ORC Sightlines

February 2010

In this issue:

Connecting the Dots: Demonstrating HRM’s Integral Link to the Business

HR specialists and business partners spend a lot of time coaching business leaders through the various HR management processes, teaching them how to fill out the forms and use the tools, how to make decisions about pay or potential or organizational structure. Along the way, we try to make clear why all these processes are important and support the business strategy. But we’re often more successful with communicating the “how” than the “why”.

ORC’s Global Talent Management Network tackled this issue at its recent meeting. Sharing their companies’ various practices, network members, who are senior-level talent management leaders in large multinational corporations, compiled a basic five-point approach to “connecting the dots for business leaders”:

  1. HR Structure. Give business leaders one point of contact through whom they can access any HR service needed and who will present all the disparate parts of the HR function to the leader as a unified whole in response to business issues. This business partner model is common in today’s organizations, but has many variations. In the past few years, we have seen a trend toward tasking senior-level HR partners with also running one or another of the HR functions, such as talent management, or embedding talent managers in the business units to provide the businesses with more informed support. An alternative structural solution is to create HR teams aligned with specific populations, so that all senior leaders or all technical staff across the global corporation are supported by the same business partner, compensation specialist, talent manager, etc., who all work closely together.
  2. HR Strategy. Instead of presenting business leaders with separate plans for what the different HR functions will be doing, create one holistic people strategy that shows clearly and simply in the language of the business (rather than the language of HR) how the HR function will be contributing to achieving business objectives.
  3. Communication. Incorporate the people strategy as part of the overall business strategy. Let the CEO, rather than the SVP of HR, deliver its messages to the Board, the leadership, analysts, employees and so forth, just as he or she would explain any part of the business strategy.
  4. Implementation. Launch the HR cycle as one system rather than separate processes that rain down on managers at different times with communications and instructions coming from different people and without clear linkages one to the other.
  5. Metrics. Along with other business metrics, publish people metrics that demonstrate progress toward goals of the people strategy. These metrics would be different than those often reported on HR scorecards that report efficiency or results of various HR processes. While HR might continue to track many of these things for its own use, business-oriented people metrics would show—clearly and simply—the business impact of HR’s efforts.

For more information about these concepts or to find out if your company might be eligible to participate in the Global Talent Management Network, contact Jodi Starkman, +1-212-852-0394, or Michal Fineman,+1-212-852-0354.

Challenges to Managing Redundancies in Asian Countries

U.S.-based employment lawyers and compliance professionals, accustomed to the “at will” employment model that prevails in the U.S., are often vexed by the hurdles employers must clear to fire employees in other countries. The Asian powerhouses—China, India, and South Korea—are excellent examples, as participants in a Global Workplace Compliance Network webinar learned last month. The employment relationship in these countries is defined by individual employment contracts, governed by statute, or both. Employers need to be aware of how these instruments impact their ability to downsize the workforce or even get rid of poor performers.

In India, if “retrenchments” (layoffs) are necessary, how an employer can terminate employees depends on whether the employees are considered “workmen” or not. Workmen—generally those in nonmanagement jobs doing “manual, unskilled, skilled, technical, operational, clerical or supervisory work”¹— are entitled by law to one month’s notice in writing and 15 days of compensation for each completed year of service. The termination of nonworkmen (that is, those in management or administrative positions), is governed by their employment contracts. Culturally, though, it is best to invite nonworkmen to resign voluntarily.

Chinese employees are governed by employment contracts and statute. Cutting costs is insufficient reason under the law for laying off employees, and even if workers are terminated for cause, they are entitled to notice and severance. The best approach if an employer wishes to terminate an employee for nonperformance is to get the employee to resign. Severance in China is one month per year of service, capped at three times the average local wage. If an employer needs to lay off large numbers, it is best to reach an agreement with employees for mutual termination.

South Korea is dubbed “the California” of the Far East because of the strong legal protections it affords for employee rights. Employers who terminate without having negotiated a voluntary arrangement with employees have to go to Korea’s labor tribunal. Since employers lose 97 percent of cases brought to the tribunal, it is wise to work out a voluntary package instead. There is no notice period necessary for voluntary termination. All terminated employees (even those terminated for misconduct) are entitled to at least 30 days’ pay per year of service, so that is the baseline for negotiations.

In each of these countries the ins and outs of employee rights are complex. For Americans, the most important lesson is to be aware of the differences both in culture and in expectations about the employment relationship. Terminating employees in these countries requires employers to negotiate in ways they may not be accustomed to in the United States.

The next GWC Network webinar on April 20 will present employment law in Central and South America. For more information, contact Nita Beecher at nita.beecher@orcww.com or +1-212-852-0436. Thanks to the Asian employment law experts who contributed to the January webinar: Shalini Agarwal, Esq., Partner, ALMT LEGAL (India); Brendon Carr, Esq., Attorney, Hwang Mok Park, PC (Korea); and K. Lesli Ligorner, Esq., Partner, Paul Hastings (China).

  1. Industrial Disputes Act, 1947, §2

Three ORC Surveys Win Top Honors from Mobility Website

Expatica HR, a provider of online information and conferences for HR mobility professionals in Europe, has just announced the winners of its 2008/2009 Top 5 HR Industry Survey Awards, and ORC has placed first, second, and third. The first place award went to the ORC Worldwide Flash Survey: Cost Savings Initiatives 2009, which Expatica lauded for being “a topic of value and interest to the HR profession, presented in an easy to read and digest form.” Noeleen Docherty of Cranfield School of Management, one of the judges for the awards, described the Flash Survey as "a current and timely review of the impact of context on the use and management of expatriation in a tight economy”.

Second and third place on the top 5 list went to two other ORC studies: the 2008 Worldwide Survey of International Assignment Policies and Practices and the 2008 Dual Careers and International Assignments Survey.

ORC conducts a variety of surveys on a regular basis to help employers benchmark their international assignment programs. To learn more, visit the expatriate benchmarking surveys page of ORC’s Web site or contact Samantha Blackhurst. In addition, ORC can help you conduct a Policy and Cost Compensation Analysis of your expatriate program utilizing its unparalleled database to benchmark costs and model potential savings.

Filling the Pipeline of Future Diversity Leaders

Diversity and inclusion leaders comprise a relatively small community in the U.S. and Europe. Most have mastered their profession through many years in the trenches. But who will fill their shoes when they retire? Dr. Robert Rodriguez recently raised this question on the Diversity Executive website, challenging diversity leaders to pay more attention to developing their successors.

Two years ago, ORC asked the same question and responded with a three-pronged initiative to advance and sustain the practice of the diversity profession:

  1. We developed a model of Competencies for the Global Diversity Practitioner to help D&I professionals plan their own and their subordinates’ development.
  2. We built the ORC Worldwide Diversity and Inclusion Roadmap, incorporating input from a panel of Chief Diversity Officers in leading organizations, to provide diversity managers and business champions with a model of the most effective strategy for making sustainable change in their organizations.
  3. We created the Foundations of Diversity Strategy and Practice seminar for new diversity professionals, business champions, and HR generalists and specialists who have a role in developing and implementing diversity and inclusion strategy. The Foundations seminar gives people with limited experience in the field a strong basic knowledge of complex diversity and inclusion issues and the most effective strategies for making long-lasting change in their organizations.

Foundations will be offered publicly twice this spring: April 15 in Los Angeles and June 15 in London. Register here. For more information on bringing the seminar in-house so that entire teams can work through it together, visit our diversity and inclusion workshops page or contact Liz MacGillivray in the U.S. or Deirdre Golden in Europe.

 

 

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