WRITTEN ANALYSIS AND
CAN A STRONG CULTURE BE TOO STRONG Submitted By: Group 9, Section A Submitted to-Prof Swatantra Abhishek Kumar Singh – 2014PGP008 Abishek Shenoy - 2014PGP013 Anurag Satapathy – 2014PGP050 Arun N– 2014PGP061 K Uma Prashanthi– 2014PGP150 Remika Roy Chowdhury-2014PGP299 Viswakalayan Dalai-2014PGP426
COMMUNICATION
ASSIGNMENT
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To, Prof. Swatantra Communication Area Indian Institute of Management, Indore Madhya Pradesh, India Date: January 23, 2015 Subject: Written Analysis and Communication - Assignment 1 Dear Ma’am, Presented below is our analysis of the case: “CAN A STRONG CULTURE BE TOO STRONG?” along with recommendations and an action plan. We have discussed the problems faced at Parivar, suggested various options and offered a suitable recommendation for the organization. We hope the report is as per requirement. Please let us know if any clarifications are required. Sincerely, Group-9, Section A, PGP 2014-2016 Indian Institute of Management, Indore E-mail:
[email protected]
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EXECUTIVE SUMMARY Our report describes the predicament of IT services firm Parivar who is facing high attrition rates in the recent weeks in spite of having a very inclusive work culture where attention to both personal and professional lives of the employees are given. The Future Vision group of Parivar has come up with a new innovative idea called People Support where managers will work only to listen to other employees’ grievances and offer them solutions as an integral part of the “love culture” as propagated by Sudhir Gupta, the CEO of Parivar. Employees have been complaining that lower pay, too intrusive work culture and partial access to senior management of only a few inner circle of people as the reason of their attrition. Indira Pandit, Vice President of HR now wonders what to tell about the People Support program to Sudhir and how to reduce the massive attrition rate of the firm. Parivar could either implement People Support now, shelve it for the time being and improve Parivar’s current management practices or increase the pay of the employees to match it to industry standards. These various options are evaluated on a number of criteria like cost, scalability, feasibility, reputation of Parivar and various others. After being evaluated, the most attractive option for Parivar which we recommend is to shelve People Support for the time being and improve its current management practices, reduce the communication gap between top management and employees and to find out about the expectations of the employees and talent market.
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TABLE OF CONTENTS Content No.
Page
Situational Analysis 1 Problem Statement 1 Options 1 Criteria for Evaluation 2 Evaluation of Options 2 Recommendation 3 Action Plan and Implementation 3
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SITUATIONAL ANALYSIS “Can a strong culture be too strong?” is a case study about a mid-size Chennai based IT services firm called Parivar which is facing a huge attrition problem. Parivar has been growing in terms of revenues, profitability and reputation but is still smaller than leading global providers of businessprocess outsourcing services like Infosys and HCL. This huge turn in its story from bankruptcy to success has been brought by Parivar’s CEO – Sudhir Gupta, in the past decade. Sudhir is a big proponent of an inclusive culture in the organization, where attention to both professional and personal details of the employees is given. Sudhir is also a people oriented person as he is seen encouraging Nisha, who is fresh out of business school and wanting honest opinion of Indira. Who is the vice president of HR. Parivar conducts an annual innovation process called the Future Vision where employees from all over the company join senior leaders in brainstorming and designing sessions for planning strategies about how the firm can achieve its annual goals. This year, the Future Vision exercise has led to the creation of “People Support” idea where managers will be dedicated solely for the purpose of listening to other employee’s grievances and figuring out solutions. However the People Support program has not been fully planned as certain important details like its cost, scalability, management and applicability outside India in case of Parivar’s expansion in US and UK, has not been decided till now. In spite of being so much people oriented, in the recent weeks Parivar has been losing a lot of its employees, with as many as 100 employees giving notice in a short span of time. The problems faced by the employees, as explained by Amal in an exit interview, are the remuneration being as lower by 30% than industry standards, too much intrusion in the employees’ lives due to the inclusive culture and partial access to senior employees by only a select few. Judging all the pros and cons of the People Support program, Indira now faces the dilemma of telling Sudhir about whether to continue with the People Support program or not.
PROBLEM STATEMENT Given the “long list of escapees” of Parivar, what measures can be taken by it to reduce its attrition rate along with maintaining its culture, reputation and profitability?
OPTIONS 1
Plan and implement the People Support Idea Do not implement People Support Idea and stabilize current management practices. Provide better employee benefits
CRITERIA FOR EVALUATION
Cost Scalability Alignment with company’s strategy Feasibility-Ease of implementation Reputation-Brand value Productivity of labor Relationship with the employee
EVALUATION OF OPTIONS
PLAN AND IMPLEMENT THE PEOPLE SUPPORT IDEA- Parivar can go ahead with the people support idea if they come up with a proper plan for the structure of the People Support program and its implementation. Training and paying the people support listeners will cost money but People Support might pay for itself from reduced turnover and recruiting expenses. The program might also help correct the disconnect between the employees and the leadership and is a chance to show that the company treats everyone fairly and does not play favorites. This will reinforce parivar’s love culture and improve the relationship with the employees. A major drawback though will be the fact that it might take quite a lot of time of the employees, decrease productivity and hence affect revenues and the growth prospects of the company.
DO NOT IMPLEMENT PEOPLE SUPPORT IDEA AND STABILIZE CURRENT MANAGEMENT PRACTICES – Instead of starting a new program by spending considerable resources on it, Parivar should try to figure out what the employees think about Parivar’s culture and what their expectations are. They should implement better management practices such that the immediate managers are sensitive to the needs and concerns of the employees and have an open door policy for all employees. This will have negligible cost on the organization and at the same time help in improving the relationship with the employees. 2
Communicating the company’s needs and meeting the employee’s expectations such that there is a mutual benefit will ensure that the workforce is functioning in line with the company’s strategy. Productivity also won’t be impacted.
PROVIDE BETTER EMPLOYEE BENEFITS-In light of the fact that Parivar is present in an extremely competitive industry where best companies are continuously poaching for talent, it is important that Parivar provides employee benefits more in line with industry standards. This might include better salary, employee stock options, company cars, insurance, health club facilities, daycare facilities etc. Although this will add significant cost to the organization, it will be compensated by the increase in productivity and decreased attrition as the employees will truly feel that Parivar really cares for them and realizes their importance. This will also result in establishment of a strong brand image for the company through word of mouth which will attract best talent and help in the growth of the organization.
RECOMMENDATION We recommend that Parivar put on hold its implementation of the People Support program and instead focus on streamlining its management practices in order to let it permeate through the entire organization. Amal’s exit interview provided firsthand evidence that Parivar’s culture, where the top management was accessible to all its employees, was in reality not felt by all of them. Sudhir uses a nurturing, close and friendly management approach with his subordinates. But this is only experienced by those employees within the privileged circle, which antagonizes those who are left out. This leads us to conclude that the culture of caring works in isolated pockets and does not yet form the essence of the organizational culture as a whole. Therefore, streamlining the way it is practiced by top management would be a good way to ensure it touches every employee of the organization.
ACTION PLAN AND IMPLEMENTATION 3
Based on the given recommendation, the action plan will be implemented in the following phases:
PUT THE PEOPLE SUPPORT PROGRAM ON HOLD – There is not too much convincing evidence for the requirement of the People Support program at this moment. Furthermore, the considerations of its economic feasibility and scalability have to be dealt with in more detail. STRENGTHEN CURRENT MANAGEMENT PRACTICES - The current management practices and culture have to be strengthened in order for it to form the essence of the organization’s culture. The case facts corroborate that the caring culture is liked, but certain groups of people are left out of the loop because there is just not enough top management resources to invest in every individual. Sudhir must meet with the top management and get them more involved in his ‘love culture’ approach. With more people in the fold, every employee can be afforded some time with top management for personal interaction. REMOVE COMMUNICATION GAPS – the two parties at stake, the employees and top management must iron out any miscommunications in order to ensure a match between what is provided and what is expected. If there is any mismatch, talking it out can bring both parties to a healthy common ground. FIND OUT THE EXPECTATIONS OF EMPLOYEES AND TALENT MARKET – Data must be collected through sources such as exit interviews, surveys, employee interviews, competitor analysis, industry analysis, etc. to gauge the expectations of both current employees and talent in the market from the organization. Their reasons for wanting to join a company evolve with time. Keeping a tab on these changing requirements may throw up insights that could possibly disprove the culture angle as the cause of attrition that plagues Parivar currently.
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