Skip to main content

Make your lay-off decisions carefully.

Indian domestic Airlines have started charging overweight cabin baggage. Travel light! This is an old mantra.
I was wondering if there is a formula to calculate depreciation of human resources like we have formula or convention to calculate depreciation of asset. We all have heard of Peter Principle which says.."In a hierarchically structured administration, people tend to be promoted up to their level of incompetence," or, as Dr. Peter went on to explain in simpler terms, "The cream rises until it sours."

Like we do performance ratings, the 360 degree feedback, can we not have a rating for depreciating human resource value? The simple calculation of depreciating ROI on human resources over period of time.

The exact ROI on human resources should be Value added to the organisation minus value lost over a period of time. Off course, we need a benchmark for each position per year or effectively per semester to calculate, the depreciation value of human resources.

Take an example, if an Associate continues to do the same task at same levels and proportion with same level of results and also keeps getting salary appreciation YoY, would that not mean a Depreciation on Human Resources?
Same is true with Senior Executive Positions, Managers at all levels and functions.

We hear lay-off decisions and many a times they are due to poor performance or due to falling in the danger zone of Stack-ranking or Forced -rating scale, or Bell-curve.

Based on my experience and also tonnes of anecdotal evidences, we have found that Managers get promoted when team does good job and team gets fired when team does not do a great job! Managers escape the noose. Are Managers Caesar's wife? Someone above suspicion?
The sword of Damocles always falls on the voice less! 

If a company does not know how to lay-off or cannot answer exactly, why the lay-off happened, they have no right to hire next, at least morally, ethically....

They can follow the below principle...

Practical principles:

1. When in doubt don’t hire, keep looking.
2. When you know you need to make a people change, act.
3. Put your best people on your biggest opportunities, not on your biggest problems.

You fired! Now what?

Creating a climate where truth is heard:

1. Lead with questions, not answers.
2. Engage in dialogue and debate, not coercion.
3. Conduct autopsies, without blame.
4. Build “red flag” mechanisms.
5. If our decisions are not transparent, we lose trust and so suffer attrition and remember  when attrition happens, out of exiting employees, 80% are your best performing employees.

Make your lay-off decisions carefully.


Popular posts from this blog

What is The Hay Group Total Reward Framework

The Hay Group Total Reward Framework A new way of understanding reward Reward strategies must be anchored in business reality to be effective. Which means linking it to your business strategy – and the needs of your employees as well as your organisation. Our Total Reward Framework helps you optimise reward, no matter how challenging the conditions. The issue Remuneration tends to be one of the worst-managed parts of an organisation’s cost structure. But with 10-70 per cent of total costs wrapped up in it, reward cannot be ignored, particularly in a downturn. To be effective, reward programmes must reflect the needs of the business, now and in the future. Only if they are tied closely to company strategy, business performance and the needs of employees can reward programmes deliver the ROI that is needed in tough times[MK1] . The Hay Group Total Reward Framework takes strategy as a starting point – and it focuses on total reward: every financial measure together with no

Aon Hewitt Total Rewards Framework

Aon Hewitt Total Rewards Framework The Aon Hewitt model and approach believes in considering Total Rewards as a business tool and very much linked to overall business objectives! Reward as understood is a very complex mechanism and some efforts of correcting the base pay and titling in a hurry by many MNCs in India have done a bigger crime by trying to correct it by market adjustments without looking at the talent map, complexity and expectations out of role and mapping it against the benchmark. Titles in India are a big misnomer and hardly any survey on compensation ever probes and captures and calibrates the tangible outcome based bench marking! If we dive deep, we will find that the key factors of Education, Experience and Quality of Education, Quality and relevance of experience and education are not calculated granular! A diploma holder technical manager gets the salary benchmarked for the top T-school manager with top quality experience in a challenging and break-through

Well-known interviewing technique “laddering,” the Means-End Chain!

Courtesy HBR article...  The 30 Elements of Consumer Value: A Hierarchy ( Understanding Consumer Decision-Making with Means-End Research - Rockbridge ( Many of the studies involved the well-known interviewing technique “laddering,” which probes consumers’ initial stated preferences to identify what’s driving them In our research we don’t accept on its face a consumer’s statement that a certain product attribute is important; instead we explore what underlies that statement. For example, when someone says her bank is “convenient,” its value derives from some combination of the functional elements  saves time,   avoids hassle,   simplifies,  and  reduces effort.   We have identified 30 “elements of value”—fundamental attributes in their most essential and discrete forms.  These elements fall into four categories: functional, emotional, life changing, and social impact. Our model traces its conceptual roots to the psychologist Abraham Maslow’s “hierarchy of needs,