INTRODUCTION

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.

START-UP

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.
FAST GROWING COMPANY

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. It’s 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 manager’s manager (reviewer) with the employee.

DIRECTIONS

“Directions” is an annual company-wide event that takes strategic discussions out of closed-
door 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

HCL’s 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.

CRITIQUE
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 start-
up.

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 in-
line 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.
SUMMARY
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.

RESOURCES AND REFERENCES

http://en.wikipedia.org/wiki/HCL_Technologies_Limited

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.

http://www.ted.com/talks/lang/en/simon_sinek_how_great_leaders_inspire_action.html

http://www1.sap.com/uk/solutions/executiveview/include/high-performing-
workforce/pdf/Winning_the_Race_for_Talent_in_Emerging_Markets__.pdf

http://hbr.org/product/hcl-technologies-employee-first-customer-second/an/UV1085-PDF-ENG

Mr. Reejo Varghese, Ms. Greeshma V : Senior Software Engineer, HCL Technologies Ltd.

Employee First Customer Second “World’s most modern management Idea” Fortune
Magazine.
THE RELATIONSHIP BETWEEN THE HISTORICAL PAST OF
THE COMPANY AND ITS HUMAN RESOURCE FUNCTION
OF THE ORGANIZATION.

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