Tuesday, February 24, 2009

Abundance of myopia during recession...

What I have to come to realise is that life is mostly guided by myopia and decisions prompted by herd mentality. Its truer for professional life. Board meetings (and matings) increase the incidences of myopia.
Add to that - "recession", "crisis", "profitability target", people just go helter-skelter. The scene becomes like a bull being shown a red cloth.. even a 50 meter ditch beside the red cloth cannot stop the bull from attacking towards the cloth.
Let me put some perspective to my frustration. There was a decision taken in the division of the company where I work. A decision not to give promotions for the year 2008-09.
Initially, I, being a part of the herd, accepted the decision and saw nothing wrong in it. Yes thats how you manage cost and improve bottom line. It is definitely a hard decision but a required decision in recessionary times !!
But as I was digesting the decision, in a week or two, I actually started detesting the decision.
An organisation's basic strength is the collective ability (talent/merit) of the people working for the organisation, as the only business mantra that works is efficiency.
Efficiency can be seen as a factor of two variables:
  • Satisfaction/happiness index of the efficient talented employees
  • Proportion of inefficient employees in an organisation
This simply implies that incentivise the efficient people and de-incentivise the in-efficient people. But thats a tough, very tough for management to implement.
  1. Who all are efficient? It is the second most difficult decision for management to take. How do we benchmark and rate efficiency? However difficult decision it might be I think that it is always a long term thinking to follow meritocracy in a corporate profit centric business. Since it is a tough decision to judge efficiency and there can be lot of heart burns if the judgement is not right, the processes to make the judgement will improve with time once there is a dictat that meritocracy has to be followed. The subjectivity of the decision in measuring efficiency will reduce with improving processes and increasing transparency.
  2. Who all are in-efficient? This is the most difficult decision for management to implement. Ironically it is found that it is the most easiest decision for the peers to arrive at !!. For management, it is the most difficult decision because to follow meritocracy, the inefficient people have to be demoted, their salaries need to be cut. This is certainly too much to expect in our Indian democratic, risk averse and non transparent corporate culture.

So what we end up doing is taking the easier route. Take a blanket decision. Cut all salaries by 25% or stop all promotions or stop all bonuses.

Between these three decisions, I would still prefer the third option - stopping all bonuses. Thats a clear result of business not doing well. Salary cut is too drastic and dangerous. Stopping promotions is simply foolish and myopic. Meritocracy and recognition of effort gets completely murdered.

It is a recessionary measure during recession.

But who would stand up and show this light to management. I cant. Its too late when I realised.

1 comment:

  1. Anonymous3:42 PM

    First of all its never too late. In fact now is the best time to review especially since Bonuses have been handed over..

    I think meritocracy and professionalism is all bs. The one who beats his dhol the loudest wins.

    Good work gets recognized locally and a person earns respect from peers, while with bull cr*p you get ahead but then every one knows.


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