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Monthly Archives: April 2017

#HR #Word:#Golden #Parachute

golden parachute is an agreement between a company and an employee (usually a high level executive) that provides significant financial benefits to the employee upon termination.

. Golden parachutes are usually reserved by the enterprise for the top level management executive of the organization.

The benefits package mostly consists of a list of specific terms that tells us what the terminated employee will get. 

Golden parachute works in way when an employee is offered a top level executive position in the firm, the contract will usually include a golden parachute clause. The clause clearly states the amount of the severance pay, cash bonuses and stock options that he would get. It is also mentioned the condition under which a golden parachute is applicable. 

The term golden parachute might seem like more towards in employee’s favor like termination is good news. While golden parachutes have benefited the individuals and organizations, but they have also created various controversies.

Following are few advantages of golden parachute:-

1. Reward the Risk takers- Executives are nervous about the fact that any wrong decision might result in losing their current jobs, so it provides cover for such issues. Management needs leaders who are bold enough to take risks and succeed.

2. Reduces probability of takeovers- Golden parachutes reduces the probability of hostile takeovers as the other companies find hostile takeovers less appealing as they would be responsible for the expensive termination packages.

3. Finding executives become easy- The golden parachute is one of the unique selling points in attracting applicants for high level job vacancies. Executives need some kind of security if they are looking to work in an enterprise which has high probability of being acquired by some other firm.

4. Facilitate more amicable severances- Usually when an employee is fired, some tend to retaliate by going against the employer by threatening them to sue or disclose sensitive information. Under this they would part ways without either party feeling anything bad against each other.

5. Removal of conflict- During a merger, an executive may willingly delay or sabotage the efforts as he might be afraid of losing his job. The golden parachute guarantees their compensation, so they may be objective about the evaluation of the merger.

 
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Posted by on April 28, 2017 in HR Word of The Day

 

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#HR Word:#Golden #Handcuffs

Golden handcuffs, a phrase first recorded in 1976, refers to financial allurements and benefits that have the objective to encourage highly compensated employees to remain within a company or organization instead of moving from company to company (or organization to organization) 

Golden Handcuff is financial incentive & other benefits offered to key employee as measure to retain them in the organization.

 Golden Handcuff is a method of motivating the employee into staying in the job because of his/her expertise for the company.

Golden handcuff cab be offered in various ways

– Different contractual arrangements

Employer sign contract with individual employee which will give him certain special benefits. These contracts are tailored made for each employee.

-Employee Stock Option

These are long term stock option given to high performing employee which are exercised after certain predetermined period of employee service.

Golden Handcuff as the name suggest are similar to parrot in golden cage. Though financial benefits are lucrative, these are mostly deferred payments. These can be encashed if employee stays with the organization for sufficiently long period of time. In this way employer ensures employee stays with carrot of long term gain.

 

Penalty for early exist by employees

In case employee leave company after agreeing to contract of golden handcuff, there is penalty clause in these contracts. Penalty clause could be end of employment or leaving stock options offered.

Golden Handcuff on one hand offer big financial benefits such as stock options and on other side bind employee by non-compete clause ,non-disclosure agreement.

Also financial gains offered are available after sufficiently long period. Golden handcuff in this way offers no immediate lucrative financial gain but if employee retains for long period and performs well, he can gain from golden handcuff.

 
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Posted by on April 27, 2017 in HR Word of The Day

 

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#HR #Word: #Going #Rate

Going Rate is a part of the compensation & benefit structure of an organization, where the focus is on how the employees are being paid.

 It is basically being paid according to that of the industry standards, or what the other companies in the region are following. Going rate is a part of the competitive compensation for any employees.

Working of the going Rate

1. Benchmarking the compensation & other related policies in the industry

2. Identifying where the company stands with relation to the benchmarked companies

3. If any gaps or shortcomings are present, try to make up for it.

Advantages:

1. Helps remove some of the discrepancies related to compensation for the employees.

2. The employees won’t feel that they are paid below the industry standards

3. Sometimes it is not only the compensation but also the nature of the job which becomes a part of the going rate.

Disadvantage

1. Benchmarking may take a long time & cost involved may also be high

2. Going rate focuses on identifying the compensation gaps that are prevalent in the organization or the industry, but does not focuses on aspects like skill gaps, employee attitude etc.

3. Not all data could be easily available to process the going rate information, as some may be confidential.

Going rate does helps the companies in any industry have a competitive edge over others by means of understanding where the gaps & problems lie.

However, keeping the compensation only related to going rate won’t solve any purpose. The idea should be incorporate going rate along with retention based compensation (extra bonus) & performance based compensation.

 
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Posted by on April 26, 2017 in HR Word of The Day

 

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#HR #Word:#Intellectual #Capital

The term “Intellectual Capital” collectively refers to all resources that determine the value of an organization, and the competitiveness of an enterprise. 

Understandably, the term “intellectual capital” from a human resources perspective is not easily translatable into financial terms.  For all other assets of a company, there exist standard criteria for expressing their value. 

Perhapss, this term could more appropriately be called a “non-financial asset.”

  In an article written by Paolo Magrassi titled “Taxonomy of Intellectual Capital”, 2002, Mr. Magrassi defines human capital as “the knowledge and competencies residing with the company’s employees” and defines organizational intellectual capital as “the collective know-how, even beyond the capabilities of individual employees, that contributes to an organization.”

Although there has been an increasing interest in intellectual capital and an increasing interest in how it might be managed, there has been little written to succinctly describe and define the concept.  

Intellectual capital can include the skills and knowledge that a company has developed about how to make its goods and services.  It also includes insight about information pertaining to the company’s history; customers; vendors; processes; stakeholders; and all other information that might have value for a competitor that, perhaps, is not common knowledge.  

Intellectual capital is therefore, not only organizational knowledge, it is also industry knowledge.  It is the combination of both cognitive knowledge and intuitive/experience-related knowledge.

 

Elements of Intellectual Capital

In all definitions of Intellectual Capital, the following taxonomy can be recognized:

  • Relationship Capital: All business relationships a company entertains with external parties, such as suppliers, partners, clients, vendors, etc.
  • Human Capital: Knowledge and competencies residing with the company’s employees.
  • Organizational Capital: The collective know how, beyond the capabilities of individual employees.  E.g.  Information systems; policies and procedures; intellectual property. (Sullivan, 2000)

Preserving Intellectual Capital?

The problem today in many organizations is employee attrition through layoffs, resignations, retirements, and other forms of employee separation from the company.  We would like to ask employers the following question… Are you sure that when the economy sufficiently turns around, you are able to predict if your most valuable employees are about to walk out the door? Think and Act.

Refer below link on few tips on how to preserve intellectual capital

http://m.industryweek.com/emerging-technologies/protecting-intellectual-capital

 
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Posted by on April 25, 2017 in HR Word of The Day

 

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#HR #Word: #Goal #Displacement

Goal Displacement is a situation in which the original goals of the organization are superseded by the new goals which are developed during the course of time. 


Goal displacement can happen because of many reasons and at many levels, with the only objective of ensuring the growth and prosperity of the company.

 

Organizations develop initial goals to be achieved and for achieving them some methods and rules are devised and followed. But during the course of time, these rules and procedures may become primary and more important than the original goals. 

The new goals may serve the interest of the employees or the management of the organization. This is an inevitable threat organizations face.

 

In cases where the organization’s original goals are already achieved or when the original goals are no longer necessary, goal displacement has positive effects which help to organization to direct its energy elsewhere. For example an organization which was initially intended to fight polio would displace its goals once the vaccine for polio is invented.

 

If the individual goals conflict with the organization goals then goal displacement happens at personal level. Giving more importance to the means by which the goals are achieved than the end results may displace the goals. And also if the long term goals are substituted by the short term goals or if the original goals of the organization are uncertain or abstract, goal displacement takes place.

 

Examples: ln some of the government schools, performance of teachers may be decided on the basis of attendance and punctuality. And gradually these become the key criteria for performance measurement than the way of teaching and results.

 
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Posted by on April 23, 2017 in HR Word of The Day

 

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9 Ways To Make The Wrong Impression On Your First Day

Source: 9 Ways To Make The Wrong Impression On Your First Day

9 Ways To Make The Wrong Impression On Your First Day

 

 

  Recruiters spend six seconds per resume before deciding whether an applicant is a good fit.


  • How fast? When it comes to hiring:

    • Recruiters spend six seconds per resume before deciding whether an applicant is a good fit.

    Interviewers “know” within

     10 seconds whether a      candidate is right for the job.

As a job seeker, if you make it past these 16 grueling seconds of judgment and get hired, you’re still not home free.

No, now it’s time for the next round of judging: your first day of work.

Put your best foot forward by avoiding these nine off-putting behaviors:

1. Showing Up Tired

Fact: fatigue kills your performance and productivity. Don’t give your employer second thoughts on your first day. Get plenty of rest and show up ready to bust your butt.

2. Dressing Inappropriately

People judge books by their covers, wines by their labels, and you by your first-day attire. You should know what the company dress code is by now, so pick a clean, wrinkle-free outfit that reflects it. While you’re at it, make sure you’re hygienically sound.

3. Oversharing

Being an open book is fine, but tone it down at first. Your new co-workers probably aren’t ready to hear why you were let go from your previous job or that you conceived your 16-year-old son on a first date in high school.

4. Complaining

Your parking spot is a mile away, the training for new hires is putting you to sleep, and you’re not that fond of your cubemate. Annoying? Perhaps. Worth mentioning? No. Workplace negativity is toxic and will send your new co-workers running.

5. Flirting

Are you there to work or find a date for Friday night? Even if your company is all right with office relationships, jumping into one right away brings your professional brand into question.

Would you rather be labeled “the new guy who’s amazing at sales” or “the new guy who’s dating Jane”? Establish yourself first, then decide whether dating Jane is worth it.

6. Saying ‘No’ To Lunch Invites

As the new face around the office, you’ll be invited by co-workers to lunch, coffee, happy hour, and other events outside of the office. Don’t turn them down. This is how you become part of the company’s family, an important step for both personal and professional growth.

7. Trying To Make Your New Job Like Your Old Job

Organizations have deeply rooted ways of doing things. If you come in and insist others do it your way, it’s not going to go well. I have a good friend who experienced this recently. He works for a company with a fast-paced, startup mentality. A new guy just joined from the slow-moving corporate world (The Land of Red Tape, as I like to call it) and continues to add in the extra steps and checks he’s used to.

It’s fine to make suggestions, but first ask yourself why you’re making them. Do you really see room for improvement or are you just being stubborn in your ways? If it’s the former, go for it; if not, then let go and move on.

8. Forgetting To Say ‘Thank You’

It takes time to train new hires. Even those with years of experience need to learn the nuances of the company and its culture. So thank co-workers who take the time out of their busy day to help you, even if all they did was point you to the nearest restroom.

9. Concealing Your Excitement

Excitement, like negativity, is contagious. The difference is that excitement is a great feeling to catch. It’s easy for long-time employees to lose sight of why their job is so great. Having a new, excited face around the office is an excellent reminder. If you’re that face, people will be drawn to you.

None of this is to say you should lie to your co-workers or not be yourself in front of them. Just be a more tactful, selective version of yourself for a while.

P.S. Sound like too many things to concern yourself with? We agree. That’s why, in addition to recommending the behavior above, we encourage you to be aware of your own judgements and give the next new employee a break.

 
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Posted by on April 22, 2017 in Being HR, Uncategorized

 

#HR Word:#Global #Village

The rise of multinational corporations has multiplied the challenges of HR managers while successfully bridging the gap between nations. This state of business in the world is reflected by the term – Global Village

The rise of multinational corporations has increased the diversity between employees in an organization. Today, HR managers are entrusted with the task of not only looking for skills and knowledge, but cultural adaptability also

Global employee mobility has increased manifold in the last decade and today, therefore, employees need to be groomed for global assignments.

For a company to sell its product or offer services in a foreign country, it should first study the cultural scenario in the country. 

There have been cases where a wrong product was placed to the wrong group of people in the foreign country and the company had to move out even before it settled down in the foreign land. Workers who are entrusted with a global responsibility need to have a working knowledge about the foreign language. The company must ensure that the workers are provided adequate training.

Example – American Express has its main customer service centers based in India and Brazil. The Indian employees are imparted training on the English language – both American and British – so that they can cater to America, United Kingdom, Australia, and other English-speaking populations. The Brazilian employees cater to Latin America, Spain, and other Portuguese/Spanish-speaking populations.

One of the most important areas in Human Resource Management is cultural training and cultural integration. HR managers must ensure that workers going for global assignments understand the foreign country’s culture. Along with culture, training must be provided about legal regulations because what might be considered legal in one country might be banned in another.

Some of the other challenges put forward by the Global Village

Tax Regulations – A company’s operations in different countries would be taxed differently based on the tax regulations of each country. It becomes important for a company to have a department which works at a global level to ensure that the operations adhere to tax laws, customs, import restrictions, and similar regulations.

Government Regulations – Before setting up the business in the new country, it becomes important to have all the necessary permissions and adhere to the employment regulations and business regulations of the new country. For example, in some countries, it becomes necessary for a foreign company to enter into a Joint Venture with a local company if it wants to set up its business in that country.

Availability of Resources – A company would need access to raw materials, supplies, and equipment for setting up its business in the foreign country. Along with these resources, it is important that there is adequate availability of skilled-labour in the foreign country.

 
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Posted by on April 22, 2017 in HR Word of The Day

 
 
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