Behavioral Scientists in Action 1 CCMC Corporate Comprehensive Management Consultants “People Drive the Process of Excellence”

Behavioral Scientists in Action 2 Competency Based HR Practices in India: Yesterday and Tomorrow – Lessons for South Africa Dr. S. Pandey Corporate Comprehensive Management Consultants India, Bombay 18 th March, 2011 Key note Address at the Annual Conference of ACSG, Stellenbosch- South Africa

Behavioral Scientists in Action 3 Scope and Objective Scope: Current Business Environment in this emerging economy Opportunities & challenges of Enterprises in general and specially Consulting organizations including Management Consulting Firms

Behavioral Scientists in Action 4 Scope and Objective (contd.) Objective: Insights for HR-Professionals and Enterprise owners based on macro level secondary data and ethnographic approach Ideas about setting up business in India specific emerging Industries Ideas about specific business opportunities for AC-professionals and Management consulting in general

Behavioral Scientists in Action 5

Behavioral Scientists in Action 6 India Region: South Asia Income category: Lower middle income Population: 1,185,347,678 GNI per capita (US$): 1200

Behavioral Scientists in Action 7 India Business witnessed some critical events recently Pre-liberalization era (prior to 1990s) Supply of fresh air in Auto and Manufacturing (post ) The advent of IT (post ) Speculative bubble covering roughly 1995–2000 (with a climax on March 10, 2000 the dot-com bubble burst) The Call center’s entry to India, maturing to serious BPO business (ITES – technology driven). End The rise of emerging markets; following Y2K, the IT-service business in many domains, KPOs The recent economic meltdown (2007-8) The recognition of economic growth engines along with some of the developing countries in Africa, Asia, and South-America since the middle of 2009.

Behavioral Scientists in Action 8 Graphs are for representational purpose only Pre 1980s1980s AC Market Money Supply

Behavioral Scientists in Action 9 The story of Competency based HR practice in Indian Business organizations Ethnographic Domain: Selected 30 significant Competency design & implementation projects selected in western, southern, and north India; over a period of about 15 years. Research and consulting assignment of a group of early practitioners of competency based work that the author had opportunity to see from inside

Behavioral Scientists in Action [large numbers; lower to middle level; long duration; all but 1 had critical issues No.YearProjectCompany Start-up Assessment Center: Design, Development and Implementation General Motors (India) Ltd. Halol, Gujarat Development Center – Institutionalization Assessor Training Castrol India Ltd. HO: Mumbai Development Center for Marketing and Sales Personnel; Assessor Training Kirloskar Brothers Ltd. Dewas, Indore AC for the Selection Center for civil aviation Pilots Jet Airways (I) Ltd. Mumbai Internal Selection Center Design & Implementation for International Safety Rating Group- Assessment Centre for Selection of Safety Engineers Oil & Natural Gas Co. (ONGC) *Competency Assessment of Middle Management Psychological testing and competency assessment of middle level executives Jindal Iron & Steel Co. Ltd. Mumbai,Tarapur and Vasind Assessment Center: Promotion and Development Center for Sales Personnel 2. Internal Assessor Training Colgate-Palmolive India Ltd. HO - Mumbai *Selection of Top Managerial Positions, including Managing Director SPACO Carburetors(I) Ltd. Automobile Ancillary Pune and Vadodara

Behavioral Scientists in Action [Strategic areas, deep interest; institutionalization NoYearProjectCompany Design and Implementation of Software Engineers Selection System Patni Computer Systems (PCS) - Mumbai Design, development and implementation of a series of Assessment Centres for the identification of Future Business Leaders. Satyam Computer Services Ltd. Hyderabad, Bangalore, Chennai Design, development and implementation of a series of Assessment Centres for the identification of Future Software Technical Architects Satyam Computer Services Ltd. Hyderabad, Bangalore, Chennai Internal Capability building through development of an Internal pool of AssessorsWNS Global Services (P) Ltd. (Subsidiary of British Airways) a BPO Bombay, Pune 5.Ongoin g Since March Design and Implementation of Organization Wide Competency based Development Centres. 2.DC for all GMs & VPs 3. Internal Capability building through development of an Internal pool of Assessors 4. Training of all HOD and Sectional heads in Performance Coaching. 5. Technical Leadership Framework : Competency Model Design & Development Reliance Industries (3 locations) Development Of Competency Based Systems For End User Sales Personnel & Sales And Marketing System Audit PCS Industries Ltd. Mumbai Organizational Diagnosis: With Special Reference To OCIL’s Readiness To Implement A Competency Framework Based People Management System Owens Corning India Limited Behavioural Leadership Excellence Model & Design and Implementation of Assessment cum Development Centre for Services Group 2. Behavioural Leadership Excellence Model and Design and Implementation of Assessment cum Development Centre for Product Group Sasken Communication Technologies Limited

Behavioral Scientists in Action No.YearProjectCompany Design and Implementation of Competency based Assessment Centres & 2. Internal Capability building through development of an Internal pool of Assessors TeleTech-India Design, development and implementation of organization wide Competency based Assessment Centres WNS Global Services (P) Ltd. a BPO Bombay, Pune Technical Expert for NAC – NASSCOM for Assessment of Competence. With primary responsibility to Lead all Technical initiatives of TEC (Technical Evaluation Committee). NASSCCOM (National Association of Software &Services Companies) Behavioral Competency Certification of Delivery Group: The process review and Augmentation Infosys Technologies Limited (Infosys Leadership Institute) Behavioral Leadership and Technical Leadership Framework: Competency Model Design & Development and deployment facilitation. Flextronics Software Systems (Aricent Technologies Holdings Ltd.) Design And Development Of A Competency Framework For Lead Analyst, Senior Analyst & Analyst in WIPRO-UBS Supplementary Selection Tool Development based on Psychometric Testing for Entry level WIPRO-UBS BPO Technical Leadership Framework : Competency Model Design & Development Sasken Communication Technologies Limited

Behavioral Scientists in Action Onwards No.YearProjectCompany Fresher Selection System Design 2. Workshops On Competency based interviewing skills 3. PMS for freshers based on PR Attributes 4. Competency based Training programmes Flextronics Software Systems (Aricent Technologies Holdings Ltd.) Behavioral Leadership and Technical Leadership Framework: Competency Model Design & Development and deployment facilitation. 2.Development Centre for all General Managers and VPs Varroc Group Design and Implementation of Development Centres for a Select group of Middle-management employees Indian Oil Corporation Limited Competency based Organization Structure and Development of Job descriptions 2. Design and Implementation of Competency based Performance Management System. Varroc Group Design and Implementation of Competency Framework and Competency based selection centre for Entry Level Pilots. 2. Assessor Training Programmes for Pilot- Commanders – Internal Capability building for Implementation of Competency based selection centre for Entry Level Pilots 3. Assessor Training Programmes for Managers – Internal Capability building for Implementation of Competency based selection centre for Entry Level Pilots Jet Airways India Ltd Assessor Training Programmes for Sr. General Managers and Assistant Vice Presidents – Internal Capability building for Implementation of Competency based Assessment & Development centre Preparation of Feedback facilitator Reliance Industries Competency based 360 Degree Feedback for MD & top management teamVarroc Group

Behavioral Scientists in Action 14 The summary or Trend analyses : Localization (Indianization) of MNC Competency frameworks (that was designed in EU, Germany, & US parent organizations), preparation of Method bank, AC stationary, supplemental psychometric tests, Assessors training and handholding for deployment In the form of MDP: Seminars on AC approach, Assessors training program

Behavioral Scientists in Action 15 The summary or Trend analyses : Full blown Competency framework development for Organization wide use Start-up Assessment Centre design and implementation for large scale selection Indian Manufacturing organizations, Large PSUs (specialized project), Civil Aviation (Airlines Pilots) Approach was mostly problem shooting events

Behavioral Scientists in Action 16 The summary or Trend analyses : Along with Behavioral and Leadership Competency Models, the Technical competency models construction and deployments AC approach based interventions in strategic areas, across functions, deep interest, institutionalization Mostly Indian fast growing Large or very large organizations. Top and middle management level. Industry: IT (product & service companies), ITES/ BPO/ KPO, Petrochemical, Refineries, Telecommunication software

Behavioral Scientists in Action 17 The summary or Trend analyses (just before global recession) IT organizations large projects, serious developmental centers with long drawn interest in overall Human capital approach; use of AC for Merger & Acquisition. Organization wide deployment of Competency based HR system design and implementation National level vision for AC (NAC) by NASSCOM (National Association of software and service companies); state Govt.’s Dept of education initiative for standard XII students’ preparation for employment in emerging BPO organization

Behavioral Scientists in Action 18 The summary or Trend analyses Organization wide deployment of Competency based HR system design and implementation or isolated competency based HR system design e.g., Competency based performance management system Competency based promotion system, Competency based Graduate engineers’ on campus selection system, Competency based Technical & Managerial training systems Strategic leadership development as a proxy to OD Airlines Pilot, Cabin crew, Maintenance engineers In Automobile, Petrochemical and refinery, Petroleum product marketing company, PSU, Few IT telecommunication

Behavioral Scientists in Action 19 India Business Environment, Opportunities* Strong Growth Momentum Sustained process of liberalization (since 1991): Continuous GDP growth, Increased openness to foreign trade and investment - declining tariffs, liberalization of FDI restrictions Rapid growth in export-oriented IT, ITES/BPO, & Retail industries Manufacturing is a strong base Fast growing Automotive sector (India is highest 2-wheeler producer in the world) The above has stimulated Indian industry to restructure for international competitiveness Strong balance of payments - rapid build up of reserves Growing portfolio investment Cross-party support continued for liberalization in-spite of coalition Govt. *Based on International Finance Corporation report, CDC report and other published data]

Behavioral Scientists in Action 20 But private industry remains underdeveloped Private investment only 15-20% of GDP FDI flows still low (< 3%) Industry contributes < 30% of GDP Only 10% of total employment is in the organized sector

Behavioral Scientists in Action 21 Remaining Growth Constraints High fiscal deficits crowd out public and private investment Severe infrastructure bottlenecks Rigidities in labor and land markets Widespread Govt. ownership of business, dominance in banking Corruption is wide spread; particularly in Govt. regulatory institutions (proximity to the government is an enormous source of profitability in India) More than 30% of Indians survive below poverty line and India has the second largest number of billionaires, second only to Russia Import tariffs, complex tax regimes Restrictions on FDI in some sectors Excessive regulation increases costs of doing business

Behavioral Scientists in Action 22 Investment Climate at a Glance in early 20 th century ChinaIndiaThailand % of Sr Mgt time with Govt. officials 9.2%16% Share of firms with own30%69%- generators Days to clear imports (longest) Cost of Shipping5.4%8.5%6.7% Paved Roads (% of88%56%97% total) Cost of Capital5.85%12.3%7.8%

Behavioral Scientists in Action 23 Opportunity  Large, rapidly growing domestic market. Phenomenal increase of disposable income in the hands of ever growing Middle class (350 million strong middle class which commands a formidable spending power)  Large, low cost labor force availability (though business of labor arbitrage is under pressure but growing)

Behavioral Scientists in Action 24 Opportunity World’ largest supply of scientific Man-power (but only 18% of the fresh technical graduates in India possessed the right skills for jobs in IT services companies) Engineering/IT/English language skills Abundant availability of raw materials Political instability, but consensus on economic policies Growth in private ports and SEZs (special economic zones) addresses lack of infrastructure for export- oriented industry

Behavioral Scientists in Action 25 High Potential Sectors in India  Knowledge based organizations, as for example, Software services, ITES (BPO/ KPO)  Autos and components  Medium Engineering-based manufacturing  Steel  Textiles  Pharmaceuticals  Alternative to China for companies looking to source merchandise globally

Behavioral Scientists in Action 26 Ideas about specific business opportunities for AC- professionals and Management consulting in general

Behavioral Scientists in Action 27 Knowledge based organizations, as for example, Software services, ITES (BPO/ KPO) 1. Behavioral competency is not enough for these Knowledge based organizations. They need complex technical competencies, Techno-behavioral competencies, domain competencies, quality competencies for superior technology transfer, R & D, and superior service 2. Talent supply: Macro level data shows talent availability is in abundance. The ground reality is very different; competencies are not aligned, employability is low. Labor Market supply of competencies do not match the companies’ demand matrix of competencies. Pre-job and post employment competency development is of dire need of the day.

Behavioral Scientists in Action 28 Knowledge based organizations, as for example, Software services, ITES (BPO/ KPO) Contd. Talent shelf life is decreasing: Commitment to organization has diminished, work environment is very stressful, retention is serious problem, no patience, employee change job frequently, immediate money is first priority, the younger generation seem to have very different life plans As knee jerk response, Organizations getting into bonds, variable pay, pay for performance, mechanism to increase control almost to obnoxious level. Reducing further psychological identification and getting into pure transactional relationships; everything is matrix driven no time for vision or innovation. Talent supply is critical theme for management: Talent mix strategy is critical success criteria How much to buy (lateral hire – often 20-30%) How much to grow internally (entry level hire – typically %) pushing cost of development higher

Behavioral Scientists in Action 29 Knowledge based organizations, as for example, Software services, ITES (BPO/ KPO) Contd. Multi geography HR management challenges (uniform corporate HR policies can not work across nations) New theme related to Customer priced Competency emerging (competencies for which customer is willing to pay): strict SLA (service level agreement) deployment & delivery competencies are flavor of the day New theme related to Techno-behavioral competency becoming critical (e.g., configuration management ability, release management ability, technology mentoring ability, Project management ability etc.)

Behavioral Scientists in Action 30 For Manufacturing and Auto sectors Competition is too severe, growth is sudden and at a never seen before level, volume pressure, cost pressure, reducing margins are normal events Line Mangers (in the upper middle level of the hierarchy) moving up in the hierarchy based on core value chain competencies, organization is heavily dependent on these employees; there is scarcity of supply and it takes very long to develop these talents. Unfortunately they have severe deficiencies in People Management Competency-cluster and Business management Competency-cluster. Both these competencies are too critical to function effectively on the job (external supply from HR service and Finance service proving to be futile) Salary hike to attract and retain has gone high disproportionately, making cost of Management too high in comparison to compensation to employees in operation. Employee satisfaction index is going for toss.

Behavioral Scientists in Action 31 The issues from current reality, mentioned above has brought Competency Management, Organization design, OD into the centre stage. These challenges are opportunities, in near terms, for you my colleague listeners If you are planning to come to India to set a shop you are going to face these Challenges and consequent opportunities To the extent Indian scenario matches with business metamorphosis here in South Africa these will emerge as ground reality here too. Hope the insights will be of some help to you.

Behavioral Scientists in Action 32 Revisit the Objectives (contd.) Objective: Insights for HR-Professionals and Enterprise owners based on macro level secondary data and ethnographic approach Ideas about setting up business in India specific emerging Industries Ideas about specific business opportunities for AC-professionals and Management consulting in general

Behavioral Scientists in Action 33 Thank You!