Friday, October 22, 2010

Top management on the ‘bench’

Vinod Nagpal had been invited to serve on the board as an independent director of a large corporation. After the incidence of Satyam, where several highly qualified professionals needlessly sacrificed their good will and reputation, he decided not risk it. After considerable pressure and persuasion from one of his friends from the board of another financial institutions, he allowed his name to be referred to the current company. The first few meetings passed off peacefully to make him wonder if such a position of directorship was even essential. Nevertheless, he decided to serve his term and exit peacefully.

Almost by accident, he was approached by one of his friends for help. This friend in particular wanted Vinod’s help in stopping the transfer of his middle aged son in law employed with the company whose board he was a member of. Reluctantly, Vinod spoke to the Chairman and sure enough he was promised it would be looked into.

A few days later, the HR Head sought a personal meeting with Vinod. As they began talking, Vinod discovered a unique challenge the HR head was facing. Almost the top 200 senior people in the company rarely ever went through any performance appraisal. They merely lingered on year after year without any pressure on them to deliver any results. most of them were in their mid forties and the retirement age was 58. So they had a 10 to 15 years ahead of them before retirement that had to be spent meaningfully.

At this age, they felt they were beyond training and rarely needed any need to stay professionally in shape. They were all socially well connected that moving them out of their current roles was too disturbing a thought to consider. Insecurity from exposure of non performance and complacency with whatever they were habituated to delivering was the accepted norm. In this context, appraisal of performance was either a total farce or an unnecessary ritual. Vinod recognized that the move to block the transfer of his friends’ son in law qualified itself along similar lines of reasoning.

Vinod was visibly disturbed. He would not like to be a party to such an unprofessional practice. Asking the HR head to drop the request would have been the easiest to do. His conscience was ill at ease. He felt compelled to get the organization to face up to the need to address the real issue of declining levels of performance, contributed largely by an inactive top management layer. If there is one irrepressible problem with Vinod, it is this: he cannot sit still. He tends to look around and has this uncanny gift for picking up something that sticks out oddly enough that no one would dare to question. The more elusive the subject, the more determined Vinod would get to dig deeper. Since the performance of the company has been a persistent worry lately, he persisted in getting to know more. The HR head, unaware of the implications ahead, was only too eager to supply the information needed.

He discovered that there was a sophisticated equivalent of the ‘bench’ that is often created as a temporary berthing space for people at junior levels. Bench is where they wait for assignments between short term projects. While they have no assignments to work on, they may attend to anything that catches their fancy. They will however continue to receive all their entitlements; if is not their fault if there is no work found for them by their employer.

The practice of ‘bench’ for senior management, he noticed, carries a fancier description. For example, Seventeen people were on leave preparatory to transfer. Twenty one were awaiting order for deputation elsewhere. Four awaited a promotion, although these positions were to be approved by the board. Seven cases were termed OSD, Officer on special Duty. Fourteen were on ‘sabbatical’ and eleven were sent on an indefinite study mission abroad. One served as an alternate to Ombudsman while three more headed some sub committees and enquiry commissions. A three member team scrutinized the affairs of the Charity fund they managed. Vinod shook his head in disbelief. They totaled up to Eighty one positions!

If anyone wanted evidence for choking the future of bright young minds, this was enough! ‘Bottleneck at the top’ suppressed the opportunities for the youthfully intelligent workforce; no wonder they were disengaged and were attritting at the first opportunity. Experience measured in years was being mistaken for expertise.

Vinod looked up at the HR Head and wondered what he should do with this insight he had just now picked up.

He asked the HR Head to make a note at his request to the CEO asking for the need for all these positions to be examined, justified and put up to the board for approval. These eighty one positions added no value but cost the company Rupees forty Crores that would go to the profit line every year. Not a bad start for his first experience as an independent director on the board he felt!


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