Theme

Human Capital Strategy – Getting the right people

Creating a high performance culture

with the right HR strategy

By-
S C Pathak
GM (HR)
Gujarat Alkalies & Chemicals Limited
• One of the Key success factor of a high performing
organization is its Culture.

• Culture adopted by the organization determines it success

and even sustainability. And this challenging task of creating a
high performance culture can only be accomplished by the HR
department, with the right HR strategies.

• Why HR ?
Because it is the only department that deals with people
process like recruitment, selection, training & development,
performance evaluation, career planning promotion, transfer
etc.

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What is culture?

• Culture is the infrastructure and the fabric that binds people

and processes together to generate results.

• 80% of Organisational culture exists by accident or default,

rather than design. Most are shaped through critical
incidents or key events that have happened in the history of
the organization.

• Culture should be focused and have a balance between

internal and external processes

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 Role of HR
Pre –Implementation

• To know what their culture is and what type of culture is the

demand of market.

• To know the strength, weakness, opportunities and threats

(SWOT analysis) of the organization.

• To elucidate the need for Change in the culture and seek the
participation of the leadership and other employees in the
change.

• The whole process should be by the people, for the people

and of the people.

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What does the right HR Strategy should be for high Performance
culture?

• HR should communicate to its employees the company’s Mission, Vision &

goals .
• To ensure that the process follows a top-down approach.

• HR should support the employees / supervisors in forming KPIs / KRAs

such that they are rational, linked with Organisational goals and reflect
accurate impact on organizational targets.
• To link performance management system with reward, & other HR
process.
• To recognize the high performers.
• To identify non-performers, counsel them, identify reasons for non-
performance & organize training and development programs and
motivate them.
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 Case Study
Performance Management System
At
GACL

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 Gujarat Alkalies & Chemicals Limited

 GACL – A State Government PSU

 Features that makes GACL a Unique PSU:

• Operating in the competitive market unlike other state PSUs
• Steep competition in business as well as in job market
• Competitors: Grasim, DCM shriram, Nirma

 Challenges to HR Deptt. of GACL :

• Four year pay revision – not comparable with peer industries
• High Attrition Rate
• Scarce Technical Talent
• Non-comparable Pay Structure

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 Value Enhancement - Old v/s New PMS
Sr.No Old (PAR / CR) New PMS

Appraisal is integrated with functional as well as

1 Appraisal was only based on behavioral aspects
behavioral aspects

2 Non-numeric ratings were used for evaluation Five points rating scale is used.

3 No linkage to the organizational business goals Linked with organizational business goals and objective

4 No individual / functional targets for employees Targets are decided through active participation.

No role clarity / job prioritization in carrying out Role clarity through Key Performance indicators and
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one’s function prioritization through weightage given to it..

Final performance ratings are communicated to concern

6 Ratings were not communicated to employees
employee.

7 No linkage to reward/ recognition. Employees is rewarded through variable pay.

Linkage with other HR initiative like Promotion,

No linkage with other HR initiatives like career
8 Performance counseling, training , job enlargement/
growth, job enlargement / enrichment etc.
enrichment etc.

Jobs linked to the “SMART” methodology

9 No specific timeline for execution of jobs / targets
Specific, Measurable, Achievable, Realistic, Time-bound

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 The Implementation Phase:
1. Top Management Support:
Active Involvement of Board of
Top Directors & MD
Management
Support 2. A Steering committee: Senior
Executives of GACL (to oversee
process of implementation)
Steering Help-Desk
Committee By HR 3. “Change Champions” at
Ground Level: Two
representative from each
department (to directly interact
with all management staff as
Success facilitator)
Parameters
4. Clarity in Communication:
Through Training Programs,
Rigorous Office Orders, Change
Change Champions
Training
Champions
Sessions
5. Rigorous Training Sessions:
Covered Each employee in
Clarity Management Staff (Concept ,
in Objective and Benefit of new
HR Initiatives)
Communication
6. Help-desk by HR: For one-to-
one customized service & query
resolution. E-mail id to interact
directly with HR & Head
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 The Concept – New PMS:

A framework to drill down the Organisational goals in

Individual’s performance targets

Scientific Evaluation – KPI based target setting

Integrated process which involves employee & his

superior

Aligning employee’s efforts with functional and

organisational goal – joint efforts towards improving
organisational performance as a whole.

Applicable to Management Staff only

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 New PMS – Linking with other HR
Processes
Linkage with –

• Reward & Recognition

• Training & Development

• Promotion Policy

• Job-rotation, Job-enrichment & Job-enlargement

• Performance Counseling

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 Variable Pay Methodology

Levels Org. Performance Ind. Performance

Total Pay (CTC)
(100%) M1 – M4
75% 25%
(ED, CGM, GM, DGM)

M5 – M8
50% 50%
(CM. Sr.Mgr, Mgr, Sr. Officer)

Fixed CTC Variable Pay M9 – M10

25% 75%
(85% of Total CTC) (15% of Total CTC) (Officer, Asstt. Officer)

Both Individual & organisational performance are

considered level wise for Performance rating and
calculation of variable pay while giving Individual
Organizational Individual performance rating both Individual Performance &
Performance Performance
behavioral competency are considered.

Behavioral
Levels KPI
Competency
M1 – M4
30% 70%
(ED, CGM, GM, DGM)
Key
Performance Behavioral M5 – M8
50% 50%
Indicators competency (CM. Sr.Mgr, Mgr, Sr. officer)
(KPI)
M9 – M10
70% 30%
(Officer, Asstt. Officer)

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 Concept & Need of Compensation
Concept
restructuring
Restructuring of existing salary components (allowance & perks) is carried out
to provide option to the employee for
- Own tax planning.
- Increase cash in hand.

Need for Compensation Restructuring

High FBT / Retirals burden for GACL.

Encashment components with no perceived value to the employee ie. Liveries ,

company’s car etc.

New young entrants prefers more cash in hand .

Large number of components, leading to administrative issues of managing / monitoring .

Outdated structure; not revised even after numerous changes in tax laws.

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 GACL – Compensation re-structuring
Total amount of Cost to company (CTC) is broken down as follows.

Cost to Company
(CTC)

Fixed CTC Variable Pay

(85% of CTC) (15% of CTC)

Base Pay Flexible Pay Plan

(40%) (60%)

Variable pay is paid onetime as per performance rating.

Base pay is decided by company
Flexible pay components are decided by an employees within the allotted cap

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 Restructuring of components
Components of Old Compensation Components of New Compensation
Structure structure..
1.Basic A. Base Pay (to be decided by GACL)
2.F.D.A.
3.V.D.A. 1. Basic
4.H.R.A. 2. PF
5.C.C.A. 3. Gratuity
6.Washing Allow..
7.Canteen Subsidy
8.Education Exp.
9.P.S.D. Allowance B. Flexible Pay Plan (to be decided by
10.Medical reimbursement
11.Chem. Handling Allow. employee)
12.Gardening Allow. 4. Superannuation
13.Conveyance 5. Conveyance
14.Company Car
15.Education Asst. 6. LTA
16.Birth day gift 7. HRA
17.L.T.A. 8. Education Asst.
18.P.F.
19.PA Policy 9. Hostel Allowance
20.EDLI Insurance 10. Canteen
21.Superannuation 11. Washing Allowance
22.Bonus/Ex-Gratia
23.Uniform/Liveries 12. Medical Allow.
24.Gratuity 13. Variable Special Allowance
25.Phone
26.Medical
27.Electricity
28.Furniture
29.Uniform & Liveries
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 Role of HR at GACL during the Initiatives

 HR department deliberated the PMS & Compensation with members of

committees in all vital decisions during the implementation process.

 HoD- HR conducted a series of informatory sessions with the Corporate &

Functional heads.

 During training sessions HoD –HR addressed queries / fear / notions of the
employees and explained them individually whenever required.

 A team of Officers of HR department facilitated each and every management

employee in fixing KPIs (SMART method) by linking them to the
Organizational goal and deciding components in flexible pay plan.

 HR – Team along with IT department developed PMS & compensation

module and trained all mgt. employees for using the online module . Hence
the whole system is paperless.

 Now HR department is owner of new PMS linking variable pay and

implement flexible pay plan (Choice pay) from 2009 onwards.

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 Thank You
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