamping the performance appraisal
system.

That was easier said than done. Mitter could see that Baruah came equipped to handle
people who traveled on bullock carts, but was alarmed when he was their on a bullet
train. So he now had to do an about-turn and change his mindset by accepting his
managers knowledge and intelligent men who were capable of taking decisions on their
career needs. He had to accept that his business heads were capable of deciding the
growth needs at their resources. Each of them had more than 15years experience and
were professionals in their own right. They did not need someone who would privately
slot them as apples and lemons and also decide what development inputs they need.
That was exactly what the business heads were also saying. "I must know what my rating
is and what the feedback is that it is based on. And I must be given a chance to explain
my position. I also want to express what I need in terms of inputs because I know my

weak points"..But Baruah was unwilling to accept this view. As a result, the business
heads were slowly becoming transactional in their operations. Their work was reduced to
a checklist of things to be done.
When he talked to his bosses in the US, Mitter realised that there was a genuine
commitment to human resource development. But they also gave a lot of autonomy to
their individual country heads. This empowering to unit heads was meant to naturally
flow down the line, felt Mitter. But in India, it appeared that there were lots of
roadblocks in the empowering process.
When the annual unit review came up, Mitter received a call from Carey. "The unit
seems to have bettered its targets. That is very good, but how are the people doing," he
asked. "The general feeling is that we are not an open organisation and people are
showing signs of demoralisation." Said Mitter. "So, what's the message?" asked Carey.
Mitter paused. Then, bracing himself, he said, "Do we follow the same parameters to
judge the performance of the leadership? How do we give feedback to Baruah on his
management style? I understand he had a lot to cope with-the policy changes, the price
hike, the new market, and the resistance from certain quarters to the entry to
multinationals. But he's not the only one to suffer thus. Other players in this industry
have been similarly affected. But he had been unable to bring out the best in his team,
which is ultimately responsible for the performance of the company in India.
Mitter feared that Welcase could lose good people, or grow a bunch of yesmen, or have
people who would put the corporate values on the shelf and focus on getting closer to the
country manager. "He is a good guy," said Carey," and he is highly regarded by our
president. Look at what he built in four years. We picked the best man for India, as it's
an important emerging market. So, how do I tell a man who had produced the best for 22
years that his leadership skills are inadequate? But we are learning everyday, aren't we
Mitter?" Carey laughed, adding, "just leave it to me, I will find a way."
Mitter's dilemma had just begun. On the one hand, he had done what he felt was best for
the company by sharing his views on Baruah's leadership style. But, on the other, he felt
uneasy about passing judgement on his boss. He had tried his utmost to change Baruah's
attitude but had failed to make an impact. "I have supported him at every stage hoping
that he would change with time." But by then, the organisation would have also changed.
Am I supposed to change him at the cost of the company?" Once again, Mitter had no
answers.

Study the case and find out all problem related to HR

Give your suitable advice to all the problem areas giving reason for such advice
Explain what type of staffing philosophy is adopted in this organisation

MIT School of Business

PGDM: 31st Batch

Semester: IV

Subject Name: Strategic HRM

Subject Code:

Case No. 4

Equal Work but Unequal Pay

Oleg and Mark are project managers at the Moscow subsidiary of multibillion-dollar
international company. Oleg is Russian local and Mark an American expatriate. Although
raised in vastly different countries, they have a lot in common. Both 30 years old, they
graduated from top universities in their home countries with degrees in economics,
worked for prestigious organizations, went back to graduate school, and now work side
by side in the challenging environment of Russias emerging market economy. They
work long hours, have unpredictable schedules, manage difficult relations with vendors
and government agencies, and endure the ups and downs of corporate attitudes toward the
Russian market. They often work together, attend the same meetings, face similar
problems and send countless faxes and e-mail messages to corporate headquarters in
North America. They have an excellent relationship and often help each other. They like
what they do, and their boss sees a bright future for both of them.
But when the working day is over, the similarity abruptly ends. Mark drives his Volvo
760 to a lavish four-room apartment in the prestigious southeast district of Moscow,
while Oleg has to take the subway to the dark apartment in a rundown building
downtown that he shares with four roommates. On the weekend mark likes to dine out at
the fashionable Savoy restaurant, where dinner costs as much as $200, while Oleg has a
few beers at a friends apartment. Three times a year Mark goes on vacation to Western
Europe, the Caribbean, or the United States; once a year Oleg goes to see his parents at
Siberia. Neither his car, apartment, nor vacation costs Mark anything they are part of
the hardship package he receives as compensation for living in Moscow on top of his
regular salary of U.S. $6,000per month. Oleg does not get any hardship benefits since
he is a local resident and his salary is $200 per month.

Says Oleg: I like my job and like the people I work with, I think we have a great
organization here in Moscow. Most of our expatriates are very open and knowledgeable.

I think we learn a lot from each other, and the company benefits from having the
multinational team.

My compensation? Well, its a bit frustrating to know that your buddies, who do the
same work you do and who you often help, since many of them dont speak Russian,
make 30 times more than you do. This summer we had an intern from American business
school, who worked under me. He used to take me out for lunch to hard-currency
restaurants pay as much as my monthly salary for it! He was a nice guy, but I dont think
our relations were quite normal because I could not buy a bottle of wine for that lunch,
and he knew it.
But at work I dont think about it. Im too busy to think like that. Sometimes late at
night, some crazy thoughts come to my mind; Gee, something must be wrong they treat
you like a second-class citizen, cheap labour, they exploit you..But the next
morning, I am up for work and those thoughts are gone. How long will my patience last?
I dont know.
According to the companys managing director for Russia: Some of our Russian
managers, such as Oleg, are equally, if not better qualified than expatriates. They
perfectly understand our business and they are truly bilingual, while most of our
expatriates can barely speak Russian. We are very fortunate to have these Russian
employees their contribution is hard to overestimate. Compensation? We pay them
what the market tells us here in Moscow. Yes it is extremely low pay according to
western standards, but why should I pay a manager $5,000 if I can hire him for $200?
Are they bothered by the inequity! I dont think so. I havent heard any complaints so far,
and I think we have very good relations among Russian and expatriates.
Mark comments, Oleg is a great guy. We get along well; he helps me a lot, especially
with my Russian. Do I feel sorry for him? No, I think he has a bright future. One day he
will manage this subsidiary. As far as money goes, we live in a market economy. I was
hired in the United States and what I get is what the job market pays there. Its different
in Russia, so Oleg is being compensated differently. And I think he makes more than
Russians working for Russian organizations. Plus, one of the reasons why our company is
here is the cheap, skilled labour, and weve got to take advantage of this.

Discuss the case

(Source: Sheila M Puffer and Stanislav V.Shekshinia, Compensating Nationals in Post
Communist Russia: The Fit Between Culture and Compensation Systems)