Someday, I wish I can prove Jack Welch wrong!
Welch introduced a fresh and innovative organizational leadership style to GE during his time at GE. During his 20-year reign at GE, based in Fairfield, Connecticut, Welch developed a ranking system that put employees in one of three categories. The top 20 percent were "stars," the middle 70 percent were the crucial majority and the bottom 10 percent were weeded out. ("Jack Welch discusses winning method for cultivating leadership," 2005 in this site).
Almost every other company does this now.
There shall be stars, cores and the rest to be moved out or fired.
That’s what this post is all about – about how India is slowly turning into America. That the management model has changed!
India and Japan were known for job security, lifetime employment and therefore loyalty from the employees. Today, corporate are fast moving into the “hire and fire” model. And that’s why I hate when Mr. Welch says that the bottom 10% is to be weeded out. That it is essential for companies to identify the stars, cores and the bottom boxers and fire the bottom boxers.
It’s quite an ironical situation. There was a time, when there were unions, and there were labour laws made to protect labour from being exploited by the profit centered organizations. Today, I think even the managers themselves are not protected and can be fired anytime!
Cutting costs would become very important to companies. What is a huge cost in most companies? It’s the manpower cost – and I am not even talking about the labour category.
It’s the people at the top who will always be under the hanging sword. And why?
Because most of these people would be the experienced lot, which means their cost would be even higher. Therefore tolerance to non performance will be close to zero. And the sad part is that non performance could mean anything from no effort to no result to “I just don’t think he fits the profile”. Moreover, the good news for corporate India is that, India is a very young country, which means the companies can get better talent at a lesser cost and therefore the company can do without the costlier experienced lot.
Do I sound cruel?
But I think that’s a reality that each one of us relying on Corporate India has to be aware about; that careers are becoming shorter and that you are needed only till you provide value for the money that’s being given to you. And its no news that today, talent in India is highly over priced. As this continues, careers are bound to become even shorter, because even the younger ones would start becoming unviable for companies.
The funny part is companies today talk about loyalty too! How amusing!
How can we even expect loyalty from employees when they know that they can be fired any time!
Also, the highly acclaimed IT/ software boom in India is lot about the English speaking, intelligent manpower that comes at a lesser cost. With the dollar value coming down, the cost advantage from manpower would reduce even further. Here too, IT is a field that would be able to survive with freshers, who would come at a lesser cost than the experienced lot, a large number of them who would be doing the same kind of jobs as the freshers would!
And there are a number of questions –
With the retirement age as 60, and a lot of companies not really tolerant about holding people that long, where are those people going? What’s happening to them?
How are they asked to leave? Are they given VRSs or are they just asked to find different jobs? And even then, are they really able to find jobs?
And how are they getting affected in this whole scenario?
As India runs forward with tremendous speed, should we stop a while, and take another look into the management model that has found its way into India? Or is it going to be America all over the world?
Or should we think of some protection mechanisms in place before tragedy strikes?
So, to me I have found one more topic that I can do my PhD on, if at all, I do it any time in life ;-) And I also know who would use my study the most.
Retirement Planning would become one of the most important things in all our lives. Employees and employers will make hay till sun shines, either way!
And people will prepare for a time when roses will disappear. Insurance companies will use my study to frighten people with data about, the number of people who are being fired, the sector that this happens most, and the hardships of such a reality!
Maybe they would call it “Early Retirement Planning” or some other fancy name! But that’s the financial product which will take the lime light!
Welch introduced a fresh and innovative organizational leadership style to GE during his time at GE. During his 20-year reign at GE, based in Fairfield, Connecticut, Welch developed a ranking system that put employees in one of three categories. The top 20 percent were "stars," the middle 70 percent were the crucial majority and the bottom 10 percent were weeded out. ("Jack Welch discusses winning method for cultivating leadership," 2005 in this site).
Almost every other company does this now.
There shall be stars, cores and the rest to be moved out or fired.
That’s what this post is all about – about how India is slowly turning into America. That the management model has changed!
India and Japan were known for job security, lifetime employment and therefore loyalty from the employees. Today, corporate are fast moving into the “hire and fire” model. And that’s why I hate when Mr. Welch says that the bottom 10% is to be weeded out. That it is essential for companies to identify the stars, cores and the bottom boxers and fire the bottom boxers.
It’s quite an ironical situation. There was a time, when there were unions, and there were labour laws made to protect labour from being exploited by the profit centered organizations. Today, I think even the managers themselves are not protected and can be fired anytime!
Cutting costs would become very important to companies. What is a huge cost in most companies? It’s the manpower cost – and I am not even talking about the labour category.
It’s the people at the top who will always be under the hanging sword. And why?
Because most of these people would be the experienced lot, which means their cost would be even higher. Therefore tolerance to non performance will be close to zero. And the sad part is that non performance could mean anything from no effort to no result to “I just don’t think he fits the profile”. Moreover, the good news for corporate India is that, India is a very young country, which means the companies can get better talent at a lesser cost and therefore the company can do without the costlier experienced lot.
Do I sound cruel?
But I think that’s a reality that each one of us relying on Corporate India has to be aware about; that careers are becoming shorter and that you are needed only till you provide value for the money that’s being given to you. And its no news that today, talent in India is highly over priced. As this continues, careers are bound to become even shorter, because even the younger ones would start becoming unviable for companies.
The funny part is companies today talk about loyalty too! How amusing!
How can we even expect loyalty from employees when they know that they can be fired any time!
Also, the highly acclaimed IT/ software boom in India is lot about the English speaking, intelligent manpower that comes at a lesser cost. With the dollar value coming down, the cost advantage from manpower would reduce even further. Here too, IT is a field that would be able to survive with freshers, who would come at a lesser cost than the experienced lot, a large number of them who would be doing the same kind of jobs as the freshers would!
And there are a number of questions –
With the retirement age as 60, and a lot of companies not really tolerant about holding people that long, where are those people going? What’s happening to them?
How are they asked to leave? Are they given VRSs or are they just asked to find different jobs? And even then, are they really able to find jobs?
And how are they getting affected in this whole scenario?
As India runs forward with tremendous speed, should we stop a while, and take another look into the management model that has found its way into India? Or is it going to be America all over the world?
Or should we think of some protection mechanisms in place before tragedy strikes?
So, to me I have found one more topic that I can do my PhD on, if at all, I do it any time in life ;-) And I also know who would use my study the most.
Retirement Planning would become one of the most important things in all our lives. Employees and employers will make hay till sun shines, either way!
And people will prepare for a time when roses will disappear. Insurance companies will use my study to frighten people with data about, the number of people who are being fired, the sector that this happens most, and the hardships of such a reality!
Maybe they would call it “Early Retirement Planning” or some other fancy name! But that’s the financial product which will take the lime light!
4 comments:
good article and great point....it certainly is turning into american corporate world everywhere u go! it is good for the competition it will always keep u active and u`ll know ur job is on the line and when stakes are high onus is on u to perform....it will certainly take india forward....:)
of course i agree with ppl will have to take ERP as u mentioned it will certainly give the chance to new generation!!!
Sad part is u wont be able to survive for long term...but to get something u have to give something....:D
You make some good points there. But somehow, ironically, being part of the corporate world that you talk about, I hardly feel much for all these people or think much about our impending 'doom'.
I mean, am thinking 'Yeah, am working now. Yeah, I'll probably lose my job, thanks to Mr. Welch. Yeah, I'll probably find another one somewhere. Or maybe I'll do well in some other field and won't have to stick my ass out in the corporate world anymore.'
good macro analysis of present corporate employment scenario..and definitely, we must be aware of such concerns before they strike us from blue... However, I think we must be careful in taking too extremist a stand against US as honestly, we owe a lot to US in very many ways we dont even realize..its just that we have been copying blindly and hence the negatives...
really true and factor of loyality and dedication to the caompany your point is valid. i apprecataie your story.
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