-may-19

BUSINESS MANAGER | MAY 2019 3

IN THIS ISSUE

11Positive side of organisation politics

There isnodenyingthe factthat inspite ofpeopleviewingpoliticalbehaviourwithdisregard,it is

pervasive in all organizations. In fact, effectivemanagers are often those who are able toemploy appropriate political tactics to furthertheir organizational goals. An article by Dr. Shabnam Priyadarshini

08 Peter principle revisited

Corporate career must be based on strongstakeholder concerns at every stage. It must be

included inthemanagementcourses andin theentranceexams and ininterviewsand midcareer levelmust takecourses/

examinations to become eligible for top posts. Itis then left for the individual to choose to ignoreor respect. An article by Hari Parmeshwar

IN EVERY ISSUE

Response

From the Editor’s Desk Guest Column by Dr. Vinayshil Gautam

0506 07

Diversity-inclusion and all that

10 People vs. Production mindset

Today, there is need that engineers shouldbe people minded and to understand thefeelings, problems and suggestions ofemployees are properly attended to. Thenautomatically the productivity and efficiencyof employees will increase and they will beable to become successful engineers andcontrol the cost of production also. An articleby Deepak Pandey

13Role of HR in Start-ups

HR needs to align with the new anatomy ofbusiness, its ever changing needs and challengesand foresee potential opportunities. Only if HRrealigns its own function and the team's talentaccordingly, it will be seen as well contributing,credible and effective. An article bySamruddhi Y Bhaid

C O V E R F E A T U R E

18-44

Irrespective of how

you define a leader or a

CEO, they can prove to be

a difference maker

between success and

failure.

Looking beyond the

obvious:

The future's CEO

CEO LEADERSHIPCEO must developdiscipline of gettingthings done- Anand Pillai

With high integrity, CEOshould demonstrateethical values- LS Murthy

CEO not only legally butalso has to be morallycorrect- Richard Rekhy

CEO has to understandwhole business and notone domain- D.K. Bakshi

CEO must revisit basicsof managing people- Bimal Rath

Knowing CEO :Becoming CEO :Continuing CEO- Dr. Virendra P Singh

What do leaders atgreat workplaces do?- PrasenjitBhattacharya

CEO has to remain trueto himself & selfless- S. Varadarajan

CEO should develop selfawareness and humility- Prof Y K Bhushan

CEO has to be aware oflandminers- Dr. Tanaya Mishra

-BM Editorial Team


IN THIS ISSUE

60CASE STUDY

63 BOOK LEARNING

61-62It should be done in phased manner

By Paramjeet Singh

Build consensus before moving to newpattern By Rakesh Srivastav

15 Creating friendly workplacesfor the differently-abled

Making changes to the physicalinfrastructure of the organization is a veryimportant aspect of making your workplacefriendly to all people. Like all of us, personswith disabilities want a dignified andproductive life and a workplace that treatsthem with respect and allows them to beself-sufficient. An article by Rajeev Bhardwaj

Compliance or Comfort?By BM Editorial Team

66 HR MOVEMENT

54 S.C. PF judgment : Muchconfusion, less clarityA cause for concern is that if the Provident

FundContributionsare payable forthe past, thenthe employerswill have todeposit it usingthe employees'UniversalAccountNumber andEPF AccountNumber. But

then who will bear the cost for pastcompliance and who will handle theproblems related to the same? An article by H.L. Kumar

57

RECENT IMPORTANT LABOUR JUDGMENTS

From the

Court Room

47-53

CASE ANALYSIS

45Solutions provided here are in context to narrated facts & not in general.

Anil Kaushik Management Expert -HR & IR

LINE

Reviving leadership- Read,reflect and act

The leaders of today are being developed,but the shift toward more managers for thesake of automation is being multiplied.Business needs more leaders than machines.In order for businesses to survive and thrive,risks need to be taken, innovation mustcontinue. An article by K S Ahluwalia

17

Round The ClockHow a 24X7 Digital Marketplace Is Transforming BusinessAuthor : Ray TitusMaths of Cash FlowsAuthor : Sanwar MishraAll About Employees’ Pension Scheme, 1995Authors : Ram Niwas Bairwa, Neeraj Bhargava

What went wrong with Jet Airways?

Factory manger and CEO imprisoned for notmaintaining ambulance room

Surat diamond industry gets active labour union

64 EVENT REPORT

ICFAI Business School Mumbai hosts 2nd International HR Conference

“Employee Engagement – DNA for Organisational

Transformance: Paving The Path To The Next Level”

65 HR NEWSWhat is sham contract whileengaging contract labour?

A combination of factors based on facts andmerit of the case will determine whetherthere is an existence of employer andemployee relationship between thecontractor employees and principalemployer. An article by Deepanjan Dey

Owned, Published and Printed by Anil Kaushik at Sun Prints, Ganpati Tower, Nangli Circle, Alwar - 301001andPublished From B-138, Ambedkar Nagar, Alwar - 301001 (Raj.) India. Editor : Anil KaushikThe views expressed in the articles published in Business Manager are those of the authors only and not necessarilyof the Publisher/Editor.While every effort is made to have no mistake in the magazine, errors do occur. Publishers do not own anyresponsibility for the losses or damages caused to any one due to such ommissions or errors.

This issue of Business Manager contains 68 pages including cover

MAY 2019

Good readDr. TV Rao article about what new CHROshould take care of is good read. In additionto all these they should follow the mantrainvolve - inform - inspire so that the peopleperspire. The need to train everyday onculture commitment and competency is tobe emphasised.

Jagan Reddy

Congrats salil! Way to go!

Sawani RanadeCongratulations. This is a bigachievement

Anand Parkash SharmaApt and relevant article...

Yashwant BhaidAbsolutely true and ideas & Insightsarticulated so nicely..!!

LS MurthyThis is awesome ..Great going PrasanthNair..

Bhavesh KothariGreat felicitations for your initiatives.

Narendera Kumar GuptaGreetings. Good Wishes. Rajesh Tripathi

Dr. Virendra P Singh

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ComprehensiveWorkforce of future, jobs & skills required incoming era of digital transformation is to beunderstood in right perspective by theorganisations and young generation as well.

The writers in the cover story have very wellexplained the possible challenges and alsoprovided a road map for addressing theissues. I have so far not read suchcomprehensive views on contemporary topicby well known HR top persons.Congratulations to your team for bringingout excellent subject.

Ram Kumar Sharma

GreatThe title work force of future : jobs and skillswould really a matter of discussion debateand its delivery ND deliverables.

Pramod Kumar Tripathi

FlexibilityAbsolutely agree Mr. Harjeet Khanduja -Understanding fundamentals and learningquick skills, both are equally important. Onecannot learn both skills without flexibility.

Neha Mhetre

RESPONSE


Optimistic futurePerfect blend of possible solutions drawn from theproven past & an optimistic future. Sincerely feltsound and do-able, Prasanth Nair.

Sushma Braggs

India�s Best HR Magazine

Making HR People Complete

EngagementNeed to be ready and update self as lots oftechnology coming to take charge.Engagement, compliance and welfare will be the key for sustainable business.

Ravindra Pareek

UsefulThe relationship of manager and his subordinateis of much importance in organisation but hashardly been taken care of by management.Sanjeev Sharan’s article on the topic is interesting. The tips given by him are very usefulfor both manager and his junior.

Rakesh More

Think of CEO of a business enterprise, you will probably have a image before your eyesof a person sitting alone in a c-suite. The CEO indubitably is the face of corporateleadership but what makes a successful one has always been a matter of conjecture. Inthis digital industrial revolution which is generally termed as fourth industrial revolutionwith fast evolving economy, the CEO leadership is also undergoing change. It is not likeit was to have two or three decades earlier. It has become more complex with newerchallenges.

To lead a company is a complicated business. It's not only about making effortsreflecting in financial numbers to meet the expectations of the shareholders but alsoabout strategic vision, creating a purpose driven culture, employee engagement andcustomers, satisfaction along with building the brand of the organisation's reputationand responsibility to the community in which business operate.

A successful CEO, therefore, has to be a multi-talented person who plays all the roles hehas to play and moves ahead of time. He has to be self reflective and decisive. In today'shyper-competitive and shifting business environment, CEOs normally end up needingcomplex competencies that no amount of work experience can prepare them for. Indigital transformation age, building required skill set among employees in giventimeframe would be a new challenge, every CEO has to address.

Organisations look for CEOs who believe in collaboration and are ready to admitweakness, which can be covered up with the requisite talent available in existing teams.Skills and experience are secondary. Priority is of having high EQ and empathy. CEOsneed to lead with heart & mind.

Apart from leading by example, CEO has to be more credible and responsible. Integrity,ethics and value system will decide the life span of a CEO. Transparency in processes andsystems brings ethics and value system in the organisation. It also enhances employeecommitment. Today's CEO is expected to develop an environment and culture whereboth management and employees are accountable to each other.

I have not pointed about skill set and traits, successful CEOs should have and mistakesthey should avoid, because these all along with other dimensions of CEO leadershiphave been thoroughly presented by experts in their articles/views with interestingexamples in the cover story of this edition.

If you like it let us know. If not, well, let us know that too.

Happy Reading!

With heart & mind

May 2019Vol. 21, No. 11

@ tdanilanilkaushik

anilkaushik


From the EDITOR S DESK

Anil Kaushik


Diversity-inclusionand all that

Dr.Vinayshil Gautam, Internationally acclaimed management expert. Chairman, DKIF

HR without PREJUDICE

There is a heavy overlay of constructs with origins in the westernuniverse of this planet on the Indian thought processes. This is not onlyso in academia but also in the world of work which includes the

corporate sector. One such concept is 'diversity' now upgraded to the conceptof 'inclusion'. For example in United States which is the melting pot of manyethnicities from Mexican to the Chinese the talk of diversity and inclusion isnot only fashionable but rides the crest of the wave. Canada, to a lesser extent,is also in the same mould as USA. Be it Britain or France the chicken are nowcoming home to roost and ethnic groups which were covered by the Britishempire or the French empire have filtered back to the 'Motherland'. This hasbecome an emotive issue and immigration played a major role in some politicalconvulsions even in Germany. In Britain, issues of migration weighed heavilyon the context of the decision on Brexit. The story is not yet over.

It was normal, given the pattern of thinking in some of the major corporateentities of India, where people trained in western context often rise to or enterlaterally the top segment of the decision makers. They obviously have a hugeintellectual baggage and try to make sense of the Indian situation in terms ofthe western categories. The so called Big 4 consulting companies, more oftenthan not, take their governance model from their global governance template.While this is understandable, this approach is not necessarily helpful in theirgetting to be rooted in Indian context. That however is another story. Theseorganisations remain a part of the corporate dream of many youngstersseeking to make the grade. This is much akin to the Indian mother aspiring tobag an NRI son-in-law or a daughter-in-law to what she believes will make thecareer of her child.

In Indian world of work, the issues, while similar to an extent, to thewestern world of work, are not identical to it when it comes to deciphering acohesive workforce. The similarity is, there in some ways, when it comes towomen's issues. But the commonality is not common in all its manifestations.Illustratively in the west some similar jobs give higher compensation to malesthan to females. This is not at all the case in India. Taking the discussionfurther, definitionally, all males are not wolves nor are all of them prejudicedon the gender front. Of course aberrations are there. Aberrations to anyconstruct can be found. However, it is not the same thing as using women's

issues as a stick to intimidate the men folk.Finding this balance is an artful process.

In Indian organisations, there are manybiases which could take over decisionmaking, besides 'exclusion'. Often, thedominant group around a CEO dominatesthe recruitment and the recognitionprocess. That like a centipede can walk onmany legs. It can have the issue ofregionalism, common past employer or evenold boy's network. The list can be large. Theproblem of seeing everything from theprism of 'inclusion-exclusion' may work to apoint but the categories will have to bedifferent from what they are in the west.Like in many corporate environments,ingratiation, pliability or developingconfirming lifestyles to the top, may becomethe high road to inclusion. While inclusionmay emerge, this 'inclusion' is verydifferent from the standard usage of theword 'inclusion' in a western environment.

And here lies a twist in the discussion ondiversity and inclusion.

Unless there is recognition of theIndianness of the situation, the thememusic can get misleading. Consider anexample which is now getting to beprogressively sighted as an example of howindustries can be run without having thekey assets. Ola and Uber are cited asexamples of how a car related industry canrun without the corporate entity 'owning'any cars. There are many takers of this andsimilar other 'marvels'. The writer of theselines knows of a quality Paneer Bhandar inAurobindo Market of Delhi which runs aflourishing trade of milk products andother food items such as breads, cakes,biscuits, health food items like sprouts etc.It only produces its milk products andeverything else is from suppliers (much ascars of Ola) and not from the owners of thisjoint. Many of the kirana stores across thecountry work on this model. No one refersthem. Ola/Uber are constantly referred to.

That's the difference in having an Indianmodel of reference and constantly lookingfor frameworks from outside India. Thestory of diversity-inclusion discussion issimilar.

In India, the dominant theme is to mergethe identity of the entrant to the corporateentity into the holistic personality of theenterprise. The 'identity urge' comes in theway

This problem is still to be accepted as anarea of concern. The solutions ofexpediting growth will come not throughimitation alone but finding Indian solutionsrooted in the understanding of Indianpatterns.BM


Advising a young aspirant for an interview to the flagshipone year management program of a reputed ManagementSchool, I suggested some current issues and perspectivesonly to be told that the interview was profile based whichmeans it was entirely based on her CV/Experience. This is,

when in the application for the programme most of the questions linkedto the profile have already been answered and the call for the interviewwas based on such answers besides the score in the relevantCAT/GMAT/XAT exam. More importantly how does the knowledge andawareness of the student get evaluated or is it irrelevant andunnecessary. Say the matter regarding International Trade/Brexit andnearer home NPA's, the agrarian crisis and the vexing unemploymentissue.

With the introduction of Right to Information Act, the groupdiscussion process has been done away with at the IIM's and otherBusiness Schools as it is difficult to justify a subjective evaluation.Comfort is on scores even if it is 10th and 12th standard especially sinceit is objective. Personality and communication and even generalawareness is either assumed or minimally checked in the interviewwhich has lower weight and finally these skills/knowledge it is believedcan always be acquired subsequently. What are important are the scoreswhich show drive, ambition and the profiles show intent andintegration of past, present and the future.

This process yields to selection to the course which then is thebaptism by competitive fire in the hurly/burly of campus life beforeentering the very competitive world of business and corporates.Students get placed and rise through the corporate hierarchy by dint ofhard work and capability. They integrate their profiles and themselvesto the vision, mission and strategic thought of the companies they joinin. Top companies have in place complex competencies matrix modelswhich identify and define key behaviours expected. Best managementpractices such as talent management 9 Box Succession Model of GE issuitably adapted by other companies and other such best practices ofcompensation and Performance management.

The areas concerning legal aspects of business is limited to onecourse in the first year of the management programme if at all and itcovers Contracts/Company Law and an overview of consumerprotection/competition and IPR laws. Labour Laws gets relegated to the

specialized HR students and someof the other functionaldisciplines cover functional areaspecific laws. I recall wagering ina faculty presentation at an IIMthat passing out students may notknow when exactly the title to therefrigerator they purchased fromthe retailer passed to themwhether it was at the retailer'sshop or on delivery or en routeduring delivery.

It is this process then thatproduces the pool from which topmanagement/Directors/CEO'sand Vice Presidents are selected.

The capital market regulatorviz Securities Exchange Board ofIndia has amended the ListingObligations and DisclosureRequirements Regulations 2018based on the recommendations ofthe Uday Kotak Committee.These amendments include andrequire :

The Boards of the top 500/1000listed companies to have awoman director by 1st April2019/1st April 2020respectively.Increase in the minimumnumber of directors to 6 by 1stApril 2019 in the case of top1000 listed companies and inthe case of top 2000 companiesby April 1st 2020.Other provisions regarding

Peter principle revisitedCorporate career must be based on strong stakeholder concerns at every stage. Itmust be included in the management courses and in the entrance exams and ininterviews and mid career level must take courses/examinations to become eligiblefor top posts. It is then left for the individual to choose to ignore or respect.

Hari ParmeshwarHR Consultant,Visiting Faculty at IIM (Indore) & MDI, New Delhi


PETER PRINCIPLE REVISITED

p r o m o t e r s / r e l a t e dparties/remuneration ofdirectors/special resolutionscontinuance of Non ExecutiveDirectors beyond 75 years.Amendments to the definitionof Independent Director/roleof Nomination andRemuneration Committeeenhanced.Amendment to seniormanagement list by includingthat one level below the toprung.

The point is that SEBI istrying to bring greateraccountability from theCompanies and Boards andDirectors and CEO's. Is this reallypossible, when throughout thecareer journey of the people whorise to become eligible for suchposts, very narrow parameterssuch as their profile/their scoresand their visioning of careerswith the vision and mission ofthe Corporate is measured,rewarded and promoted.Suddenly can the goal posts bechanged from self to a concernfor other stakeholders? Take theinstance of a top FMCG MNCdenying all charges levelledagainst the company for causinga serious occupational accident ofwaste poisoning on its employeesand the case goes on for 20 yearsin the courts. In the meanwhilethe talented HR person, a topbusiness school alumnus rises tobecome the Head of HR at theheadquarter level of the MNCbecoming a member of the Boarditself. And then social mediathrough the song of a rap singerhighlighting the plight of theemployees becomes viral and thecompany sensing a customerrevulsion and rejection of thecompany's products settles for anunprecedented huge sum assettlement with the affectedemployees. What lessons doesthis episode tell us? Who shouldwe admire more? The careerist,

who was steadfast in protecting the company and rewarded or the rapsinger who brought justice and solace to the victims.

Should not these goals of greater stakeholder accountability beincorporated at each stage in the careers of those who seek to be in thistop level talent pool? Should not the entry level evaluation and coursecontent include mandatorily prescribed content which include the veryconcerns which society and the market regulator choose to prescribethrough a check list of sorts in the corporate governance and LODRRegulations. Should these concerns be reduced to a check list or shouldit be the framework on which all learning and growth is based on. Irecall questioning by email the Dean of one of the World's top BusinessSchools on how he was managing to simultaneously be on the Board ofan International Bank being investigated for bribing the formerofficials of an insolvent bank to under quote the value of financialassets (being purchased by the bank on whose Board he was anIndependent Director) on oath before an insolvency court and at thesame time serving as the Chairman of the country's Financial AuditingAnd Accounting Standards Authority while serving as Dean in a B -School which teaches courses on Ethics and CSR and CorporateGovernance, not to forget writing in the World's foremost businessschool magazine on executive compensation (from where I got hisparticulars and his email id). How does he reconcile thesecontradictions? He replied saying that he does not accept myinsinuations. Just like that he tossed away my question.

So then will such courses make a difference?

The Supreme Court in the case of environment mandated UGC andEducation Boards to introduce environment education. First in 1993and then again a decade later in 2003. It is now being taught at variouslevels. Has it made a difference? I think that is the wrong question? Hasit been ingrained? The answer is in the affirmative. Now it is for theindividual to make the choice in his decisions. Like the Dean or HRDirector of the MNC on the one hand or the rap singer on the otherhand or the millions of customers who compelled the MNC tosurrender.

Similarly the corporate career must be based on strong stakeholderconcerns at every stage. It must be included in the management coursesand in the entrance exams and in interviews and mid career level musttake courses/examinations to become eligible for top posts. It is then leftfor the individual to choose to ignore or respect.

Till then we must concede that those who are not concerned forstakeholders may well rise to become Directors based on thecompetencies desired by the company but in the context of the societythe Peter Principle applies wherein such persons rise to their level ofincompetence. BM


In the present era of globalization and increasing internationalcompetition, a trend away from vertically integrated organizationshas become more and more evident. In fact, most companiesnowadays tend to solely concentrate on their own core competenciesand, outsourcing etc. At this juncture, the first line engineer plays an

important role in getting the work done by their subordinates. Today,engineer are our assets, who provides link between the management andemployees. It is mainly through them that management's policies,procedures and attitudes are transmitted to employees and on the otherhand employee's grievances, opinions and suggestions are conveyed to themanagement. Their way of working and attitude are most tangibleindication of how the company regards them. Thus, the engineers canaffect the employee's productivity and promotes greater employee'ssatisfaction and harmonious relations. The first line engineer help us toinvolve everyone in the company for developing the product, together.

Now, time has changed, the businesses and industrial organisationshave become very complicated units. It is not practical for the owner tosupervise all activities of the organisation, therefore, activities of humanrelations are to be supervised by engineers. The success of an industrialorganisation largely depends upon the efficiency and ability of itssupervision. Engineer is the only person in the industrial organisation,who is in the direct contact with employees. He should provide goodworking environment to employees. He must motivate them to get more andbetter employee's output and should be habituated to understand happinessof employees should be his own happiness. If engineer of an organisationconsiders, the employees as a tool of production and does not realise theirfeelings; such employees can never be fruitful to the organisation and suchorganisation can never be successful in achieving its predetermined goal.Today there is need that engineers should be people minded and tounderstand the feelings, problems and suggestions of employees areproperly attended to then automatically the productivity and efficiency ofemployees will increases and they will be able to become a successfulengineers and controls the cost of production also.

Now, there will be a question hovering in our mind that whether theengineer should stress on the higher productivity or in inculcate humanrelations amongst their subordinates. The main aim of every organisationis to get highest production at minimum cost so as to earn the higherprofits but should it be at the cost of employee's welfare. We have to keep inmind that 'Man' is the prime factor in the whole production process in anorganisation. If he is satisfied then production is no problem. So we have tocreate such a kind of flexible environment that people feels doing pride intheir work and put their full potential to achieve the company goal.Engineers should understand the pulse of each and every employee whichwill help in building the harmonious atmosphere in the organisation.Different perspectives, experiences and areas of knowledge will improvethe product, but only if they bring them together.

Engineer should not work as "Mirror people" who just view everythingonly as a reflection of their own behaviour but neither do they work"Window People", who cannot see beyond images in front of them. The role

of engineer should be such that who seeboth ways----in a sensible manners,one's who look out the window at dawn.Does every engineer need to be aproduction minded engineer? Probablyno, but getting their perspective mustlikely to improve their work. Being aproduction minded engineer is not goodfor everyone, but if he cares for theirsubordinates and build trust in them,he will be able to take good amount ofwork from his subordinates andsubordinates will love to work underhis leadership with full enthusiasm andsupport his boss to achieve goals. As anengineer, he should be honest even if inthe adverse situations, even if it ispainful to deal; even if it contradicts theneeds, desires, beliefs and intentions ofthe organisation. Engineer must verywell understand that he cannot finish aproject only by himself alone. He need ateam members to work on it in order tomake it a success. He has to think like ahead and identify the possible problemsthat might arise so that when ithappens it would be easier for the issueto be addressed.

Engineers should apply such type ofsupervision, that subordinates get fullopportunity to develop their efficiencyand ability. They realise their existencein the organisation and they feelthemselves an important part of theorganisation. Engineers should havethe quality of patience in them, if theypossesses this quality, they may takesdecisions keeping in view that thenature and behaviour of theirsubordinates. They should be impartialand must treat all employees equallyand encourage their subordinates inthe process of decision making anddischarging their duties. Engineermust invite suggestions from theirsubordinates. It will make an engineerpopular amongst their subordinatesand they can achieve the target easilyand effectively.

People vs. Production mindset

Deepak PandeyCorporate-HEAD -HR/ER, QH Talbros Group, Gurugram

Today, there is need that engineers should be people mindedand to understand the feelings, problems and suggestions ofemployees are properly attended to.Then automatically theproductivity and efficiency of employees will increase and theywill be able to become successful engineers and control thecost of production also.

BM


Or g a n i z a t i o n a lpolitics, thoughconsidered evil,constitutes anunavoidable part of

one's working life. Power andpolitics play a very importantrole in business environment ofevery organization. Most peopleregard political activity in anorganization with a negativeconnotation which is personallydistasteful as well as damaging tothe organization. However, thereis no denying the fact that in spiteof people viewing politicalbehaviour with disregard, it ispervasive in all organizations. Infact, effective managers are oftenthose who are able to employappropriate political tactics tofurther their organizationalgoals.

Organizational politics hasbeen studied by researchers invarious disciplines of socialsciences and management. Anumber of perspectives oforganizational politics haveemerged through the scholarlywork of these researchers. Theseperspectives differ in theirconnotation, with most workshighlighting the negative side oforganizational politics. It is

usually considered as a foundation of stress and conflict in the workenvironment, having the potential for negative consequences for bothemployees and the organization (Ferris & Treadway, 2012; Child,Elbanna, & Rodrigues, 2010; Chang, Rosen, & Levy, 2009; Miller,Rutherford, & Kolodinsky, 2008). However, there are scholars who havefocused on a more neutral and, in some cases, even a positiveperspective on organizational politics. Some of the positive outcomeswhich have been documented in the literature and are worth furtherinvestigation, are higher productivity, career advancement, higherinnovation, and decision making consensus (Landells & Albrecht, 2017;Hochwarter, 2012; Gotsis & Kortezi, 2010; Fedor, Maslyn, Farmer, &Bettenhausen, 2008; Kurchner-Hawkins & Miller, 2006).

Politics does have its benefits in the form of career advancements,recognition, getting the job done, and promoting ideas. Buchanan andBadham (2008) contended that political behaviour can generate bothpositive and negative outcomes or the individuals and organization.Their study of 250 managers from different industries revealed thatmanagers thought politics could be used in building networks of usefulcontacts, support their initiatives, and achieve objectives.

Landells and Albrecht (2017) studied perceptions of employeesacross three organizations using qualitative analysis. They interpretedthe participants' perceptions based on how individuals defined,described, and perceived outcomes of organizational politics. Fromtheir study, four discrete categories of employees emerged on the basisof perspectives held by the participants.

Reactive : This category of employees has a reactive or a detachedperspective on organizational politics. They regard politics assomething taking place at a distance and actively avoid it.

Reluctant : A second group of employees who are reluctantparticipants in organizational politics. These employees see politics assly and underhanded, yet at times reluctantly use it to achieve desiredoutcomes.

Strategic : A third category of people have a proactive or a strategicperspective on organizational politics. They view it as a useful strategy

Positive side oforganisation politicsThere is no denying the fact that in spite of people viewing political behaviour withdisregard, it is pervasive in all organizations. In fact, effective managers are oftenthose who are able to employ appropriate political tactics to further theirorganizational goals.

Dr. Shabnam Priyadarshini Chairperson, OB/HRM, Institute of Management Technology, Hyderabad


POSITIVE SIDE OF ORGANISATION POLITICS

that can be employed in either self-interest or the organization'sinterest.

Integrated : The fourth group of participants perceiveorganizational politics as fundamental and integrated, where politics isconsidered central to the flow of decisions and information in anorganization.

Based on a comprehensive qualitative analysis, Landells andAlbrecht (2017) also classified political behaviour into five all-encompassing categories. These categories also correspond to the fiveestablished bases of organizational power : connection power,information power, coercive power, positional power, and personalpower. The five categories were :

1. Building and using relationships : Behaviours that are includedin this category are using informal processes and relationships to getthings done; building key relationships and networks for using infuture; building coalitions of support for ideas including lobbying.

2. Observing and interpreting the decision making context : This category includes behaviours used for gettingorganizational information including gossip and rumour. Alsoincluded in this are behaviours used for interpreting in the context ofdecision making - what is the source of information, others' agendas,categorization of right people, waiting for the right time, etc.

3. Manipulating and undermining others : The behaviours includedin this category are bullying, backstabbing, harassing, excluding,withholding information, and putting people down. Manipulation ofothers including disguising one's true intention is also included inthis category.

4. Controlling decisions andresources : This categoryincludes behaviour used bypeople to protect their ownturf; how people positionthemselves to controldecisions, and how peoplegather resources to developtheir power base.

5. Building one's personalreputation : This categoryincludes behaviours used bypeople to create impressionsabout themselves at work; howpeople publicise theirachievements (sometimesother people's achievements astheir own) and take credit,sometimes taking all the gloryto basically progress ahead intheir careers.

To conclude, organizationalpolitics clearly has significantimpact on individuals andorganizations. Although there isan acknowledgement of manypositive outcomes oforganization politics, thisphenomenon is predominantlyseen in a negative light. Mostresearchers on perceptions oforganizational politics continueto focus on the negative aspects.Even most measures available toassess the perception oforganizational politics happen tobe negatively biased. Traditionalnegatively framed definitions oforganizational politics need to beextended and redeveloped toaccommodate a range of positivepolitics as well. Therefore, thereis a need to develop and study thisimportant phenomenon in a morebalanced manner.

References :Buchanan, D. & Badham, R. (2008). Power, politics and organizational change: winning the turf game, London: Sage Publications.

Chang, C. Rosen, C.C., & Levy, P.E. (2009). The relationship between perceptions of organizational politics and employee attitudes, strain, and behaviour: a meta-analyticexamination. Academy of Management Journal, 52, 779-801.

Child, J., Elbanna, S., & Rodrigues, S. (2010). The political aspects of strategic decision making. In P. Nutt, & D. Wilson (Eds.), The handbook of decision making. Chichester; Wiley,pp.105-137.

Fedor, D., Maslyn, J., Farmer, S., & Bettenhausen, K. (2008). The contributions of positive politics to prediction of employee reactions. Journal Applied Social Psychology, 38, 76-96.

Ferris, G.R., & Treadway, D.C. (2012). Politics in organizations: History, construct specification, and research directions. In G.R. Ferris & D.C. Treadway (Eds.), Politicsinorganizations: Theory and research considerations (pp. 3-26). New York: Routledge.

Gotsis, G., & Kortezi, Z. (2010). Ethical Considerations in Organizational Politics: Expanding the Perspective. Journal of Business Ethics, 93(4), 497-517.

Hochwarter, W. (2012). The positive side of organizational politics.In G.R. Ferris, & D.C.

Treadway (Eds.), Politics in organizations: Theory and research considerations (pp.27-66). New York: Routledge.

Kurchner-Hawkins, R., & Miller, R. (2006). Organizational politics: Building positive political strategies in turbulent times. In E. Vigoda-Gadot & A. Drory (Eds.), Handbook oforganizational politics (pp. 328-352). Cheltenham, UK: Edward Elgar.

Miller, B. K., Rutherford, M. A., &Kolodinsky, R. W. (2008). Perceptions of organizational politics: A meta-analysis of outcomes. Journal of Business and Psychology, 22(3), 209-222.

BM


Millennials and Start-upsAs the workforce is getting populated with the first millenials, it is

ushering in winds of change in the corporate world. They hunt forpromising opportunities that fuel their innovative spirit while payingthem good as well as leaving them some space to enjoy their parallelpassion. They no longer plan for long-term secure jobs with fixedtimings. Corporate job no longer means warming seats in closed cabins.Independence, agility, passion, innovation and a Darwinian approach ofliving, is what forms the core of a millenial's ideology of work.

Young professionals are taking more risks than ever, experimentingin diverse fields of work before choosing the right one, and yet theypursue multiple interests parallel. They're more aware about their lifegoals than any generation ever before. Adaptability is growingexponentially in this new corporate scenario, be it adoption of agiledevelopment or experimentations in career, automation of humanefforts, drift of workforce from execution to automation of execution,the Darwinian approach is now as ubiquitous as imperative. With suchadded dynamics to the workforce in the new form of organization, i.e.the start-up, the role of HR is also standing face to face with its Momentof Truth.

There are 4 major challenges for HR as it stands on the brink of itsvery own evolution.

Identifying optimal workforce requirement As larger businesses are increasingly becoming modular in the sense

that they're being comprised of smaller organizations specializing insmaller business elements, providing highly specialized solutions.Thus, any B2C model today, is a chain of multiple B2Bs. The challengethat HR faces here is to identify the correct resource requirement forseamless B2B interaction, internal service/product development as wellas for analyzing opportunities of fitting their business block intomultiple chains, etc. This optimization of workforce is enabled by

automation of executionprocesses. This brings us to thepoint that the HR shall be able tohire those who can minimize theworkforce requirement throughautomation. This means, the HRshould be savvy enough toidentify a scope of automationpossible in their business modeland thus redefine their workforcerequirement. Optimization oftalent (resources) also means howHR can ensure consistentavailability of right talent thatmatches the current and futureneeds of client organizations andat the same time help buildorganizational capacity andcapability in respective domain.HR has to closely monitor entiretalent range to ensure there is nobusiness loss due to non-availability of talent in terms ofquality, quantity or timelines.This proves extra-crucial forstart-ups given the businessimpact of each engagement. Thetalent scatter plot needs to bejudiciously orchestrated in suchyoung and small organizations inthe given sparse demand-supplyratio. Typically start-ups haveresources deployed acrossvarious business functions. HR

Role of HR in

Start-ups

Samruddhi Y Bhaid Business Analyst with AI Business Solutions Start-up in Mumbai

HR needs to align with the new anatomy of business, its ever changing needs and challenges andforesee potential opportunities. Only if HR realigns its own function and the team's talent

accordingly, it will be seen as well contributing, credible and effective.


ROLE OF HR IN START-UPS

needs to deploy processes thatenable such development oftalent with adequateadaptability, flexibility andmatching capabilities.

The right on-boardingAs start-ups thrive on

innovation and experimentativebusiness models, correct onboarding of the incoming youngprofessionals proves crucial.Smaller strength of a start-upenables all its members toachieve same clarity as thebusiness promoters andincreases productivity,ownership and innovationdrastically. In contrast,inadequate or inefficient onboarding of the team memberscan hamper the same productiveand eventually affect employeesentiments. At the same time,the employees should be trainedto adapt to uncertainty, which iscentral to the nature of anystart-up. This can also be donethrough interactive trainingevents at institutions earmarkedfor placements. This is easy toimplement as start-ups haverecently grown to occupy a hugepercentage of campusplacements in the country. Thisnot only helps the organizationsto identify hotspots for intake,but also aids the millenials totune themselves in to the start-up culture alongside education.

In such cases, the recruitingstart-ups should be transparentin terms of sharing the good,bad and ugly aspects of theworkplace requirement. Thiscan be in terms of workcontents, work pressure,extended working hours (/days)and handling multiple tasks. Onboarding proves pivotal rightfrom campus connect, wherethey can instill right confidenceand mindset in the selectedtalent so that they come betterprepared while joining theorganization. Start-ups oftenpose leadership roles to newemployees as early as within sixmonths of joining if not beforeand given the lack ofprofessional experience andmaturity, these young leadersare often overwhelmed withaccountability. Here, HR has tobe watchful of extending rightresources, support and guidanceto help these young leadersadapt ASAP.

Effective employee engagementFlexible working hours, less stringent formal dress codes, open, cosy

workspaces, all-day cafeteria, flat hierarchy, open gaming zones… and ifit does not stop at that, allowing pets in office; with all strategies beingput to use to attract and retain young talent, there is still a large room forincreased employee engagement. This is where HR needs to step inRIGHT NOW! Smaller, younger teams usher in young talent andimmense scope of engagement and bonding. Leadership being in younghands is a great opportunity to foster team building in youngorganizations. Efforts irrespective of success or failure, if rewardedwell, ensure increased employee satisfaction, ownership as well as asharper learning curve for the employees. Start-ups that surpass thefirst threshold of survival in market should proactively modifycompany policies pro-employee benefit. Incorporating certificationallowances, work from home facilities, inter-team mobility, can be somepolicies based on subjective calls, for instance. The HR in particular hasa lot of experimentations to do too!

While the hard furnishings might reflect world-class look andimpressions, millennials today are more concerned about theirindividual capability development, their on-job technical capabilityenhancement, and exposure to explore new technologies, clientexperience and cross-functional exposure. HR has a critical role to playin this space, i.e. to ensure a right balance between hard and soft aspectsof employee engagement.

Becoming artificially intelligentWe have to wear what's in the wardrobe! Use of artificial intelligence,

machine learning and automation in general is the very fabric ofbusiness value chain of any start-up today. In the same space, findingexperienced talent in the field is more difficult that finding a needle ina haystack, given the nuptial stage of this field in itself. This leaves uswith the only option of handpicking capable young talent and turningthem into pioneers of this field. This can be seen as a great opportunityrather than a challenge, as these folks jump in citing the learning whileearning opportunity. Thus, it can be used for both the employee's andcompany's benefit as exploration leads to not only learning but alsoprovides newer and novel approaches of solving complex problems withminimal liability/investment.

To sum up given the Volatile, Uncertain, Complex and Ambiguousnature of work at start-ups typical HR practices might fail to createright influence and impact. HR needs to align with the new anatomy ofbusiness, its ever changing needs and challenges, and foresee potentialopportunities. Only if HR realigns its own function and the team'stalent accordingly, it will be seen as well contributing, credible andeffective. The four point agenda of HR thus mentioned above, shall be apositive approach to manage the function and business delivery of astart-up, both efficiently and effectively.

The recruiting start-upsshould be transparent interms of sharing the good,bad and ugly aspects ofthe workplacerequirement. This can be interms of work contents,work pressure, extendedworking hours (/days) andhandling multiple tasks.

BM


The concept of workplace inclusivity is arguably one of themost notable HR ideas of this decade. Globally, organizationsare making extensive efforts to nurture workplaces that notonly represent the true composition of society but alsorespect and cherish different identities. In western

economies where labour migration over several decades has altered thedemographic composition, organizations are putting efforts to makeworkplaces sensitive and welcoming to people of different races andethnicities. Gender inclusivity is another important focus of humanresource managers. Similarly, the need to welcome talent from amongthe differently-abled population is also at the centre of the inclusivitydebate. The national broadcasters in the United Kingdom includingBBC, ITV, Channel 4 and Sky have recently committed to double thenumber of disabled people involved in television by 2020 to make theindustry "more inclusive". Some multinational companies have alreadymade significant strides in ensuring equal opportunities and aninclusive work environment for the differently abled. For example,global retail giant Carrefour Group which has over 10,000 stores in over30 countries employed more than 9,000 people with disability by 2013,making them 2.8% of its global workforce.

When it comes to special people, inclusion doesn't imply only hiringmore people from the category. It also entails creating physicalinfrastructure, sensitive policies and a sensitized workforce.

Differently-Abled People in IndiaThe Census of 2011 put the population of the disabled in India at 2.68

crores or 2.21% of the total population. In urban areas, only 15% of thedisabled people were graduates while the corresponding figure in ruralareas was only 5%. The 2011 Census also concluded that around 36% ofthe people with disabilities were in some form of employment in India,leaving a majority of them out of work. According to the International

Disability Rights Monitor,'Regional Report of Asia', 2005,74% of persons with physicaldisabilities and 94% of personswith mental retardation areunemployed in India.Correspondingly, approximately83.9% of persons with disabilitieswere employed in 2003 in China.

In 2016, the governmentreplaced the Persons withDisabilities Act, 1995 with a morepotent legislation that increasedthe number of disabilities fromseven to 21 and increased thequota of reservation for personswith disabilities from 3% to 4% ingovernment jobs and 3% to 5% inhigher education institutions.While these measures look goodon paper, they have to besupported by adequate efforts toensure that people withdisabilities get an enabling socialenvironment. The private sectormust also devise new strategies tohire and nurture more peoplewith disabilities. This is not just away to exercise our socialresponsibility but also ensurethat we do not lose out vital talentjust because he/she is physically

Creating friendly workplacesfor the differently-abled

Making changes to the physical infrastructure of the organization is a very importantaspect of making your workplace friendly to all people. Like all of us, persons withdisabilities want a dignified and productive life and a workplace that treats them withrespect and allows them to be self-sufficient.

Rajeev BhardwajVice President, Human Resource, Sun Life Financial Asia Service Centre, Gurugram

CREATING FRIENDLY WORKPLACES FOR THE DIFFERENTLY-ABLED


different. Intellect and talent arenot exclusive to any category ofindividuals. Come to think of it,our understanding of space andtime would not have been thesame if not for Stephen Hawking.

Lack of Self-DriveIn Germany, businesses are

required by law to fill at least 5%of their workforce with disabledpeople. Organizations who fail tofulfil this quota must instead payan equalization levy to thegovernment. While thegovernment stipulates a quota forpublic sector jobs in India, thereis no law governing theiremployment in the private sector.

Unlike several westerncountries where organizationshave been working sensitively tonot just increase the proportionof disabled people in theirworkforce but also to cater totheir special needs at workplaces,the corporate sector in India stilllacks the self-drive andresponsibility needed for thesame. Barring a few start-upsthathave gained attention for beingattractive workplaces for specialpeople, there is by and largedisregard and ignorance. A lot oforganizations also practice whatis called an 'unconscious bias'.There is also a kind of inertiawhen dealing with this issuesince dedicated efforts to improvepresence and participation ofdifferently abled people in theworkforce requires investment intime and energy as well as infinances.

Setting TargetsRather than wait for

candidates from among peoplewith disabilities to apply and

meet your criteria, it is important to make efforts to reach out to themwhile creating an environment that accepts them as normal employees.It is important for the organizational leadership to push the idea ofdiversity and inclusion by setting clear and achievable targets. Onceyou have set yourself a target of say having 1% of your workforcecomprising people with disabilities, you can set about finding ways onhow to make it happen. Partnering Universities, educationalinstitutions, as well as NGOs working in the field, will allow you accessto candidates with disabilities. At the same time, it is also needed tocreate dedicated programs for training these candidates and trackingtheir progress.

Organizations which make special efforts to hire and nurture PwDoften report higher rates of retention, dedication, and loyalty fromthese candidates. Many organizations have also found that byemploying persons with disabilities they have been better able to servetheir customers with disabilities. At Sunlife, we conduct a program thatsponsors the education of deaf and dumb children and also providesthem with vocational training. A very satisfying outcome of thisprogram has been the fact that almost 90% of these candidates findlivelihoods and also retain their jobs in the long run.

Assistive Technology and InfrastructureWe recently conducted an audit to understand what all can be done to

make our workplace completely inclusive for the disabled workforce. Wehave incorporated those findings and are currently working toimplement them. These inputs include ensuring that the entire officespace can easily be traversed on a wheelchair; door knobs, reading signsand washrooms are accessible from the wheelchair; there are dedicateddesks and lockers that can easily be accessed by persons withdisabilities; even the lighting has to be adjusted to make it amenable fordifferently abled persons.

Making changes to the physical infrastructure of the organization isa very important aspect of making your workplace friendly to allpeople. Like all of us, persons with disabilities want a dignified andproductive life and a workplace that treats them with respect and allowsthem to be self-sufficient. Spending on systems and facilities for personswith disabilities is an investment for everyone as diverse work groupsdevelop better solutions to challenges.

Sensitizing the WorkforceMuch like the physical infrastructure, the mental conditioning of

the workforce at large must also be changed to make it more sensitiveand appreciative towards their differently-abled colleagues. Trainingprograms on diversity and inclusion must educate employees to readilyaccept a wide variety of differences - be it physical, gender-based,economic or of background. Promoting tolerance also flows from top tobottom. When the leadership walks the talk, changes trickle down muchmore easily.

References :https://www.un.org/development/desa/disabilities/resources/factsheet-on-persons-with-disabilities/disability-and-employment.html

https://www.independent.co.uk/arts-entertainment/tv/news/disabled-broadcasters-staff-bbc-itv-channel-4-sky-disability-employment-a8544791.html

http://mospi.nic.in/sites/default/files/publication_reports/Disabled_persons_in_India_2016.pdf

BM

In Germany, businesses are required by law to fill at least 5% of theirworkforce with disabled people. Organizations who fail to fulfil this quota

must instead pay an equalization levy to the government. While thegovernment stipulates a quota for public sector jobs in India, there is no

law governing their employment in the private sector.


Reviving leadership- Read,reflect and act

The leaders of today are being developed, but the shift toward more managers for the sake ofautomation is being multiplied. Business needs more leaders than machines. In order for

businesses to survive and thrive, risks need to be taken, innovation must continue.

K S AhluwaliaExecutive Coach and Mentor- Excalibre, Noida

Let's get this out of the way. Yes, there is a significantdifference between management and leadership.Management by definition is leading from behind;leadership is leading from the front. You cannot be aleader if you are not willing to dig in, take extreme

ownership and be the champion of your people.

Managers without leadership ability have selfish objectives;they work to promote themselves while leaving their peoplebehind. These types of managers are the people who createobstacles rather than explore solutions. Leaders provide guidance,they openly search for solutions, they are transparent and mostimportantly, they truly care for their people.

The Perfect Blend Requires Intentionality. This is not to saymanagers cannot be leaders and leaders cannot be managers. Itbecomes a problem when a manager lacks leadership ability. GreatManagers of others cannot succeed if those managers are notGreat Leaders of Others as well. Think of management asautomated and leadership as human. Managers create processes tomitigate any mistakes. Automation negates emotion, it takes thepeople element out of the equation as people are naturallyunpredictable. People make decisions based on their core purposeand principles. Machines have their decisions given/programmedinto them and there is no variability. They complete the same taskover and over without any variability. People are not able to dothat. Yes, there are jobs that are mechanical in nature, but outsideof that, life and decision making is completely full of variability.Leaders are the people who others run to vs. run away from.Digging in to help a team in need is where credibility and trust isfounded.

People connect and built relationships by working andaccomplishing together. Think about the last time you reallybonded with someone, you were more than likely doing or workingon something together. Could be a date night with your significantother, could be playing golf with friends, or could be an internalpresentation with colleagues. We do not create connection throughorders and automation.

Remember your last"manager".

Did they go out of their wayfor you? Did they help you find asolution to a problem? Did they act as an umbrellafor their people?

If you can honestly answerthose questions with a yes anda reason why, you were in thepresence of a leader.

If you answered no,unfortunately you wereworking for a manager. It is notenough to just follow leaders,we must be leaders ourselves.

Learn from the people youfollow, learn how they areable to understand people.Learn how you became tosee them as leader.

The leaders of today arebeing developed, but the shifttoward more managers for thesake of automation is beingmultiplied. Business needsmore leaders than machines. Inorder for businesses to surviveand thrive, risks need to betaken, innovation mustcontinue. The ideas oftomorrow do not come from theautomated thinking of manymanagers today. BM


Looking beyond the

obvious:

The future's CEO

CEO LEADERSHIP

Irrespective of how

you define a

leader or a CEO,

they can prove to

be a difference

maker between

success and

failure. A good

leader has a

futuristic vision and

knows how to turn

his ideas into

real-world success

stories while taking

the employees

along in their

journey.

COVER FEATURE


No one is born with all the skills of a talented leader. The sparks are there,but true leadership skills are learned

and practiced before they become secondnature. In the new work world, the smartestCEOs are those who are vulnerable, open tohearing what they don't know, and arealways trying to learn and unlearn to keeppace with the evolving work environment.The term "chief executive officer" has beenaround since about 1917, when the modernbusiness management system was firstestablished. Since then, it has evolved manifold in its leadership journey, missionand vision.From being a monarch, to the prime ministerit has become an agile leader today and moving on they have to embrace the skills ofan entrepreneur with collaborative andmulti-facet team leading skills.Organized thinking is another skill in which afuture CEO has to prove themselves. Knowingwhich issues are tangential and which are priorities are crucial for effective leadership.Without organized thinking, problems beginto mount and can conceal the core issues.Effective CEOs have a knack for seeing pastthe obvious.The layers

Adding dimensions to the already complex role is the need to evolve with thedigital explosion. Simultaneously, the visionneeds to evolve. It’s the vision of the CEO thatdictates the future of the company. Withoutvision, a CEO is merely a celebrated facilitator.

An effective CEO find ways to continueexploring and nurturing their vision. Theyalso remain open to the feedbacks. In orderto be an effective CEO, you have to be bothconfident in your abilities and willing toadmit your faults. The ability to be sure ofyour decisions as well as being open to feedback and adjustments is the skill thatevery future CEO needs. A dedicated visionary who can master the duality of effec-tive business leadership is the greatest CEO.How to spot leadership potential

Generally, you’re not going to find effective CEOs standing right in front amongso many of your employees. You need tolearn to spot the raw personality traits thatcan be most proficiently developed into theessential skills of true leaders.

Picking future leaders isn’t as easy as identifying a top performer. Sometimes thesparks are their but the true leadershippotential need to be nurtured and developed. When you’re on the hunt for theeffective CEO of the future be sure to keep alook out for these key traits: Empathy, Poise,Outgoing nature, Attention to detail,Ambition and Optimism.

These characteristics can be good indica-tors of your employees’ future success inleadership roles. These traits, plus the desireto learn and grow, mark the foundation forthe skills that all true leaders must practice.

Over time and with the proper training, mentorship and experience, thesetraits will evolve into essential leadership skills.The rise of emotional intelligence

Emotional intelligence is the highly significant trait in successful leaders. Byunderstanding how others are motivated, leaders can adjust communicationstyles and approaches to better manage their teams.Building confidence

Confidence is essential. Look for poise when picking future leaders. As theyadapt to change and use their current skills to make decisions the confidencewill eventually build and become stronger.Being courageous

True leaders take risks. They have the courage to think what others can’tand do what others don’t believe in. Gathering the strength to speak up forwhat is best for the business, despite fear of failure, is where true leaders canmake all the difference in their roles.Ambitious visionary

Leaders are always planning for the future and have a vision, road map,game plan, of where the business needs to go. Without a defined direction,managers will have nowhere to lead the team.

To spot true future leaders, look for employees who regularly expressambition to go above and beyond what’s asked of them and who show genuine interest in the company’s future.Raising the voice

At the end of the day, no vision or motivation tactic is effective if it isn’tcommunicated in the proper voice. Effective leaders develop a strategic verbal approach to represent all situations and have the ability to communi-cate the vision and goals of the company in an engaging, confident way. Theyknow ensure that their voices are aligned with the way they want their messages to be perceived.What they shouldn’t have

While it is essential to understand the must-have’s of an effective CEO, it isequally important to know what they shouldn’t be.Narrow-minded

Great leaders need to be able to see the big picture, accepting lots of different ideas and filtering out the best ones. The narrow-mindedness and‘Me’ culture doesn’t work for those who want to become skilled leaders.Unaligned values

When looking for future CEOs, in any era, it is important that their core values align with that of the organisation’s. Having a leader with different corevalues is a nightmare waiting to happen.Showman - No

Leadership is not a solo-venture. Effective leaders take everyone along,they are great team players. While independence often seems like anadmirable trait, a great leader shouldn’t be a one-person show. They shouldmodel interdependence and teamwork.Done learner

The mark of a really good leader is a life-long dedication to learning. Ittakes humility for people to admit and understand that they don’t knoweverything—and those are the kinds of p eople everybody want tofollow. A true leader is the one who never seizes to learn.Being the crowd

A good CEO is often the one who brings a new perspective to the organisation and reflects the diversity of interests in the community they’releading. An effective CEO will help the organisation do better as a whole,rather than just continuing to reinforce what it was already doing.

All said and done, if you have the right person at the top, half the battle iswon. Finding the right fit at the top has always been the most critical thing. Ithas become more crucial in times when technology has taken over. In this scenario, you need not only the soft skills but also the domain knowledge andunderstanding of evolving concepts and adaptability to new ways of working.The openness to new ideas count and the knack to identify and embracewhat’s important and neglect what’s not marks the sign of a new-age effectiveCEO. BM

CEO LEADERSHIPAnand Pillai, MD, Leadership Matters Inc., Noida


COVER FEATURE CEO LEADERSHIP

What are the qualities and traits that make a CEO witheverlasting impact?

AP There are 7 key qualities and traits that make an effective CEO.They are :

1. Learning Agility

a) Learning from the past :

CEOs are only human. Mistakes will happen. But it is importantthat a CEO learns from them to prevent them from happeningagain. I personally believe that there is no such thing as "Failure",except failing to learn from the so called "Failure" orincident/situation.

J.K Rowling in her commencement address at Harvard University(among the top universities for producing CEOs) said : "It isimpossible to live without failing at something, unless you live socautiously that you might have well not have lived at all, in whichcase you have failed by default."

b) Learning in the Present Continuous tense

In the open letter in McKinsey quarterly, September 2017, it is said,"lifelong learning is going to become increasingly central to theCEO's job : maximizing the value and impact of the organization".Affirming this, Harvard Business School professor and a learningengineer at the Chan Zuckerberg Initiative (Amy Edmondson andBror Saxberg) presents an emphatic case on "Putting lifelonglearning on the CEO agenda."

King Solomon, (considered the wisest man in the East) says"Whoever strays from the path of learning, comes to rest in thecompany of the dead". Proverbs 21:16. A CEO has to be a constantlearner and lead by example in setting a 3L (Life Long Learning)

culture in the organization.

c) Learning for the future

As we are caught up in theday-to-day, often it is hard toenvision what the world willlook like in twenty or thirtyyears. "All of our seniorexecutives operate the sameway I do. They work in thefuture, they live in thefuture. Right now, I'mworking on a quarter that'sgoing to reveal itself in 2021sometime". - Jeff Bezos,founder, Chairman, CEO,and President of Amazon,one of the most innovativebusinesses of the 21stcentury. "CEOs need toconstantly update what theyknow - keeping up with thedizzying pace ofdevelopments in themultiple worlds of, forinstance, market evolutions,technology or innovation."(McKinsey)

2. Communication agility(story telling)

From motivating his or her

CEO must develop discipline of getting things done

To be successful, aCEO must have theability to buildrelationships with allthe three mainstakeholders-employees, clientsand investors. In myleadershiptransformationassignments with myclients, the keycompetency/trait thatis being looked at inselecting CEOs, isrelationship skills orability to work withothers. We look forCEOs with highpeople agility.

About the Author

Anand Pillai is the Managing Director of Leadership Matters, a company focusing on building an Intrapreneural culture in organizations. Anand is also a Leadership Coachand Organization Transformation Guru. His recent corporate roles were Sr. Executive Vice President HR & Chief Learning Officer at Reliance Industries Ltd. and before that asthe Sr. Vice President HR & Global Head-Talent Transformation at HCL Technologies Ltd.



team to completing projectsin a timely manner, a CEOmust be able tocommunicate what theyneed, from whom, whenthey need it, and how thingsshould be done.

Caitlin Roberson, Director,Enterprise Marketing atLyft, says "CEOs are theworld's most effectivemechanism for change.They make the world abetter place by buildingremarkable products andteams. How? Through CEOs'stories about why theircompanies exist, what isdifferent/better about them,and how people shouldrespond?" In fact manystudies reveal that there is adirect correlation betweenthe storytelling ability ofthe CEO and thegrowth/profits of theorganization.

3. People or Relationalagility

To be successful, a CEOmust have the ability tobuild relationships with allthe three main stakeholders-employees, clients andinvestors. In my leadershiptransformation assignmentswith my clients, the keycompetency/trait that isbeing looked at in selectingCEOs, is relationship skillsor ability to work withothers. We look for CEOswith high people agility,which understand thepolitical power centers inthe organization, andleverage it for the benefit ofa greater cause.

4. IntrapreneurshipMindset

A CEO must think and actlike an owner (irrespectiveof whether he/she holdssizeable stock or not),seizing opportunities tomaximize value acrossorganizational boundaries,with a sense of personalidentification.

They must be dreamers whotake hands-on responsibilityfor creating innovation ofany kind. They turn an ideawithin a business, into aprofitable finished productthrough assertive risk-taking.

5. Passion

A CEO must have the ability to proactively identify ambitiousgoals and over achieve them. He/She must have limitless thinkingand a self-directed behavior which challenges status quo. Iparaphrase a quote from the Wright Brothers "If everything that isbelieved to be true, is accepted as the truth, there will be littlescope for innovation". In today's competitive world, I can't imaginea CEO without a status quo defying passion.

6. Managing ambiguity

It is mandatory that the CEO understands the big picture. He/shelearns from experience and applies that learning to performsuccessfully under new or first-time conditions. He/She must havea huge inventory of "transferable skills"to effectively navigate theCompany into new and unchartered territory. Transferable skillsare those that are acquired and developed (through employment,education or training) in one situation that can be applied toanother situation.

7. Detail orientation

A CEO must have the ability to break down a complex task intosmaller executable elements, incorporating all relevant details inorder to ensure flawless execution. He/She must have a "hands-onapproach" in oversight of the project, while effectively delegatingto his trained/competent team. He/She must understand thatdelegation is not abdication.

What mistakes lead to the fall of a CEO?

AP In my corporate journey over the last 37 years I have seen manyvery competent and one time successful CEOs fall mainly due tothe following reasons.

1. Becoming larger than the organization that he/she leads.The day the CEO becomes larger that theorganization/company he/she leads, we can see the downfall ofthat person.

2. Not managing the expectations of the board or promoters.Quite often the CEO overuses the autonomy that he/she isentrusted with, and not take the buy in of the stakeholders likethe board/promoters (or largest shareholder). While this maywork, it often back fires when the "autonomous decision" beginsto show signs of failure. Without the stakeholder buy - in orsupport, the CEO then has an uphill task of making his/herdecision work.

3. Not having a Coach/Mentor. Every CEO is "on the stage" forthe majority of his or her work life. But each needs pre-performance quiet and confidential time to be creative, bouncetheir ideas off someone in a safe environment, and explore theunintended consequences of their future actions. When asked,what was the best advice he ever received, Eric Schmidt,Chairman and CEO of Google, recognized it was from JohnDoerr, who in 2001 said, "My advice to you is to have a coach."

Not having a leadership coach/mentor or not heeding to the onethat you have, is increasingly becoming the reason for theshortening tenure of a CEO.

With ever changing business landscape, if CEOs align theircompetencies to the 7 Key Qualities listed above and avoid the 3Pitfalls given, they can be effective in the new normal.

It is mandatory that the CEO understands the big picture.He/she learns from experience and applies that learning toperform successfully under new or first-time conditions.He/She must have a huge inventory of "transferable skills"toeffectively navigate the Company into new andunchartered territory.



How has our view ofleadership at the topchanged, with the currentstate of affairs - wherebusiness leaders have beenput under scanner for theirdeeds?

AP My view of leadership at thetop, has certainly changedover the years, as I have seenall the models of leadershipin my 36+ years of corporatelife. It is now more clear,that the most effective andsustainable model ofleadership is ServantLeadership. While servantleadership is a timelessconcept (beginning from thetime of the Lord Jesus...),the phrase "ServantLeadership" was coined byRobert K. Greenleaf (whoserved AT&T for 38-years,director of managementdevelopment, originator ofthe world's first corporateassessment center etc.,) InThe Servant as Leader, anessay that he first publishedin 1970, Greenleaf said :"The Servant-Leader isservant first… It beginswith the natural feeling thatone wants to serve, to serve

first. Then conscious choice brings one to aspire to lead. Thatperson is sharply different from one who is leader first, perhapsbecause of the need to assuage an unusual power drive or toacquire material possessions…The leader-first, and the servant-first, are two extreme types. Between them there are shadings andblends that are part of the infinite variety of human nature. "Thedifference manifests itself in the care taken by the servant-first tomake sure that other people's highest priority needs are beingserved. The best test, and difficult to administer, is the following evaluation :

Do those served grow as persons? Do they, while being served,become healthier, wiser, freer, more autonomous, more likelythemselves to become servants? And, what is the effect on the leastprivileged in society? Will they benefit or at least not be furtherdeprived?"

This model of leadership when practiced, not only leads toacceptance, but also renders credibility to lead and thus becomeseffective.

Any road map in your mind to develop talents and skills thatgrooms CEOs of the future?

AP During my tenure as Global Head of Talent Transformation andIntrapreneurship Development (T2ID) at HCL Technologies, wecreated an academy called "TOP GUN" to groom CEO/CXOs for theCompany. There we had a 7-7-7-7 path to development each ofwhich had a 7 month period.

What is one piece of advice you would like to offer to thefuture CEOs?

AP Develop a "bias for action"- the "discipline of getting things done" orbasically KKDS! Kar Ke Dikao Sala (Sir or Sahib if you prefer). BM



CEO LEADERSHIPLS Murthy, Chief Operating Officer, Radiant Technologies, Inc., Hyderabad

With high integrity, CEO shoulddemonstrate ethical values

CEO's goal requiresthe execution of acompany's strategythrough buildingalignment, winningmindshare andgrowing thecapabilities of othersto grow business andkeep competitiveedge.

About the Author

An alumni of Osmania University, MBA and a (PhD) scholar, with his three decades of experience, LS has wide-spread global exposure and rich consulting experience withseveral large firms, LS strategically drives value-centric growth and helps develop deeper perspectives in operations and business growth.

What are the qualities and traits that make a CEO witheverlasting impact? Have they changed in the presentbusiness environment from the past?

LS Leadership qualities of an effectively successful CEO is all aboutinfluencing, motivating, and enabling teams to contribute towardsthe effectiveness and success of the organization.

CEO's traits include the ability to take calculated risks, championsinnovation, allows teams to take charge and possess great empathyand compassion, importantly keeps impeccable personal integrityand competitive, dynamic & agile to complex global marketenvironment and thorough business knowledge have everlastingimpact.

Leaders apply various forms of influence - persuasion and relatedtactics that build commitment, create spark in work environment- to ensure that teams have the motivation and role clarity toachieve specified goals/organizational objectives moreconsistently with supreme commitment.

CEO's goal requires the execution of a company's strategy throughbuilding alignment, winning mindshare and growing thecapabilities of others to grow business and keep competitive edge.

Few key leadership essential attributes in any businessenvironment are :

Drive & Positive energy - The capacity to go with healthyvigor at all times.

Ability to energize others - Releasing their positive energy, totake any challenge.

Edge - The ability to make tough decisions, be judicious, to sayyes or no, not may or may not be types!!

Talent to execute - Planthe project and executethe plan diligently.Have passion - (Dreambig, Desire to win,D e t e r m i n a t i o n ,Discipline & Dedication)Believe deeply in whatwe do and sweating it.The three unstatedcharacteristics areintegral necessity -Integrity, Intelligenceand Emotional maturity.

In the present businessenvironment, the digitaltransformation trendsdriving Industry 4.0 alsorequires establishedLeadership competencies,capabilities, communicativeand confidence enhancingprocess driving thoughtleadership.

There are four major trendsin the digitaltransformation : Connectedconsumers, customizedexperiences, empoweredemployees, optimized



production and transformedproducts.

Cross-skilling & up-skillingin emerging technologies &innovation is the key toalign with the changingscenario. Technicalexpertise & leadership skillshave to be agile. Values andself - leadership arereplacing command &control supervision.Companies are looking forleaders with emotionalintelligence not simpletechno smarts.

Emotions guide employeeconnect, motivation,attitude, decisions andvalues have become the newresource to shape workplace behavior, appreciativeenquiry has become one ofthe key emerging strategiesin transitional change.

Rapid globalisation,advances in informationtechnology &communications, changingglobal & virtual work force,emerging employmentrelationships and workplace values and ethicsresulting in transformationare influencing the newcorporate culture. Vision,mission & strategy of theCEOs have to be quiteflexible and adaptable to thenew changes.

What can be the mistakesthat lead to the fall of a CEOwith some examples?

LS "Life is an exciting businessand most exciting when itslived for others" HelenKeller.

CEO when overlooks thecontext and the essence oforganisation's vision &purpose, over confidencecontributes to the downfall.Context is a criticalcomponent of successfulleadership. A brilliantleader needs to conquer egodifferent from self - belief.

Another notable mistakeeffects CEO success :"controlling" mind-set,micro management (I can'tlose my grip on thebusiness; I'm personallyaccountable and only I

should make the decisions). It's true that some personality traitsare difficult to shift, but people can change the way they see theworld and their values. When focus is lost, they stop listening.

Mistakes management is similar to change management if onlyhonestly leaders admit and open to discuss and embrace changesgladly.

Thirdly, focusing on the right kind of initiatives is equallyimportant. Too often, CEOs pour resources into favorite programsthat yield short-term gains but can't be scaled, aren't sustainable,and don't add value.

CEO's decisive understanding of customer needs is the key andbuild creative solutions that not only address them but have thepotential to generate the most impact. Customer is aboveeverything and those neglected suffered heavily.

Recent McKinsey research reveals that the companies that do bestfollow bold and disruptive strategies. They make big bets on newtechnologies and business models, champion a test-and-learnculture where every failure is an opportunity to improve, andlaunch change programs that transform their whole business.

One interesting example comes to mind : Bill Gates, The greatinstitution builder and philanthropist. There's no denying thatBill Gates is a visionary, founding Microsoft in 1975 andmonopolizing the tech industry for decades. However, one areawhere he fell short was in ignoring the search engine market.While Microsoft introduced MSN Search in 1998, the site purelyused an existing search engine, Inktomi, to gather results. Itseems all Gates' attention was focused on browsers, allowingGoogle to come along and become everyone's search engine ofchoice & rest is history.

If we can learn anything from Gates' mistake, it's that youshouldn't ignore your competitors or an upcoming area in yourfield, particularly in the technology sector. Technology is evolvingall the time, and it's in your best interests to keep up, adapt quickly,and stay one step ahead whenever possible.

Another example, Uber CEO and founder Travis Kalanick isanother example of failed CEOs, following an investigation intoharassment and other inappropriate behaviour at the ride-hailingcompany. The company's aggressive, win-at-all-costs culture mayhave contributed to its early successes, but it's become more of anAchilles heel as the company has grown and matured.

Funds flow management, Critical talent exit, slow responsiveness,not focussing on quality and process compliances are major errorsof CEOs impacts the business success. Consistency, transparency& regard for values is critical for CEOs when in crisis.

The mistakes made by these CEOs often stem from an error injudgment - from dismissing competitors to thinking they're abovesuspicion. While you will make mistakes as CEO, heed anywarnings, be sure to thoroughly research new product ideas, keepan eye on competitors, and never underestimate the general public- they have the power to make or break a brand! Take teams in toconfidence for sustenance.

With ever changing business landscape, how the CEOs shouldalign their competencies to the new normal?

LS CEOs are never more challenged than the current dynamic VUCAtimes and fast changing technological impact with AI, MachineLearning and robotic scientific interventions.

Facing relentless pressure for change, CEOs consider adaptabilitya must, but thereby risk overstretching their personal sense ofpurpose, and thus their authenticity. Nonetheless, CEOs can adaptauthentically, through better alignment of personal andorganizational purpose.

Leadership tasks in the dynamic business landscape : Strategicthinking needs to be agile and aligned with industry best practices



of the fast changing global political, economic, social andtechnological transition. Trust and empower HRfunction to playdiligent and significant business enabling partner role in engagingtalent. Emphasise purpose of strategy and importantly enhancecommunication flow both ways.

Setting the stage and frame the work culture : Set expectationsabout future, address uncertainty and emphasise interdependencethe need for motivation, innovation and excellence to earn clientdelight & sustain confidence of stake holders and commitmentfrom employees is essential.

Set up structures and processes : Create focus groups, platformsfor debate, enthuse and encourage to embrace excellence as a wayof life and ensure that enjoy what they do. Be on top of updatedinformation and efficient management of enormous dataemerging from key portfolios for decision making. Leaders wouldhave to develop and use unique capabilities to be successfulstrategic leaders in this challenging competitive landscape.Leaders would need to conceptualise and communicate aneffective vision for the organization. Build and continuouslydevelop dynamic core capabilities and also to develop andeffectively use highly capable human capital. Emphasizeinnovation, build effective organizational culture. CEOs will haveto manage their resources wisely and effectively, build human andsocial capital and clearly act in ethical ways. Effective strategicleaders have to operate under conditions of sometimes extremeuncertainty and view volatile environments as providing thepotential to identify and exploit entrepreneurial opportunities inthese contexts.

How has your view of leadership at the top changed, with thecurrent state of affairs - where business leaders have beenput under scanner for their deeds with reference to fewrecent cases?

LS I was fortunate to have associated with dynamic & Greatlyinspiring CEOs over three decades in the corporate. The changingcut-through completive business environment, active social mediascanning and anticipation for quick results, brand identificationand huge investments made, interventions form Institutionalinvestors, close scrutiny have been raising greater expectationsfrom Leaders. CEOs are more popular and visible than ever beforeand closely monitored to know how differently they arestrategizing their core competencies for faster growth.

Recent example - the sudden resignation of Infosys CEO, VishalSikka, soon after he completed 3 years at Infosys, comes as aculmination of an unending tussle between the company boardand founder-shareholders, over issues of governance.

Sikka has, since the beginning, spoken about a dual strategy - torenew the traditional business with automation, and develop newbusinesses around the new digital technologies such as cloud,AI/machine learning, analytics, big data, and internet-of-things.Yet lost investor confidence Sikka has maintained that Indian IT'solder businesses of application development & maintenance,infrastructure management and BPO are slowing and the marginsare falling and demands significant acquisitions. But some of thefounders are not in favour of acquisition-based business model,organisational cultural mis match. Great CEOs could getfrustrated or disappointed and disappear.

Prior to being appointed as the CEO and MD of Infosys, Sikka wasthe wonder whizkid at SAP AG. His exceptional track record andvision in the technology domain was considered ideal for someonewho is being hired for a role of CTO. But many Infosys Boardmembers considered him not CEO material for Infosys. He couldnot get backing for all his financial decisions or corporategovernance enquiries and has to leave the organization once heproudly said he belongs there.

The key highlights we alllearned from this episodeare : Be aware of thechanges around you, back &justify your decisions,experience & expertisematters in businessdecisions and adopt result-oriented approach withconfidence of internal &external stake holders andcustomers, scaling too soon,frequent changes, adhochiring of high fliers,ignoring inside talent andgoing alone does not yieldpositive results.

What are some of the areasof leadership that needimprovement, consideringthe role of CEOs are evolvingand expanding?

LS Essentially, authenticity isabout the leader's characterand personal strengths.Value is more about howleaders build character inothers and use theirstrengths to strengthenothers. Bosses need to createauthenticity in others morethan themselves. If the aimof the CEO is to build aninstitute, a legacy or a long-cherished dream goal theywould think beyondgrowing business just forshort term profits.

Business today is moredynamic and complex thanit has ever been. No matterour role or our experiencelevel, we are being driven tofind new solutions.CEOs/Senior leaders areexpected to manage throughthese challenges. Leadersrated as having both highspeed and high quality wereabsolutely clear about thevision and direction of theorganization and enableothers to succeed and buildengaging team that takescare of customers.

Leadership competencies ofCEO's needs improved focusin the evolving role foreffectiveness. Few maincategories of evolvingeffective leadershipcompetencies.

Personality. Most of the bigfive personality dimensionsare associated with effective



leadership, but the strongestpredictors are high levels ofextroversion (outgoing,talkative, sociable, andassertive) andconscientiousness (careful,dependable, and self-disciplined) and are moremotivated to pursue highergoals.

Self-concept. Successfulleaders have a positive self-evaluation, including highself-esteem, self-efficacy, andinternal locus of controlthese CEOs are confident intheir leadership skills andability to achieve objectives.

Drive. Drive inspiresinquisitiveness, an actionorientation, and boldness totake the organization orteam into uncharted waters.Drive represents the innermotivation that leaderspossess to pursue their goalsand encourage others tomove forward with theirs.

Integrity. Integrity involvestruthfulness andconsistency of words andactions, qualities that arerelated to honesty andethicality. Leaders have ahigh moral capacity to judgedilemmas on the basis ofsound values andactjudiciously.

Leadership motivation.CEOs are motivated to leadothers. They have a strongneed for socialized power,meaning that they wantpower as a means toaccomplish organizationalobjectives.

Knowledge of thebusiness. Leaders need topossess tacit and explicitknowledge of the businessenvironment in which theyoperate. Cognitive andpractical intelligence.Leaders have a superiorability to analyze a varietyof complex alternatives andopportunities. Furthermore,leaders have practicalintelligence; they are able touse their knowledge of thebusiness to solve real-worldproblems by adapting to,shaping, or selectingappropriate environments.

Emotional intelligence.Effective leaders have a highlevel of emotionalintelligence. They are able

to perceive and express emotion, assimilate emotion in thought,understand and reason with emotion, and regulate emotion inthemselves and others positively.

Have associated closely with CEOs with sheer determination andpassion-built organisations impact fully and inspiring : KishoreKhandavalli (Seven Tablets Inc.), Hiren Kulkarni ( Infinx), JuuhiAhuja (Wisemen), Sri Dasari (Brigade Solutions), SanjeevDeshpande (Itelleigence) & Ganesh Natarajan (Zensar) SandeepTandon (Serial entrepreneur Chairman TG) & Dr M GopalKrishna IAS Retd (Godavari Fertilisers).


LS Reflecting on my own experience in the area of leadershipdevelopment, research and experience have shown us that the bestway to develop proficiency in leadership is not just throughreading books and going to training courses, deploying successionplanning but even more through real time experience andcontinual practice. Sighting potential and enabling fast trackfuture ready enterprise manging options yield better results.

Organisation's culture and practices influences groomingmanagers into enterprise leadership roles. Many companies arenot developing enough leaders, they are also not equipping thosethey are creating with the critical capabilities and skills they needto succeed.

Today's market environment places a premium on speed,flexibility and the ability to lead in uncertain situations. At thesame time, the flattening of organizations has created anexplosion in demand for leadership skills at every level and samefor CEO and C Level executives.

Where should companies begin? A few starting points include :Engaging top executives to develop leadership strategy andactively govern leadership development.Aligning leadership strategies and development with evolvingbusiness goals.Focusing on three aspects of developing leaders - developingleaders at all levels, developing global leaders locally anddeveloping a succession mindset.Implementing an effective - and unique - leadership program.

What is one piece of advice you would like to offer to thefuture CEOs?

LS Honest Reflection : No matter where you are in your career, youcan find opportunities to practice by following simple skills. You'llhave varying degrees of success, which is normal. But byreflecting on your successes and failures at every step, and gettingfeedback from colleagues and mentors, you'll keep making positiveadjustments and find more opportunities to learn.

Aspiring leaders should focus on practicing these essential basics:Shape a vision that is exciting and challenging for your team(Department or division/unit/organization).Translate that vision into a clear strategy about what actions totake, and what not to do and specify timelines & budgetestimates and constraints as well.Hire, develop, and reward a team of great talent to carry out thestrategy.Focus on measurable results.Foster innovation and learning to sustain your team (ororganization) and grow new leaders.Lead yourself - know yourself, improve yourself, and managethe appropriate balance in your own life. BM




RR CEOs need to be inspirational and lead through personal example.They need to be highly disciplined and think for the larger good ofthe Organization.

They need to possess high degree of Empathy (EQ). They need to beable to connect with the people and show concern and care forthem. CEO's need to lead from heart. The CEOs need to bevisionary and well aware of the ever changing environment. Theyneed to be agile and have good decision making ability.

Hard work, integrity and passion are given attributes to have.Good CEOs involve the team members in decision making, listento them, and take their point of view before giving their ownviews. However, at current times CEOs need to act swiftly and takedecisions when required.

They also need to be held accountable for their action. We areliving in a fast changing time - historical data has almost becomeredundant. Executive instinct, executive intelligence and risktaking ability are key to everlasting impact for the success of anyCEO and the most important component for long-term leadershipeffectiveness.

While the basic qualities have not changed, however in currentcircumstances they need to be technologically aware, agile andalso be able to challenge the status quo because what is going wellcurrently may not work in the changed circumstances.

CEOs need to be innovative and think out of box and have a growth

mindset.

In today's time competencyis a given and what willmake a CEO standout is hispersonal attributes andattitude.

Besides the above CEOsshould foster a culture ofgiving back to the largercommunity and beingcorporate citizens.

What can be the mistakesthat can lead to the fall of aCEO with some examples?

RR One of the biggest de-railersis arrogance and ignore theadvice of the teammembers. Once you stoplistening, nobody will comeforward with suggestionthus making theorganization less effective ina complicated environment.Most of the time CEOs areunable to make the best use

CEO LEADERSHIPRichard Rekhy

Board Member - KPMG Dubai (Former Chief Executive Officer -KPMG in India), Bangalore

CEO not only legally but also has to be morally correct

Leaders in this bravenew world will needto lead differently -and think differently.It is important thatone puts him/her self -and the company - ina much strongerposition to lead andsucceed in the "newnormal" businessworld.

About the Author

With over 36 years’ plus experience in Consulting and Professional Services, Richard has worked in Arthur Andersen, Ernst & Young and KPMG where he has spearheaded thefirm in various capacities. He is admired for his clinical approach toward corporate governance and enterprise risk management.



of available resources.

Lack of self-awareness isanother big issue. MostCEOs are not aware ofactually who they are andhence coaching will be agreat help.

Succession planning oftengets missed out. This canlead to creating a void in theorganization when aseparation happens.

Complacency and not beingaware of the environment inwhich they operate. Suchbehavior makes theorganization vulnerable anddoes not allow it to changeappropriately with thetrends in the market.Examples are Nokia -Kodak.

CEOs job is 24/7 and whenone gets the job then oneneeds to work harder thanever before. Sometimeswhen people become CEO,they get into their comfortzone and don't pushthemselves. CEOs set theculture of the organizationand this can work bothpositively and negatively.

The other de-railer is whenCEOs get disconnected frompeople and they takedecision in isolation whichmay or may not be followedby the team.

CEOs operating from an 'I'position and not 'We'position is another blunder."I know it all" attitude canbe really fatal to anyorganization's growth.

Leaders whose goal is thequest for power over others,unlimited wealth, or thefame that comes withsuccess tend to grow atother's cost, and oftenbecome self-centered andegotistical. They start tobelieve their own press. As

leaders of institutions, they eventually believe the institutioncannot succeed without them. This is a big fallacy and leads to thedownfall of many organizations.


RR Leaders in this brave new world will need to lead differently - andthink differently. It is important that one puts him/her self - andthe company - in a much stronger position to lead and succeed inthe "new normal" business world.

The businesses today are going through major challenges withgeopolitics and global instability, technology disruption,regulatory changes, new business models etc. In this challenginglandscape, it is only natural that leaders have a different mind-setfrom those in charge. One must remember that the skills that helpyou climb to the top won't suffice once you get there.

Not to forget that even in this dynamic and changed landscape thefundamental skills like strong communication, empathy,collaboration, and trust building is very important. Anotherimportant area that they should have an ability to elicit publictrust as the face of the company.

Organizations are now responsible to many more stakeholder thanjust stakeholders. CEOs need to be aligned to their expectationsand answerable to them.

CEO has to be comfortable in the digital realm and embrace newtechnologies; they are willing to take the organization in newdirection.


RR Ethical issues have received growing attention recently, aftercorporate scandals and during the current economic crisis.

Morality in leadership matters a lot. The moment you accept aleadership positions you have to be prepared to be in public gaze.Today with social media, this is further compounded. It isimportant that the CEOs conduct themselves in an honest andethical manner, including how they handle apparent conflicts ofinterest between personal and professional relationships. Todaybeing legally correct is not enough. One needs to be morally right.

Moral leadership is not about delivering the best result but it isabout looking at yourself in mirror and being able to tell yourselfthat you have done the right thing.

With the evolution of economies and upcoming business models -there are major regulatory changes across the globe to protect theinterest of the investors and businesses. It is must that onecomplies with all applicable governmental laws, rules andregulations and applicable local rules. Protect and respect theconfidentiality of information acquired in the course of the workexcept when authorized or otherwise legally obligated to discloseit. Confidential information acquired in the course of work shouldnot be used for personal advantage.

What are some of the areas of leadership that needimprovement, considering the role of CEOs are evolving andexpanding?

RR There are no born leaders. Most of the skills that is required to

Leaders in this brave new worldwill need to lead differently -and think differently. It isimportant that one puts him/herself - and the company - in amuch stronger position to leadand succeed in the "newnormal" business world.



become a CEO can be acquired and people can be trained. However,there are some attributes of CEOs such as empathy, integrity,trust, vision, inspirational, ethics - either you have it or you don'thave it. I remember once somebody asked me how do I build trustand my answer was - through your actions and consistency ofbehavior.

The areas which need to me worked upon through coaching orother interventions are given below :

CEOs need to be more agile, collaborative and should understandthe new technology available. It is not just about understandingthe new technology but also they need to see how to use themappropriately which will help the organizations differentiatethemselves in the market.

CEOs need to know how to deal with the millennials and theyounger generations. For this they need to be open minded andwilling to take feedback and make necessary changes in theorganization. The new generation is very outspoken, casual andseek accountability.

The speed at which technological innovation is transforming ourdaily lives is exceeded only by the impact it is having onbusinesses. The responsibility for overseeing this change falls onthe CEOs. Their response to this change and decisions willultimately decide the fate of the businesses they lead.


RR In my view - we live in an era where change is the only constant.Capable leadership is the only way to guide organizationsthrough such times. To successfully prepare for an uncertain anddynamic future it is important to develop leadership within theorganization. What most CEOs forget to do is to develop aleadership culture. Therefore an entrepreneurial spirit within the organization needs to be encouraged and should build a culture where leaders emerge from within. It is importantto have empowered leaders at different levels in the firm. Thiswill help build leaders pipeline and will ensure a continuous

supply of leaders withinthe firm.

To identify and developpeople for the future theyneed to assess currentcapabilities againstleadership requirements ofthe future. Also need toensure that these identifiedindividuals must have thegrowth promise and willtake the best advantage ofand respond positively tothe developmentopportunities. Coaching andmentoring of thesepotential future leaders willplay a key role - this elementis sadly missing in manycases.

What is one piece of adviceyou would like to offer to thefuture CEOs?

RR It takes confidence, passion,and drive to reach a level ofsuccess and then do what'snecessary to sustain it.

The CEOs need to be restlessand always look to challengethe status quo. They shouldput firm before self. Thebrand is identified by theenergy and passion whichthe leader emanates. BM



What are the qualities and traitsthat make a CEO with everlastingimpact? Have they changed in thepresent business environment fromthe past?

DK Let me list down the fundamentalqualities and traits first as under :-

Visionary leadership.Authentic leadership.Purpose with strategic actionplans to drive excellence.Communication articulation -Transparent and open.People - Building organizationwith right people with right job.Performance culture and reward& recognition.Driving execution excellence.

However, with the ever changingenvironment and business dynamicswill keep putting more and morepressure on CEO to accelerate theprocess of change to become moreeffective to drive the performanceindexes, therefore, I would like to addfollowing additional important list ofqualities and traits of CEO :-

Agility - Fast, accurate and Hi-speed.Best in talent-Ability - Focus oncrafting talent.

Cope-ability - Ready to cope with any kind of high pressure.Diversity - Respectability for all caste, creed, gender, culture, color andnationality.Energy - High on spreading positive energy to drive organizationalexcellence.Flexibility - Simply flexible in any difficult situation.Go-getter ability - Role modeling - Ready to act when others are waiting totake steps.High on technology, using it for strengthening performance at all levels.Important to know what not to do - someone who knows what not to do hasalready won as it creates focus.

What can be the mistakes that lead to the fall of a CEO with some examples?

DK The list can be exhaustive, however, some key mistakes which lead to fall of aCEO are :-

Not having the right talent - This is the most important factor leading toa fall.Lack of customer focus - Driving vision and execution that is notdelivering on customer value creation.Ignoring competition - Thinking and demonstrating we are the best whileas competition is spoiling the carpet underneath.Integrity and Compliance - Only fair business is real business model.Many companies have even developed stringent guidelines andpunishments around it.Not able to define the Why/The purpose - The companies with purposeof existence sustain and enhance business spectrum.Not setting right execution model - Most CEOs are able to setstrategy/goals but fail at putting an execution model with challenging KPIs.Financial compatibility - Many CEOs leave this task to their CFOs but inessence one needs to be well in control with what is happening in the

CEO LEADERSHIPD.K. Bakshi, Chief Mentor & CEO, Global Talent Company Limited,Thailand

CEO has to understand wholebusiness and not one domain

With the everchangingenvironment andbusiness dynamicswill keep puttingmore and morepressure on CEO toaccelerate the processof change to becomemore effective todrive the performanceindexes.

About the Author

Bakshi’s training activities including signature programs like Roadmap to success, DNA of leadership and one dream one team are spread in various countries in Asia Pacificand North America. He is thought provoking speaker on various international conferences.



business with numbers as it is critical for company's value creation andsustainability.Lack of alignment of individual and team performance Indexes with thecompany business objectives.

With ever changing business landscape, how the CEOs should aligntheir competencies to the new normal?

DK Following important steps for alignment would get the business house inorder for accelerating performance and driving organizational growth asContinuous Process :-

Raising the bar of leadership at various levels.Role and goal clarity with specific accountability and responsibility atvarious levels.Focus on absolute new idea generation and building continuous room forinnovation and creativity.Customer centricity to the core of business process.Acceptance/Realization : Changes and quickly adapt to new normal.Learning/Training : Who says CEO does not need to be trained on newenvironments or even retrained on the old competencies. Turn thedesignation of CEO to CLO (Chief Learning Officer), let the learning startfrom him.Understanding first self and then coaching the rest of the top team ofleaders.Become more technology friendly : The wealth of information,perspectives, and use cases available on internet is amazing - these canalready trigger some great thoughts and deliberations.Be prepare/trained or look for help - to take tough/uncomfortabledecisions - changes can be rocky, and in order to keep sustainable businessmodel one might need to make lot of internal changes.Be compassionate and calm : it's tough, thought to be at first be confusedthemselves, taking tough decisions and at the same time have aresponsibility of the company which is looking to you for answers - the bestadvice is to be calm minded and compassionate with people. Don't letanything cloud your judgment.

How has your view of leadership at the top changed with the currentstate of affairs - where business leaders have been put under scannerfor their deeds with reference to few recent cases?

DK My views on leadership have not changed as integrity and authenticity is akey to being a top Leader. Yes, some of the news we hear about on how sometop leaders use their position inappropriately, or examples where somebusiness leaders do not maintain financial discipline for short term gains.There are sometimes some examples of taking decisions in haste and lead tobad decisions. It is important to separate genuine mistakes from willfulmisadventures. The whole media stories does not help, but we need to begiving a voice or chance to correct mistakes and move things forward. At thesame time, where we see misadventures - these need to be taken care as per thelaw of land. One thing is clear from all this - good business practices are longterm and real leadership is about clean business. HR needs to play a key rolein ensuring that the right information and trainings are availablecompanywide so that these are constantly reinforced.

Many companies have set up great code of conducts and stringent process ofexecution.

What are some of the areas of leadership that need improvement,considering the role of CEOs are evolving and expanding?

DK I would say earlier CEOs were strategic, good communicators and would haveone or other strong skill say for example, sales or operations or finance etc.In the new world we are in, I cannot imagine a CEO who is not well versedwith all the functions that run a company. Of course, they strong support fromtheir teams, but broader focus area is what I meant.

An easy but focused way to start is by choosing one or two topic areas in eachfunctional domain. And if CEO has space for more than good luck and addtopics of interest area or whatever creates more impact for the company.

Typically CEO would focus on stakeholders, customers and their own people.

I cannot imagine which CEOs will bereally great if they cannotunderstand the emotional science andemerging trends both internally andexternally. One needs to be able to geta strong grip on that.

Lastly I reinforce that a big changethat has taken place is on how you doit and that is where I see the role oftechnology becoming game changerand leaders using it much moreappropriately and effectively.

Any road map in your mind todevelop talents and skills thatgrooms CEOs of the future?

DK I suggest following Roadmap :Re-develop broad based skill setsrather than just one specific deepscience.Optimize and orient technology askey driver for grooming.Align emotional science.Develop project management skills- give CEO ability to work withmultiple stakeholders, workagainst unbelievable targets andevaluate risks.Mentor key business leaders whoare Hi-Potential.Always open to learn what not todo, be focused.Passion and Love for products andservices - deeper understanding ofwhat your company stands for andthe value it brings.

What is one piece of advice youwould like to offer to the futureCEOs?

DK I would say couple of importantadvices and not one.

First one is - Ignite your passion andthe rest will surely follow.

Second one is - Map the steps of yourtop leaders that would give you someunheard brilliant ideas on the pathyou need to follow. Do not under-estimate the powerful wisdom of yourkey leaders. They could turn be morecreative, innovative in theirapproaches and trust their guts andleverage on combined knowledge andtalent of these leaders.

Last one - critical and mostimportant - Do not shy of taking risks,of course, evaluate them thoroughlywith the top leaders whose powerfulpersuasion should drive and energizethe path of risk taking ability as thecore strength of top team.

I am sure rather confident that thesewould lead CEO of the companytowards surging to next level ofperformance and excellence. BM



What are the qualities andtraits that make a CEO witheverlasting impact? Havethey changed in the presentbusiness environment fromthe past?

BR CEO's can make an impact ifthey have a clear purposethemselves, and it isconnected to the businessthey are in. The primaryrole of the CEO is aroundmaking choices anddecisions and then beingable to take people along ajourney. Management ofchange, managing crises,leading growth or adownturn--in each of thesesituations, there are keydecisions to me made.

Stakeholders will ultimatelyjudge the CEO on anongoing basis and inposterity on parametersfrom their own perspective.Great CEOs are able tounderstand, balancedifferent stakeholder needsand move forward withconviction, by making some

decisions on the way, not all of them being popular.

In addition to these, in my experience, there are four factors whichstakeholders assess CEOs or other senior leaders on :

Judgment - in a given and changing context,Balance - managing multiple and often contradictory pushesand pulls, and pressuresResilience - coming back strongly from failure, andexperimenting, andTrust - being trusted by others and trusting others.


BR The simplest one here is that when CEOs lose the trust of theBoard or the owner. This is more an issue of mis alignment or non- performance than anything else. Sometimes owner or boardexpectations are unrealistic as well, in such cases. Rahul Yadav ofHousing.com may fall in this category, as would many of the HPCEOs like Mark Hurd who were fired eventually.

The other aspect is where the CEO tends to become all powerful, orat-least believe that s/he is all powerful and nothing can touchthem. They then tend to indulge in behaviors which they would nototherwise have, and considered caution goes to the wind. This iswhen listening goes down, there is a mild touch of megalomania,and serious errors start occurring. What is covered in generalunder lapse of judgment is often reckless decisions, or choicesmade for personal gain of power or wealth. Sometimes these arealso related to other inappropriate behaviors under the company'scode of conduct or general statutory guidelines.

The recent Ghosn-Nissan case, the Enron Case and cases likePhaneesh Murthy of Infosys fall in this category. Some become

CEO LEADERSHIPBimal Rath, Founder,Think Talent Services, Gurgaon

CEO must revisit basics ofmanaging people

One of the key thingsin my experience withmany CEOs who aresuccessfulconsistently and longterm is that theyspend a lot of timeoutside theircompanies, learningfrom whoever andwhenever they canand buildingnetworks outsidetheir comfort zones.

About the Author

With over 23 years of corporate experience across different industries and across geographies, Bimal is actively engaged in providing senior leadership coaching, people strategyand organisational transformation.


public, but there may be many other such cases which do not come tolight.

Most mistakes are linked to lapse of judgment; but the other factor thatplays a role is over trusting behavior. Often, CEOs may end up relyingon people internally or advisers who often tend to take them down thewrong path for their own interests or reasons. These kinds ofrelationships create a negative nexus, impacting governance, unwantedbehaviors and non-compliance to laws, each feeding on the other.

While CEOs are smart and certainly capable, they are also sometimesgullible, often trusting people around them, especially close to them, abit too much. While the jury is still out the recent ICICI case, it wouldfall in this category. For those familiar, the husband and wife duo caseof Marvell Technologies a few years back may also fall in this category.


BR There is no simple answer to this one. CEOs need to be open to feedbackall the time, curious and willing to learn new skills. One of the mostcritical aspects is around adapting. Successful CEOs understand that :

Any past success is not only of their creation, there are other people,circumstances and certainly luck and timing that played a role inthat success.Context is important and if the context is changing quickly, they willhave to adapt to be successful, old ways will not work.Individually, they cannot have all the skills and competenciesanytime, so building a strong team is critical.Depending on industry, expectations from them may changesignificantly in terms of the speed and focus required in learninge.g., in the tech industry, if the CEO is not seen on the forefront oflearning new aspects of technology, partnerships and buildingecosystems.

One of the key things in my experience with many CEOs who aresuccessful consistently and long term is that they spend a lot of timeout side their companies, learning from whoever and whenever theycan and building networks outside their comfort zones.

How has your view of leadership at the top changed, with thecurrent state of affairs - where business leaders have been putunder scanner for their deeds with reference to few recent cases?

BR Certainly trust has gone down. This is a general global phenomenon aswell. We do not trust our leaders and the overall index is on a downslide.The more cases of inappropriate behaviors, acting for personal gainetc. are reported and known but unreported, the more the rust goesdown.

One then tends to almost be a little suspicious of almost all CEOs orother people in power. There is a feeling that many people in powerincluding CEOs are only in it for themselves with scant respect for thelarger good-while they may like to position things that way.

Many leaders are smart communicators and can often come across asvery convincing, but there are enough and more examples ofcompanies, regulators and other stakeholders having being taken for aride by glib CEOs.

What are some of the areas of leadership that need improvement,considering the role of CEOs are evolving and expanding?

BR There are four broad aspects as mentioned earlier - Improvingjudgment, Creating personal balance, Strengthening resilience andEnabling trust.

In addition, there are three specific aspects worth mentioning.

CEOs must revisit the basics of managing people. This means all sortsof stakeholders-internal and external, including customers orconsumers. Good CEOs realize that while there are many other aspectsof management, nothing can substitute the credibility and stature ofCEO who is seen as genuine and human, believing in nurturingrelationships.

The core aspect is also around beingcomfortable with personalvulnerability and being open aboutwhat he or she does not know. Thisdoes not come easily to CEOs asthey are often expected to have allthe answers and almost infallible. Inthe modern world teams, especiallyleadership teams must all helpCEOs by treating them as humanbeings and not as some demi-gods,for ends of their own.

CEOs must also learn to build teamsaround themselves withcomplementary skills andcapabilities, this is essential in themodern world. It is almostimpossible for any one individuallykeeps up with the demands of theever changing world and learnseverything that is relevant.

Any road map in your mind todevelop talents and skills thatgrooms CEOs of the future?

BR Each leader, in this case the CEO,has to chart their own journey. Thereis no standard roadmap. However, afew of the following may help :

Creating a strong personaldevelopment plan which getsformally reviewed at the end ofevery six months with help ofkey stakeholders.Having a formal 360 once a yearwith a broad set of people andactually sharing and workingthrough the feedback.Creating and periodicallyrenewing an external networkthat can support learning andidea generation.Spending at least a week informal learning of new skillsevery year.Being a mentee in reversementoring, especially on aspectsof technology and how theyounger people in the world arethinking - they are theconsumers of the future.

What is one piece of advice youwould like to offer to the futureCEOs?

BR There are actually three interlinkedpieces of advise :

Learn to look in the mirror asoften as you can, and be humbleabout what you see.Balance your life beyond work,your identity is not all about thejob.It's ok to fail, you are notsuperman. Being vulnerable isfine.


BM



The Beginning'As a startup CEO, I slept like a

baby. I woke up every two hoursand cried.' Ben Horowitz, Co-Founder, Opsware.

From the time immemorial,the tribal head, the satrap, theking and now the contemporarycorporate leader aka CEO in thepresent context have corneredeyeballs and attention of all, thewise and the common folk, alike.No wonder, Google generates6,36,000,0000 links in 0.53 secondsif one is searching for'leadership'. From Sun Tzu's Artof War to Simon Sinek's Startwith Why, the spread on theleadership table is wide, uniqueand enticing. Yet, one comes backto this buffet time and again :unsatiated, uncertain andsometimes anything butunruffled. In times whenuncertainty reigns, one looks fora dependable fare, only to be lefthigh and dry. Alas, such anenquiry often leaves manyunsatiated, rather than contentedand diehard fan.

So, who is a leader? How doesone become a leader? How one

survives and excels as a leader in these utterly chaotic times? These areoverarching questions. We explore them in following three sectionswith clear understanding that we may be inadequate in generating aconsensus. In our effort we are comforted by dictum of Martin LutherKing, Jr. 'A genuine leader is not a searcher for consensus, but a molderof consensus.'

Part I : Knowing Timeless CEO To start with, we are tempted to ask if there are factors or causal

variables, which may define leadership effectiveness across time andspace. In other words, can we vouchsafe that availability of a certain setof traits or a preferred behavior matrix or certain circumstances-situations can assure leadership effectiveness? One wishes if thesequestions had simple, straight and satisfactory answers. Yet, there are afew touchstones which deserve a look.

Our submission is that each era demands and encourages a certaintypology of the leadership DNA around a preferred set of leadershipbehavior. Kouzes & Posner looked at leadership effectiveness from adifferent lens : behavior and practice (rather than qualities and traits).Their 30 yearlong research starting in 1983 spread across the globecovering 75000 leaders identified five common concepts and hence 5Practices as follows :

1. Encourage the heart : Leaders demonstrates sincerity andtransparency and look for opportunities to celebrate small and bigsuccess of their followers;

2. Model the way : Leaders behave in (a role model) way thatencourages their followers to behave, with their own voice andvalues;

3. Inspire a shared vision : Leaders focus on developing a vision anda series of goals that everyone in the team cares about and works

CEO LEADERSHIPDr.Virendra P Singh, Advisor & Distinguished Professor, Gurugram

Knowing CEO : Becoming CEO :Continuing CEO

CEO has to be aconfirmed relentlesslearner every momentof his twenty fourhours. Learnabilityquotient has becomemore crucialdesiderata today thanany other competencyfor a leader whicheverspace and time he is.This is so becausecurse of volatility,uncertainty,complexity andambiguity makes thewhole gamut of hisknowledge and skillsredundant.

About the Author

Dr. Virendra P Singh has been Advisor & Distinguished Professor with two private universities (2017-19) & Jaipuria Institute of Management, Lucknow, Indore and Jaipur(2018-19). Earlier, Dr. Singh has been an OD Advisor with Patanjali, Haridwar.



towards collectively, with clear understanding;

4. Challenges the process : Leaders question status quo andencourage their followers for moving "outside the boundaries" to becreative and innovative; and

5. Enable others to act : Leaders create trusting work placeencouraging their followers to collaborate, experiment and engage.

These behavior codes emanate from thousands of real life casestudies; and therefore acquire the form of a normative model simplybecause these behavior explain what leaders really do rather than whatthey should do. Unlike other leadership models, Kouzes & Posner's 5leadership practices have been outcome of a comparatively lot moreempirical, factual and research based investigative exercise than it'scontenders till date.

Collins 5 Leadership levels

Jim Collins with his research team took this forward to describe 5levels of leadership in their magnum opus 'Good to Great' as follows :

Level 1 Highly capable individual : Makes productivecontributions through talent, knowledge, skills and good workhabits;

Level 2 Contributing team member : Contributes individualcapabilities to the achievement of group objectives and workseffectively with others in the group setting;

Level 3 Competent manager : Organizes people and resourcestowards the effective and efficient pursuit of predeterminedobjectives;

Level 4 Effective leader : Catalyzes commitment to and vigorouspursuit of a clear and compelling vision, stimulating higherperformance standards;

Level 5 Executive : Builds enduring greatness through aparadoxical blend of humility and personal will.

Both Collins and Kouzes & Posner provide a fairly robust frameworkto know leadership and practice it with mindfulness in one's setting.Yet, one comes across, not infrequently, cases of leadership traps,blunders and failures at the highest levels. This takes us to the next part: Becoming a leader.

Part II : Becoming aLeader : Avoiding CEO -Leadership mistakes

Many CEOs fail because theydon't seek to understand what canlimit, de-accelerate their growthand effectiveness as leaders. Theyoften times get enticed,sometimes led by their badfollowers, that they areindefatigable, invincible andinfallible.

Barbara Kellerman identifiestwo fundamental categories ofbad leadership : ineffective andunethical. She also highlights inher seminal study BadLeadership (HBS Press 2004)seven types of bad leadership :

1. Incompetent : Lack ofcontinuous learning, drive,energy, focus, flexibility,emotional maturity, businessexpertise lead toincompetence. Kellermancites the example of JuanAntonio Samaranch ofInternational OlympicAssociation as one classicexample of such failure. Nearhome, we had a highlyaccomplished academic whooccupied the chair of CEOIndia Inc. for a decade failed todemonstrate attributes citedabove.

2. Rigid : Though competent, ifa leader fails to adapt to newideas, new information orchanging times, he falls underthis classification. NorthKorean leadership till recentlyprovided a classic example ofthis rigid leadership style.Vladimir Putin was also onesuch leader for quite sometime. Near home, we havemany cases, especially inpublic service space, whereleaders have peddled outdatedagenda to the nation.

3. Intemperate : Intemperateleaders more often than notfail to control themselves, andin this journey, they are aidedand abetted by followers whoare unwilling or unable tointervene. Though cases ofRajat Gupta and Chanda

Many CEOs fail because they don't seek to understand what can limit, de-acceleratetheir growth and effectiveness as leaders. They often times get enticed, sometimes ledby their bad followers, that they are indefatigable, invincible and infallible.



Kocher are still open to(ethical, not necessarily legal)jury, both demonstrate theirmoral fragility. Interestingly,Rajat Gupta has come out witha memoir 'Mind without Fear'(Juggernaut, 2019) chartinghis incredible life journeyculminating into the fall fromgrace. In 2011, Gupta wasarrested and charged withinsider trading. In this book,Gupta recalls his unlikely risefrom orphan to immigrant tointernational icon as well ashis dramatic fall from grace.And for the first time, he tellshis side of the story of thescandal that destroyed hiscareer and reputation. Guptawould like us to believe, atleast book publicists wouldsurely, that this memoir is'much more than a courtroomdrama; it is an extraordinarytale of human resilience andpersonal growth'. Sounds andreads a bit intemperate!

4. Callous : When leadersbecome uncaring or unkind totheir stakeholders, theyembrace a callous attitude.They ignore or discount needs,wants and wishes of the mostmembers of the group ororganization, especially theirsubordinates. I had misfortuneto watch an iconic (de facto)CEO destroying his homegrown brand (which sentshivers to many transnationalboardrooms for three yearscontinuously) just because hebelieved in himself and no oneelse, including his co-founder.

5. Corrupt : Putting self-interestahead of the public interest isthe hallmark of a corruptleader. Kellerman contendsthat at times followers (andprobably powerful and potentfollowers) also lie, cheat andsteal. Warren Hastings, VijayMallya, Nirav Modi would beprominent names framed inthis rogues gallery.Unfortunately, this tribe is notslowing down and many youngleaders are not taking lessonsfrom their misdeeds & itsaftermath.

Recently, Steve Jobs onceagain figured in the debateabout his CEO ship. Someclaim that jobs was a greatChief Products Officer, but nota celebrated CEO. Apple underjobs 'dodged taxes, made novisible charitable donations

and exploited and poisoned workers in Asian countries. For a bigpart of his career, Jobs was arguably a terrible CEO'. (LeanderKahney 2018). Tim Cook, Jobs successor in 2011, has grown in largerin stature than his celebrity boss because he said and practiced adifferent line. I don't think business should only deal in commercialthings…If people should have values, then by extension a companyshould have values.'

6. Insular : These leaders establish boundaries between themselves(and a few charmed followers, family, colleagues) and everyone elseon the other. They minimize or disregard the health and welfare ofthe other. Kellerman clubs Bill Clinton in to this category of leaders,and not because of Monica Lewinsky scandal, but his otherdalliances in Rwanda.

7. Evil : Leaders can be evil. Using pain as an instrument of power,committing physical as well as psychological atrocities, these leadersseek to maintain their hegemony. Saddam Hussain and Pol Pot aresome old classic evil characters everyone knows.

We cite these cases because leaders must also know what not to do.Prioritizing is surely vital. But selecting what not to do is no lesscritical. CEOs must save themselves from these seven leadership sins. Ifthey can succeed in this pursuit, becoming CEO becomes easier. MortenT Hansen in his brilliant work 'Great at Work' (Simon & Schuster, 2018)recommends compliance of the largely unknown principle Occam'sRazor : As few as you can, as many as you must.

Each of these seven bad leadership types has its roots in its uniquebedrock of circumstances and behavior. Each one brings forth uniquecausal factors. As long as one is aware and mindful of these traps, onelives for another day. This takes us to the third segment of our enquiry: Continuing CEO.

Part III : Continuing as a relevant CEOSo, how does a CEO remains relevant? To start with, she shall have to

prove her credentials as a life-long learner. This is the foremostrequirement of contemporary VUCA times. To reiterate, she has to be aconfirmed relentless learner every moment of her twenty four hours.Learnability quotient has become more crucial desiderata today thanany other competency for a leader whichever space and time she is. Thisis so because curse of volatility, uncertainty, complexity and ambiguitymakes the whole gamut of her knowledge and skills redundant. At thecost of oversimplification, one could argue for and recommend achildlike innocence and buttressed by the curiosity to fathom deepwater of business landscape.

It is interesting to note that no sports academy trains you to lead afootball or cricket team. No military school trains greenhorn soldiers tobecome an army general. In the same vein, corporate leaders need not betrained to be a CEO. Some of them shall become CEO just like somesoldiers become army commanders. Being a good soldier, being a goodbattlefield professional, being a good center forward of a football teamare more important qualifications. You pick up captainship attributesby observation, watching good and bad sports leaders, by touching andigniting your inner soul.

Every social unit, a corporation, family, neighborhood, state and thelarger society, once in a while produces some good leaders, and somerank bad ones. Whether you are aspiring for the corner office orcontinue your journey as a Level 5 Executive, just look around for somegreat CEOs. Adjust your learning antenna. They are around.

'If you make listening and observation your occupation, you willgain much more than you can by talk.' Robert Baden-Powell.

References1. Sun Tzu, The Art of War, Tuttle Publishing, 19962. Simon Sinek, Start with Why, Penguin Random House, 20113. Kouzes & Posner, Leadership Challenge, Jossey Bass, 3rd Edition, 20024. Jim Collins, Good to Great,5. Barbara Kellerman, Bad Leadership, HBR Press 20046. Rajat Gupta, Mind Without Fear, Juggernaut, 20197. Morten T Hansen, Great at Work, Simon & Schuster, 20188. Leander Kahney, Tim Cook, Penguin 2019

BM



Recently I was invited to address a group of managers onbuilding a great workplace culture. Led by their CEO theypaid rapt attention to what I had to say. "You all know whoyour CEO is. Do you know that you have a Deputy CEO too?"I asked. They were surprised. It was the first time they were

hearing about this Deputy CEO. "Unlike your CEO who can only bepresent in one place the deputy CEO has no such limitations. Thedeputy CEO takes over whenever the CEO is not present in the room"."Who is this deputy CEO," asked one manager. "His name is Culture," Ireplied.

"Culture takes over when the CEO leaves the room," is one of myfavourite quotes from an HBR blog by Frances Frei and Anne Morriss.

Most of us know that Larry Page is the CEO of Google. Who is theCEO of Apple after Steve Jobs? Some of us will recall it is Timothy D.Cook. Google and Apple are two of the most successful corporations ofthis century. The first features in our list of best workplaces, the seconddoes not. Let me test your knowledge of CEOs further. Who is the globalCEO of Johnson and Johnson and American Express? Chances are youwill strain to remember. Why? Is it because they are less successful? Onthe contrary both feature prominently in Jim Collins' "Built to Last" - aninternational best seller that features only companies that havesuccessfully delivered consistent business results over long periods oftime (more than 60 years). What is the difference between anorganization which is built to be successful for a very long time, asopposed to some who are very successful for some time?

Culture becomes the CEO in these organizations! Johnson andJohnson have institutionalised their culture in the form of their Credoand AmEx calls their values the Blue Box values. They are led by ableCEOs who do not have to build the culture on their personal brand.

What characterises some ofthese leaders who may not bemedia darlings but who have atrack record of creating greatworkplaces which are alsooutstanding sustainablebusinesses? We have studiedthousands of workplaces andsome of the characteristics thatstand out are :

1. An employee is asimportant as a customer -When Google founders satdown to write down their corevalues the first value thatcame to them is "We want towork with great people".Everything else is a derivativeof that. Even an "average"employee is important forthese leaders, just as an"average" customer is. "I feellike an equal," is what theiremployees say, regardless oftheir position in theorganization.

2. Willingness to share wealth- All employees in Google andIntel are entitled for stockoptions, as are employees of

CEO LEADERSHIPPrasenjit Bhattacharya, CEO, Great Place to Work® Institute India, Mumbai

& Director at Great Place to Work® Institute, Sri Lanka

What do leaders at greatworkplaces do?

Leaders at greatworkplaces taketough businessdecisions whileconstantlydemonstrating theirrespect for theirpeople. It is not thatGoogle and Intel hasnot let go of peopleduring downturns. Itis how they do it thatmakes the difference.

About the Author

Prasenjit is a man with the mission to help enterprises in India create high trust cultures that deliver sustained business results. He has written many research papers and over100 articles on all aspects of creating high trust cultures that deliver sustained business results and is a sought-after speaker.



Mindtree and HDFC. In arecent Best WorkplacesConference Kishore Musule,founder of Classic Stripesconsidered his willingness toshare wealth as one of the keyreasons for the unique cultureof this global leader inautomotive graphics.

3. Mind set of humility andgratitude - Jim Collinsdefines these "Level 5" leadersas those who will createsuperb results but shun publicadulation, and are neverboastful. They are describedas modest. An example of sucha leader who epitomizedhumility is David Packard, theco-founder of Hewlett-Packard, who, in Jim Collins'words, defined himself as a HPman first and a CEO second.

4. Self-awareness and a rocklike commitment to walkthe talk - What stands outabout the leaders in greatworkplaces is their ability toseek out all reasonablequestions and give a straightanswer. HCL Technologiesbased in India has more than80,000 employees. The annual360 degree for their CEOVineet Nayar (Vineet recentlymoved to a new role within theGroup heading a socialFoundation) and his managersis done by all employees.Thousands of employees optto give Vineet feedback. Nayarputs his report on the intranet.In fact, you will probably gethis 360 reports if you searchonline!

5. Demonstrated caring -Leaders at great workplacestake tough business decisionswhile constantlydemonstrating their respectfor their people. It is not thatGoogle and Intel has not let goof people during downturns. Itis how they do it that makesthe difference.

6. Involving people - 99x is acompany in Sri Lanka whoseannual objectives are run byInitiatives owners (anyone canvolunteer) where they havetotal freedom to decide howthey need to run the initiativeand report directly to the CEO.The company has no teamleaders and is completelymanaged by self-managedteams. IFS in Sri Lanka have

not found the need to have a HR function; their managers arepassionate about their people.

7. Willingness to have fun - Last but not the least these leaders do nottake everything seriously all the time, least of all themselves. As JeffBezos the founder of Amazon.com (and now the owner ofWashington Post) says, "Work hard, have fun and make history".Achieving two out of three is not an option!

To sum up, leaders at best workplaces treat every interaction as anopportunity to build trust - internally with employees and externallywith other stakeholders.

While I have had the opportunity to interact with some amazingleaders who have created inspiring workplaces, unfortunately, for everygreat leader there are some who have pretensions of greatness. Whatare some of their characteristics?

1. Obsession to rank in some list - These are leaders whose self-image is built by report cards given by others. They have never comesecond in class. A great place to work for them is being ranked insome list. They will vigorously contest any drop in "rankings" andwill try to use the perceived power of their office to make theirdispleasure known. When that does not work, they will be churlishand criticize the methodology, and the credibility of the organizationdoing the rankings. By contrast, leaders at the best workplaces lookat external recognitions as incidental to their primary goal ofcreating an outstanding organization.

2. Never humble - These are typically managers working for largebrands who have well-oiled public relations machinery to build theircorporate brand. There are organizations vying to give them"awards". When you meet them you always feel like a "vendor" or a"supplier", not like a partner. There is a well-known company whichin the past used to have a main entrance in their building and a smallside entrance for their "suppliers".

3. Not interested in understanding their employee feedback -These leaders do not ask to see what their employee perception is.Indeed, it is possible that their in-house employee surveys give themhigh ratings. Employees know what to do to survive in suchenvironments! However, an independent third-party survey thatguarantees anonymity and confidentiality often shows differentresults. What do you do in such cases? These leaders trash theexternal survey report. They shoot the messenger rather than studythe message.

4. I know it all - These are leaders who are sought after speakers andare often associated with well-known industry and functional bodies.They win a lot of individual awards. They have a large fan followingand their names are well known. They know everything aboutcreating a great place to work, except actually creating one! They willnever risk a third party going and asking their employees about howthey perceive their workplace. It is a curious case of the emperorwearing no clothes, except it is visible only to internal employees,and not to the outside world.

Senior executives in such organizations often act like gate keeperspreventing any new idea that threatens their power base. They agreethat creating a great place to work is a part of the CEO's agenda, but"please approach through proper channels", meaning themselves!

In contrast, leaders at great workplaces are forever curious to knowwhat they can do better. They know that trust is always a loan given bytheir people which can be taken back at any time. They treat everyinteraction as an opportunity to build trust.

Being humble, willing to learn, fail, never give up and never fully succeed.... these are not things they always teach you in businessschool.

(Views are personal)

BM



What are the qualities and traits that make a CEO with everlastingimpact? Have they changed in the present business environment fromthe past?

SV In the current scenario of volatility, ambiguity and disruption, extendedpressures from all stakeholders, and a general cyniscism on leadership, theCEOs role in under a lot of focus and hence is a very challenging one.Regardless of the changing environment in terms of technology,demographics, society, geopoloitical shifts and cultural norms, certain traitsand attributes remain critically important for a CEO to succeed. For exampleIntegrity will never diminish in its importance, nor will character, courage,capacity to execute or customer zeal. In addition to these enduringcharacteristics there will be new demands on those who will lead the nextgeneration companies and work force in the face of rapid change andincreasing digitalisation. A new mindset is required so as to have a fresh wayto look at the businesses, customers and environment and explore best ways todeliver differentiated value to customers by dealing effectively withdisruption. Taking a cue from the research Ready and Mullaly completed onthe new perspectives on leadership, CEOs need to master a series ofconflicting yet complementary dualities : urgency and patience; collective andindividual accountabilities; coaching and driving performance; student andteacher; and humility and boldness.


SV In my experience, I have seen that all CEOs are passionate in what they wantto achieve for their organisation. However, some of them fail due to followingreasons :

Focussing too much on the short term rather than linking what is beingdone in the short term to the medium/long term thinking for theorganisation.Be under the impression that as a CEO I am expected to know everythingand asking for help makes people think that I am not smart enough. Being

a CEO does not mean you knowall the answers, it is best to askfor and listen to ideas in theteam. The Know it all attitudealso brings in a bit ofarrogance in the way you dealwith people and issues and thisleads to downfall.Understimating competitionand not joining the dots thatare in front of you. Many atimes either out of overconfidence on their ownproduct/service or theirperception of the competitionand what they can achieve,CEOs tend to blinded by thisand leave some gaps open forthe competition to drivethrough to trump theorganisation before he/sheeven realises it.Similarly not listening andunderstanding what thecustomer needs and his/herchanging requirements willlead to the failure of thecompany and the CEO.Some CEOs believe that youneed to manage employees witha heavy hand to get things

CEO LEADERSHIPS.Varadarajan, Strategy & Talent Enabler, Life & Leadership Coach, Gurgaon

CEO has to remain true to himself & selfless

CEOs wishing totransform theirorganizations mustbegin bytransformingthemselves, startingwith their own mind-sets. Self-transformation isgoing to be one of themajor factors thatdifferentiate asuccessful CEO withthe rest. There needsto be a shift fromreactive to creativemindset.

About the Author

With over 35 years of experience as HR leader, S. Varadarajan is an alumnus of XLRI, Jamshedpur and ISTD, New Delhi. He is a Graduate Leadership and Life Coach, fromCoach for Life, USA, and a Hogan Certified professional. He has been with top brands like Tata, UB, TVS, KPMG, Wipro etc. He has received great deal of industry widerecognition.



done… without focussing oncreating an environment wherepeople are able to take ownershipand perform thus creating a positivecompany culture. This leads tocreating an environment of fear andmistrust which leads to the downfallof the company and the CEO.

With ever changing businesslandscape, how the CEOs should aligntheir competencies to the newnormal?

SV Warren Bennis memorably said, "…the process of becoming a leader ismuch the same as the process ofbecoming an integrated human being".CEOs wishing to transform theirorganizations must begin bytransforming themselves, startingwith their own mind-sets. Self-transformation is going to be one ofthe major factors that differentiate asuccessful CEO with the rest. Thereneeds to be a shift from reactive tocreative mindset to meet the dynamicand ever changing/demandingenvironment. The CEOs also need tostart focusing more on creating anenvironment that fosters innovation,collaboration and value creation,which are so critical to face andovercome the uncertainties and thedisruption that we are facing in theenvironment today. As a CEO there is aneed for your presence to be felt inorganization, which is the 'being' partand also the 'doing' side, which is theexecution of the plans. How a CEO isable to create an optimal balancebetween 'being' and 'doing' willdetermine his/her success. The CEOhas to constantly step back and reflect,acknowledging the fact that he/shedoes not have all the answers and alsodo not need to have them! Thus in thechanged narrative, asking questionsrather than providing solutionsbecomes the norm for a CEO in thepresent context. This helps the team tocollaborate better and look at beyondthe box alternatives and thus enablingan improvement all around.

How has your view of leadership atthe top changed, with the currentstate of affairs - where businessleaders have been put under scannerfor their deeds with reference to fewrecent cases?

SV In the present day context with somuch focus on how companies operateas also the advent of the social media, alot of focus is on the way CEO leads theorganisation through the variousstages of the lifecycle of theorganisation. The dynamic nature of

the environment adds to the challenges and hence the CEO is literallyunder a microscope for every action he/she takes or not takes. I find thatin a few cases, success for a CEO breeds arrogance, greed and selfrighteousness which blinds them to take wrong and sometimes unethicaldecisions as well, that brings them and the organisations down. Manyexamples have emerged in the recent past as a proof of this across theworld including India. The geo political environment is also forcing theCEOs to take sides whether they like it or not and be 'politically correct' inwhatever they say or do so as to be in the right side of the powers to be.This does not augur well as the CEO needs to focus on what is right andgood for the organisation rather than for self and cannot sway to thechanging geo political climate in the country.

What are some of the areas of leadership that need improvement, considering the role of CEOs are evolving and expanding?

SV Keeping in view the current scenario of volatility, ambiguity anddisruption, CEOs need to realise that they are not Superman or Wonderwoman and that they will not have all the answers. They would need tostart doing things differently than stick to the traditional style of leadingthat was prevalent earlier. CEOs need to start embracing their ignorancesand start to listen and think and align to the fact that thinking from a placeof not knowing is essential for original, unexpected and breakthroughideas. Present day CEOs need to focus on setting directions for their teamand not the destination. In the present unknowable environment, it isbetter to work with the team to move with a clear direction rather than afixed goal which is not likely to be fixed anymore. They need to beorchestrators rather than a driver of performance. Another importantarea which CEOs of today need to focus on is mindfulness which helpsthem experience the living benefits of mental clarity and focusedattention and improved vitality and equanimity which will be so criticalfor their success. Mindfulness also enables creating an agile and flexiblemindset which is so critical for the CEO's success today.

Any road map in your mind to develop talents and skills that grooms CEOs of the future?

SV It is necessary for those aspiring to be CEOs to go through the grind indifferent areas of experience in their years in the organisation. The mostbasic requirement is for anyone aspiring to be a CEO to be able to haveself mastery in what they do and practice mindfulness to create space intheir mind to choose a different approach. This also helps in fostering agrowth mindset by caring, being curious and open all the time.

I would think that when organisations are grooming executives tobecome CEOs, they have to be exposed and undergo developmentalassignments to experiences related to fix-its and turnaround operations,cross functional moves, large scale assignments, different scopeassignments, heavy strategic demands, international assignments whereapplicable and necessary and situations/initiatives which has significantpeople demands. These assignments need to provide an opportunity tolink and apply the learning to existing and new agile-transformationexperiments and initiatives.

What is one piece of advice you would like to offer to the future CEOs?

SV In the present day context, the CEOs role is becoming more complex and isalways under the microscope. My advice would be for those aspiring to beCEOs to ensure that they get the right cross functional exposure and gainexperiences across a wide variety of assignments to be techinically soundfor the role. Equally of more important is for them to go back to the basicvalues of management and relationship by being true to himself/herselfin everything they do. They have to be passionate on what they want to doand remain selfless and be able to face themselves everyday in the mirrorto confirm that they have been true to themselves. By this, they should beable to build a sense of trust and collaboration in the teams they lead, andget them to work towards an agreed direction. Since sometimes it will belonely at the top, they need to build a discipline of self reflection andintrospection and practice mindfulness to increase their inner power tolead themselves and the organisation in that order. BM



CEO LEADERSHIPProf Y K Bhushan, Sr. Advisor and Campus Head, ICFAI Business School (IBS) - Mumbai

CEO should develop selfawareness and humility

Along with thedevelopment ofpeople, CEO has totake care of his ownlearning anddevelopment byimbibing knowledgeand skills to deal withfuture challenges inbusiness, working lifeand to work withfuture workforce.

About the Author

Starting his career in 1957, Prof. Bhushan has completed 60 years in Education, Training and HR of which 33 years have been spent in MBA level education. His experienceincludes forays into Co-operative Management, Bank Management and Training in Banks. Several awards have also been conferred on him.


YK A CEO can have impact that last for a longer span by keeping aneye on the future developing agility and speed; developingpeople : people support & empowerment; consistency andreliability. In the present business scenario the two mostimportant factors that appear as imperative are :

1. Deep grounding and continued foundation in ethics (takingvalue-driven decisions in the small as well as the big things).

2. Consistency - Practicing what is preached.

3. Being an innovative and a continual learner in a workingworld that is being taken over by technology.

A CEO also needs a charismatic personality and should care forthe development of his people along with the growth of theorganisation to augment sustainability. However, for lastingimpact, a CEO has to be steadfast, resilient and be willing tochange with the times and visualise what could happen decadesahead.

4. Change Orientation

A strong quality that CEOs require in the current scenario is theability to pre-empt changes that can happen due to technologicaladvancement and the ability to gear up people capability to workin futuristic work environments that could transform rapidly dueto technological advancement.

Along with the development of people, a CEO has to take care ofhis own learning and development by imbibing knowledge andskills to deal with future challenges in business, working lifeand to work with future workforce.

It is also important forthe CEO to be extremelyparticular about qualitystandards and build apositive performance andprecision oriented workculture. This can be doneby constantly sendingmessages that sub-standard work processesare not welcome.

What can be the mistakesthat lead to the fall of a CEOwith some examples?

YK Mistakes that a CEO canmake

It takes years andsometimes an entirelifetime to reach thesummit. One ethicalmistake can lead a CEOto lose his glory. Onebreach of faith and trustcan cost you the positionand defame you and theorganisation (Case of



ICICI Bank).Assuming that yourbusiness model andbrand will last foreverand will not bechallenged.Assuming that nobodycan question you, be itthe organisation,stakeholders or yourpeople.Failing to adapt tofuturistic changes.Not investing in peopledevelopment. Not takingyour people along withyou.Lack of adaptability tochanging businessenvironment.Being arrogant andcomplacent.Not adopting a socialservice orientation inbusiness.Not adapting the latesttechnology and failing toinvest in technology.Caring too much for theorganisation andforgetting people.Not allotting time forpeople.Not allotting time tothink of the future.As per an HBR study, notspending time on selfand family.Ignoring competitors.Concentrating on only afew people in theorganisation and failingto invest in learning anddevelopment ofemployees.

With an ever changingbusiness landscape, how theCEOs should align theircompetencies to the newnormal?

YK In the current businessenvironment, data issupreme and so istechnology. In the newbusiness scenario, CEOsshould embracetechnology; innovate andthink of howorganisations wouldshape up in the next twodecades and the role willpeople have in the growthof organisations.

More and more organisations are growing virtual, along withbuilding people capabilities, CEOs need continual up-gradationof their own knowledge and skills; people skills; learning fromtheir people inside the organisation and learning fromcompetitors; being humble (personal humility as well asintellectual humility); learning to be a good listener, constantlyupgrading technical as well as soft and interpersonal skills.


YK In today's business scenario, leaders have to be ever morevigilant of their own actions, deeds and words. You could be arole-model today and could be indicted tomorrow. In the recentpast, leaders who were being show-cased for their achievementsand success lost their glory overnight for issues related toethics and transparency. Supremacy therefore cannot be takenfor granted.A leader can sustain himself only through evidence ofcharacter, integrity, dedication and communication along withthe ability to survive in volatile business processes.A leader cannot always depend on his charisma to win overpeople and also understand charisma is not the onlycharacteristic of reputation. The leader's actions, not words orappearance, make his image. In today's business scenario, evenprivacy cannot be taken for granted. CEO, therefore, shouldfocus on being extremely transparent, have an eye for detail, beresilient and have strength of character.

What are some of the areas of leadership that needimprovement, considering the role of CEOs are evolving andexpanding?

YK CEOs have to be able to stand for the organisation in turbulenttimes, and also think beyond the organisation - such as 'thinkinguniverse', "thinking about the environment and ecology" andmainly, "think of the people" working with you. When businessmodels change, CEOs have to build people's capability to adapt tochange and work in a new world. This needs investment intraining and development. CEOS have to pre-empt changes intechnology which can lead to overnight changes in businessmodels.

People in the organisation speak the language of the CEO. CEO,therefore, must learn the art of speaking the language that hewants his people to speak.CEO should learn the fine art of "being approachable" - whereyour people can walk up to you and own up their mistakes andbe confident that their leader will understand and help themout.


YK Roadmap to develop talents and skills to groom CEOS lies inRegular Training Intervention for top leadership in behaviourand skills and coaching for top leadership. CEOs should developself-awareness and humility. BM

In today's business scenario, leaders have to be ever morevigilant of their own actions, deeds and words. In the recentpast, leaders who were being show-cased for theirachievements and success lost their glory overnight for issuesrelated to ethics and transparency.



What are the qualities and traits that make a CEO with everlasting impact?Have they changed in the present business environment from the past?TM Leading by example and walking the talk : It's extremely easy for a CEO

to speak at forums but what employees are looking for is how he/she leadsthe organisation. The value system that he/she brings to the organization isvery important.

Transparency : Employees really appreciate transparency. If there is badnews, employees prefer that they hear it from the CEO rather than from thenewspapers and media.

Leadership : The ability to lead diverse teams towards delivery and results.

The business environments have changed and CEOs are under immensepressures. They have to not only keep abreast of the business but also knowand understand what the board of directors expects him/her to deliver. Theyhave to constantly watch out for the dynamics of the business environment aswell as the internal politics.

What can be the mistakes that lead to the fall of a CEO with some examples?TM A number of CEOs feel that they are in exalted positions often forgetting the

reality of the environment. The landmines for a CEO could be the coteries thathave existed that can pull the person down especially in a family run business.This is also prevalent in multinationals and in fact can be worse as one neverreally knows who the enemy is. There is also the constant threat of thebusiness and ethics line which in many companies is used as an excuse to pulla person down.

With ever changing business landscape, how the CEOs should align theircompetencies to the new normal?TM Agility is the name of the game. All CEOs have to be proactive and think ahead

and plan for the future. Constant mapping of the dynamics of the businessenvironment as well as investing in themselves to understand the new agetechnology is key.

How has your view of leadership at the top changed, with the currentstate of affairs - where business leaders have been put under scanner fortheir deeds with reference to few recent cases?TM Any leadership position was always revered and employees in a strange way

put their CEOs on a pedestal.Unfortunately to realize, especiallyin the recent times that they havefeet of clay. Recent examples arethat of Tata Sons, ICICI bank, andILFS.

What are some of the areas ofleadership that need improvement,considering the role of CEOs areevolving and expanding?TM Leadership is something which is

dynamic and every environmentneeds different leadership skills andstyles. Areas that need improvementare personal value systems andkeeping the organisations interestbefore one's own.

Any road map in your mind todevelop talents and skills thatgrooms CEOs of the future?TM Even Leaders are human beings.

They need the space. They needcoaches and mentors who they can go to get guidance and torejuvenate themselves. They needto invest in themselves by keepinginformed and educated on the latesttrends in innovation andtechnology.

What is one piece of advice youwould like to offer to the futureCEOs?TM Trust in yourself and "Never Say its

Impossible."

CEO LEADERSHIPDr.Tanaya Mishra, Sr Consultant HR, Mumbai

CEO has to be aware of landminers

The landmines for aCEO could be thecoteries that haveexisted that can pullthe person down.There is also theconstant threat of thebusiness and ethicsline which in manycompanies is used asan excuse to pull aperson down.

About the Author

Having unique and diverse experience of having worked across industries ranging from Manufacturing, Retail, Insurance, IT/ITES. Dr. Tanaya Mishra is currently intoconsulting business specializing in the areas of strategy and change management. Lastly she was with Accenture as Managing Director HR, APAC. She has won manyaccolades and awards the recent ones being the Women Super Achiever award 2016 and the Most Influential HR Leaders in 2017 and rated as India’s top HR professionals.

BM


LABOUR PROBLEMS & SOLUTIONS

Anil Kaushik Management Expert -HR & IR

LINE

Solutions provided here are in context to narrated facts & not in general.

Enquiry should be completed within a period of six months

and if not possible due to nature of inquiry, should be

completed within one year.

Q. Can P.F. authorities demand to produce records of contractorlabour engaged by exempted company under P.F. Act, having theirown trust?

Ans. Not necessarily. In the event of exemption, the employer shallmaintain accounts of his own employees and shall submit returns to theRegional PF commissioner with respect to his own employees only forhis verification. After exemption, the employer is not obliged to submitaccounts with respect to the employees of the contractor. On acombined reading of the relevant provisions of the Act and scheme, it isclear that in case of exemption from operation of the scheme allowed tothe employer, he is out of the net of the scheme.There is no legal dutyon such employer to maintain the provident fund accounts of theemployees of the contractor.The contractor himself would be liable tomake compliances under the EPF Act.

Q. When the factory manager is the disciplinary authority as percertified Standing Orders, he happens to be a complainant also in adisciplinary proceedings against an employee and also appeared asmaterial witness in inquiry, then who should be the disciplinaryauthority in such circumstances?

Ans. In such peculiar circumstances, where the disciplinary authorityitself is the complainant and has also appeared as witness in inquiry,then he should not act as punishing authority in the matter as it wouldbe in violation of principles of natural justice. Any other person seniorthan factory manager, like any functional director or CEO or MD of thecompany can act as punishing authority which would be proper as heldby Punjab & Haryana HC in the case of Meters & Instruments Pvt. Ltd. vs.Dev Dayal Sharma 1982 II LLN 625.

Q. We have to initiate the disciplinaryproceedings against one employee. Isthere any time limit prescribed for themanagement to complete the enquiryand decide the matter?

Ans. Principles of natural justice requirethat the disciplinary proceedings againstthe employee should not be delayedunreasonably and matter should bedecided as early as possible. RecentlySupreme court in the case of Prem NathBali vs. Registrar High Court of Delhi 2016I CLR 321; 2016 (148) FLR 736 has heldthat enquiry should be completed withina period of six months and if not possibledue to nature of inquiry, should becompleted within one year.

In this case, the disciplinary proceedings,which commenced in the year 1990,continued for more than nine years.Pending disciplinary proceedings, theappellant sought revocation ofsuspension order but suchrepresentation made by the appellantwas not considered.

The Supreme Court in the case took astrong note of the undue delay caused indisciplinary proceedings.The Courtstated that due to such unreasonabledelay, the appellant naturally suffered alot as he had to survive only onsuspension allowance for a long periodof 9 years.

S.C. has also held that it is the duty of theemployer to ensure that the departmentalinquiry initiated against the delinquentemployee is concluded within the shortestpossible time by taking priority measures.In cases where the delinquent is placedunder suspension during the pendency ofsuch inquiry then it becomes all the moreimperative for the employer to ensure thatthe inquiry is concluded in the shortestpossible time to avoid any prejudice to therights of the delinquent employee.

That every employer (whether State orprivate) must make sincere endeavour toconclude the departmental inquiryproceedings once initiated against thedelinquent employee within a reasonabletime by giving priority to suchproceedings and as far as possible itshould be concluded within six months asan outer limit.


LABOUR PROBLEMS & SOLUTONS

LINE

Where it is not possible for the employer to conclude due to certainunavoidable causes arising in the proceedings within the timeframe then efforts should be made to conclude within reasonablyextended period depending upon the cause and the nature ofinquiry but not more than a year.

Q. We, in public sector undertaking are very particular aboutsuppression of information about past criminal conduct byemployee. My confusion is how we should deal such cases where itis found that the employee has suppressed the relevantinformation about criminal conduct and behaviour. Can youprovide some clarification on the point?

Ans. Supreme court in the case of Avtar Singh vs. Union of India,Civil Appeal No (s). 18798/2017 arising from SLP (C) No. 20525/2011decided on 15.11.2017 considered the cleavage of opinion invarious decisions on the question of suppression of information orsubmitting false information in the verification form as to thequestion of having been criminally prosecuted, arrested or as topendency of a criminal case.

The court laid down the following guidelines for the employer andstated that any of the following recourse appropriate to the casemay be adopted: -

In a case trivial in nature in which conviction had been recorded,such as shouting slogans at young age or for a petty offencewhich if disclosed would not have rendered an incumbent unfitfor post in question, the employer may, in its discretion, ignoresuch suppression of fact or false information by condoning thelapse.

Where conviction has been recorded in case which is not trivial innature, employer may cancel candidature or terminate services ofthe employee.

If acquittal had already been recorded in a case involving moralturpitude or offence of heinous/serious nature, on technicalground and it is not a case of clean acquittal, or benefit ofreasonable doubt has been given, the employer may consider allrelevant facts available as to antecedents, and may takeappropriate decision as to the continuance of the employee.

In a case where the employee hasmade declaration truthfully of aconcluded criminal case, the employerstill has the right to considerantecedents, and cannot becompelled to appoint the candidate.

In case when fact has been truthfullydeclared in character verification formregarding pendency of a criminal caseof trivial nature, employer, in facts andcircumstances of the case, in itsdiscretion may appoint the candidatesubject to decision of such case.

In a case of deliberate suppression offact with respect to multiple pendingcases such false information by itselfwill assume significance and anemployer may pass appropriate ordercancelling candidature or terminatingservices as appointment of a personagainst whom multiple criminal caseswere pending may not be proper.

If criminal case was pending but notknown to the candidate at the time offilling the form, still it may haveadverse impact and the appointingauthority would take decision afterconsidering the seriousness of thecrime.

In case the employee is confirmed inservice, holding departmental enquirywould be necessary before passingorder of termination/removal ordismissal on the ground ofsuppression or submitting falseinformation in verification form.

For determining suppression or falseinformation attestation/verificationform has to be specific, not vague.Onlysuch information which was requiredto be specifically mentioned has to bedisclosed. If information not asked forbut is relevant comes to knowledge ofthe employer the same can beconsidered in an objective mannerwhile addressing the question offitness. However, in such cases actioncannot be taken on basis ofsuppression or submitting falseinformation as to a fact which was noteven asked for.

Before a person is held guilty ofsuppressio veri or suggestio falsi,knowledge of the fact must beattributable to him.

Where conviction

has been recorded

in case which is

not trivial in

nature, employer

may cancel

candidature or

terminate services

of the employee.

BM



AdjudicationTo prove photo copies in evidence, the party has tosummon the original record thereof from theopposite party by moving an application before theIndustrial Adjudicator.

Photo copies of any record would not be considered by theIndustrial Adjudicator until original thereof are not seenby him.

Workman has to prove his version, in the absence of anydocumentary evidence, by calling any of his co-employees'in witness box through court or himself.

If the management does not submit original of anydocument, despite summoning the same through theCourt, an adverse inference would be taken against theManagement.

The official who was maintaining records of theManagement may be summoned to prove the photocopiesof relevant records.

Chhavi Chandra Jha vs. Vishwas Karma EngineeringWorks. 2019 LLR 392 (Delhi H.C.)

If the amendment actually goes to the root of thematter, workmen should be allowed to withdraw thewrit petition for filling the fresh petition instead ofdismissal of writ.

When amendment in writ petition is crucial and withoutamendment writ petition cannot survive, it is better towithdrawn the writ petition with liberty to file it again byincorporating required amendments and reasons thereto,if any.

Automax Karamchari Union vs. State of Haryana andOthers. 2019 LLR 414 (P&H H.C.)

Contract LabourWhen no contract was there between the principalemployer and the contractor, qualification ofcontractual workers was prescribed by P.E., dutyroasters were counter signed by officer of P.E.,workman was being supervised by P.E., power ofdisciplinary action was with P.E. wages and otherdues were also fixed by P.E. workmen were entitled tofood at subsidized rate at canteen of P.E., wages wereprepared on the basis of certificate issued by P.E. andworkmen were doing work at par with permanentemployees, such arrangement would lead to establishrelationship between P.E. and contract Labour.

Minority or unrecognized union can validly raise an'industrial dispute' as per Section 2(k) of the IndustrialDisputes Act, 1947 which does not restrict the ambit of thedefinition of 'industrial dispute' to a dispute between anemployer and a recognized majority union but takeswithin its wide sweep any dispute or difference betweenemployer and workmen including a minority union.

Employer-employee relationship would be taken as inexistence when workmen continued rendering services topetitioner-principal employer for a long time where therewas no valid contract between petitioner and contractor,workmen were not issued appointment letters by any ofthe contractor, salary of contractual workmen were paidin cash whereas that of regular employees through bank,qualification of the contractual workmen was prescribedby the petitioner, duty roasters were countersigned by theofficers of the petitioner, workmen continued whereascontractors were changed, attendance registers were notmaintained by the contractor (s), work was of perennial innature, work of the workmen was being supervised by the

From the

Court Room



Petitioner, power of disciplinary action was with thepetitioner, wages and other dues were also fixed by thepetitioner, workmen were entitled to food at subsidizedrate at the canteen of petitioner, wages were prepared onthe basis of certificate issued by petitioner, workmen weredoing work on par with the permanent employees, cap andemblem were issued to the workmen by the petitioner,irrespective of the fact that ESI and EPF contributionswere deducted and paid by the contractor (s), contractorwas providing uniforms, washing allowance, house rentallowance, he was having valid licence and petitionerregistration under CLRA Act, workmen continuedwhereas contractors were changed, Union was notrecognized.

Where the interest of the workmen amounts to communityof interest, the industrial dispute raised by the workmenthrough unrecognized union, since the recognized unionof principal employer has not espoused would not be a barin raising an industrial dispute by such workmen.

Mere social benefits i.e., P.F., ESI, Bonus and entire wagesetc. paid by the contractor, being protected and deductedfrom the wages of workmen by the contractor, cannotdemolish the employer-employee relationship betweenworkmen and the petitioner-principal employer.

Continuous long employment near about a decade, objectof not making regular appointments in a legal mannerconferring upon them any status and privileges of regularworkmen without process of regular appointmentobviously amounts to unfair labour practice punishable.

An employer cannot be allowed to take benefit of his ownwrongs bypassing its own Recruitment Rules resultinginto obvious discrimination and an unjust inequality.

When the Labour Court after having found the contractbetween principal employer and contractor sham andcamouflage, has rightly awarded regularization of theworkmen with arrears of wages.

Bosch Limited, Naganathapura Plant vs. Labour throughKarnataka Rakshak and General Workers' Union. 2019 LLR423 (Kar. H.C.)

Court JurisdictionDelhi court will have no jurisdiction to adjudicatethe unpaid wages claim of the employee, employedand appointed in Noida.

An employee is not entitled to raise his/her claim forunpaid wages/salary before the competentauthority/court in Delhi State against his/her employerwhen he/she was employed by the employer at Noida (UP)who was having no branch or unit or office at Delhi.

The competent authority or Court in Delhi State will notbe having territorial jurisdiction to entertain and try thedispute of the workmen against their employees whensuch employer does not have any branch/office/unit inDelhi State.

M/s. Prasad Psycho Corporation & Anr. vs. LabourDepartment & Anr. 2019 LLR 366 (Delhi H.C.)

Disciplinary ProceedingsEx-parte inquiry would be invalid when neither E.O.record the facts available on record nor inquiryreport was supplied to him to rebut the findings ofE.O.

An enquiry is liable to vitiated holding it not fair andproper being violative of principles of natural justicewhen workman was proceeded ex-parte, Enquiry Officerrecorded evidence of Witness of Management, crossexamination of workman could not be conducted,evidence of Management was closed on the same day,lengthy enquiry report was submitted on next dayholding the workman guilty of charges of demonstration,using derogatory language, abusing, raising slogans andattempting to round up other workmen, frightening andthreatening them since cross examination of MW couldnot be conducted, for want of opportunity which was notgiven by the Enquiry Officer, even the Enquiry Officerdid not record the facts available on record, copy ofenquiry report was not supplied to the workman, therebydenying opportunity to the workman to rebut the findingof the Enquiry Officer.

The Enquiry Officer would be held biased if he conductedthe ex-parte enquiry by improperly proceeding againstthe workman on the date when he recorded themanagement evidence whereas the case was not listed forrecording of evidence as it was fixed only for theworkman to see any document or check the record orobtain copies thereof and no prior notice in this respectwas given to the workman.

Show cause notice indicating that Management hasdecided to dismiss the workman shows biased mind ofthe disciplinary authority and calling explanation fromthe workman cannot be considered 'giving opportunity'but 'an eye wash and empty formality' rather malafide onthe part of management.

The law is well settled that a plea of fact not taken beforethe Tribunal/Labour Court can't be allowed first timebefore the Writ Court.

If the Management did not seek permission to leadadditional evidence before the Tribunal or reserved itsright for the same, it cannot raise such a grievance beforeHigh Court for the first time.

An enquiry proceeding is liable to be vitiated for non-supply of list of witnesses and documents on the basis ofwhich the charge sheet was issued and passing a vagueorder that workman can inspect the documents if suchact on the part of the disciplinary authority has causedprejudice to the interest of the workman depriving himfair and reasonable opportunity to defend himself.

Writ Court is not entitled to act as a Court of appeal todisturb the finding of fact arrived at by the Tribunalunless they are based on 'no evidence' or are perverse,irrational, illegal and arbitrary since its jurisdiction isonly supervisory one.

The Managing Director, Green Roadways Pvt. Ltd. vs. ThePresiding Officer, Industrial Tribunal, Batinda & Another.2019 LLR 386 (P&H H.C.)

When standing orders do not provide assistance oflawyer to workman in enquiry, such demand ofworkman for representation by lawyer would not bejustified.

When the enquiry is to be held to prove misconduct (s) onthe basis of Standing Orders of the company whereinprovision of assistance of lawyer to be engaged by thedelinquent employee in enquiry proceedings, is notprovided, such demand by the workman, being not havingsupport of any absolute right, would not be justified.

Demand of engagement of lawyer by the delinquentemployee in enquiry proceedings, without any



peculiarity/necessity shown and proved justifying hisdemand, is not justified.

For justifying demand of assistance of lawyer in enquiryproceedings, the workman has to that without assistanceof lawyer, any of his valuable right or principles ofnatural justice would violated on the basis of suchpeculiar facts and circumstances.

Hindustan Unilever Ltd. vs. Prashant and Ors. 2019 LLR419 (Bom. H.C.)

DismissalDismissal justified for misconduct ofmisappropriation.

Punishment of dismissal from service cannot be said tobe shockingly disproportionate or unreasonableexcessive to the misconduct of misappropriation provedagainst the delinquent employee.

When there is neither any procedural locuna norviolation of principles of natural justice, in holding theenquiry by an independent Enquiry Officer, andappreciated by the disciplinary authority and appellateauthority, it can't be vitiated by the High Court that toowhen no procedural lacuna or violation of principles ofnatural justice have been pointed out by the delinquentemployees.

It is impermissible for the Writ Court to re-appreciate theevidence which had been considered by the enquiryofficer, disciplinary authority and appellate authority.

Writ Court does not act as an appellate authority since itsjurisdiction is confined to correct error of law orprocedural error, if any, resulting in manifestmiscarriage of justice or violation of the principles ofnatural justice.

Hari Kishore Singh vs. Allahabad Bank. 2019 LLR 439(Jhar. H.C.)

Employees’ Provident FundThe EPF Appellate Tribunal ought not to have passedanother order deciding the same appeal.

If the earlier order pertains to some other concern andagainst that order a review application is pending, it is theTribunal to clarify the matter by passing afresh appropriateorder.

Under the circumstances, impugned order is set aside andmatter is remitted back to the Tribunal to pass a fresh orderin the appeal and also to decide respondent's reviewapplication expeditiously.

Central Board of Trustees (EPF) vs. M/s. Nancy Krafts. 2019LLR 445 (Delhi H.C.)

If the judgment of which review petition is soughtdoes not suffer from any error apparent warranted itsconsideration, review petition would not sustain.

Review petition is liable to be dismissed if the petitionershave not placed any material to substantiate their assertionwhich goes contrary to the finding already given.

Smt. Vijay Baijal vs. Regional Provident FundCommissioner, Jaipur. 2019 LLR 447 (Raj. H.C.)

Recovery of EPF dues cannot be made withoutinitiating 7-A proceedings.

Proceeding under Section 8 (F) of the Employees' ProvidentFunds and Miscellaneous Provisions Act, 1952 initiated by

instructing the Bank to adopt the amount of petitioner-employer towards recovery of EPF dues, without firstdetermining the EPF dues by holding proceedings underSection 7-A of the Act, is illegal and not permissible.

It is settled position in law that a thing is required to bedone strictly as per law and any deviation thereto,ultimately would make the provisions of no effect.

M/s. Usha Martin Ltd. vs. Employees Provident FundOrganization. 2019 LLR 449 (Jhar. H.C.)

Writ petition challenging the order of the EPFAuthority is maintainable if the concerned EPFTribunal is not having Presiding Officer.

If appeal against the order of the EPF Authority has beenfiled, writ petition pending before Writ Court would notsurvive further.

M/s. The Church of South India vs. The EPF Organisationetc. 2019 LLR 452 (Kar. H.C.)

Damages cannot be effected without establishing theelement of intention and deliberate delay on the partof employer.

Imposition of damages under Section 14-B of theEmployees' Provident Funds and Miscellaneous ProvisionsAct, 1952 without establishing element of mens rea or actusreus i.e. intentional and deliberate delay on the part of theemployer is not sustainable.

Mechanical imposition of damages under Section 14-B ofthe Employees' Provident Funds and MiscellaneousProvisions Act, 1952 is not sustainable.

Assistant Provident Fund Commissioner vs. M/s. MohantiEnglish Medium School & Anr. 2019 LLR 453 (Chht.garh H.C.)

Remittance of EPF dues in instalments on account offinancial crisis is permissible being realistic in regardto the practical difficulties since entire crops weredestroyed by the flood.

Elstone Tea Estate vs. The Regional Provident FundCommissioner, Kerala. 2019 LLR 454 (Ker. H.C.)

Without ascertaining willful and deliberate delay onthe part of employer while depositing EPF dues, theimposition of damages is not justified by the EPFAuthority.

While imposing damages under Section 14-B of theEmployees' Provident Funds and Miscellaneous ProvisionsAct, 1952, the EPF Authority must apply its mind in respectof quantum of damages by establishing willful anddeliberated delay on the part of employer while depositingEPF dues.

Employees' Provident Fund Organisation Kozhikode vs.Bhagwati Textiles Ltd. and Another. 2019 LLR 455 (Ker. H.C.)

An order passed by incompetent authority is notsustainable.

Indus Motor Company Private Limited vs. Employees'Provident Fund Organization etc. 2019 LLR 456 (Ker. H.C.)

The deposit collectors, engaged by Banks areemployees and commission paid to them is basicwages, attracting EPF contributions.

In the case of M/s. Bridge and Roofs Co. Ltd. vs. Union ofIndia, AIR 1963 SC 1474, the Supreme Court has held thatwhatever is payable in all concerns and is earned by allpermanent employees, is liable to be included in 'basicwages' for the purpose of contribution as provided undersection 6 of the Employees Provident Funds andMiscellaneous Provisions Act, 1952 but whatever is not



payable either by all concerns or may or not to be earned byall employees of the same concern is excluded from 'basicwages' for the purpose of EPF contributions.

Dearness allowance and retaining allowance being paid inall concerns is included in section 6 of the Act whereasHouse rent and overtime allowance being not paid to allemployees or by all concerns is excluded from basic wages.

Where payment to an employee is made on piece rate basis,there is no minimum, worker is free to produce as much oras little as he likes, such payment would be 'basic wages' asdefined under section 2 (b) of the Act but production bonusbeing paid in addition to 'basic wages' depending upon extraproduction produced by the concerned employees, would beout of purview of 'basic wages'.

Since Deposit collectors are paid all payments in the shapeof commission depending upon terms of their serviceagreement, such commission would constitute their wages,deposit collectors would be employees of the bank.

The South Malabar Gramin Bank vs. The RegionalProvident Fund Commissioner and Another. 2019 LLR 457(Ker. H.C.)

Order, without considering documents submitted byemployer, cannot be sustained.

An order passed by the EPF Authority without consideringthe documents submitted by the employer is liable to bequashed and remitted back to the EPF Authority for passinga fresh reasoned order after giving proper opportunity ofhearing to the parties concerned.

EPF contributions are collected for welfare of workers andwhen the employer has taken a specific stand that itsfactory/establishment is not running since long then if theEPF Authority wants to determine the EPF dues, it mustreveal names and identity of beneficiaries since merecalculation on papers is not sufficient.

N. Krishnan (Died) and Others vs. The Employees ProvidentFund Appellant Tribunal, New Delhi. 2019 LLR 461 (Mad. H.C.)

An order passed by the Tribunal thereby reducing thepre-deposit of 75% as per Section 7-0 of theEmployees, Provident Funds and MiscellaneousProvisions Act, 1952, of the determined amount to40% without recording reasons thereof is notsustainable.

Rohlig India Pvt. Ltd. vs. Assistant Provident FundCommissioner, EPFO, Chennai. 2019 LLR 462 (Mad. H.C.)

EPF Authority has to supply copies of the documentsas required by the employer which are in itspossession within a reasonable time and withinprescribed limitation.

M/s. Satyam College of Engineering & Technology vs.Assistant Provident Fund Commissioner, Nagercoil. 2019LLR 463 (Mad. H.C.)

Only on the ground of absence of mens rea, order forimposition of damages is not liable to be dismissedwhen liability under section 7A of the Act is not indispute.

Liability to pay interest is to follow and there is no need toissue prior notice under section 7Q of the Act, for levy ofinterest, in this case since no arithmetical or typographicalerror is pointed out.

M/s. D.R. Textiles and Garments vs. The Assistant ProvidentFund Commissioner, Kanyakumari. 2019 LLR 464 (Mad. H.C.)

Under Section 7-O of the EPF Act, 1952, the EPFAppellate Tribunal is empowered to waive of orreduce the pre-deposit of 75% of the determinedamount by passing a speaking order recording reasons

thereto.

If the EPF Appellate Tribunal passes an order withoutrecording reasons, thereby reducing or waiving of the pre-deposit of 75% of the determined amount, remand back thesame to the Tribunal for passing a reasoned order isappropriate.

M/s. Young Brand Apparel Pvt. Ltd. vs. The RegionalProvident Fund Commissioner, Vellore. 2019 LLR 464 (Mad. H.C.)

EPF Authority has no locus to challenge the validity ofan order passed by Tribunal after an unexplaineddelay of over one year.

When the employee has already settled his dues with theemployer, his complaint for non-payment of PF dues for theperiod from 02/1977 to 02/2003, is not sustainable.

The Regional Provident Fund Commissioner vs. HindustanZinc Limited. 2019 LLR 466 (Raj. H.C.)

As per provisions of Section 2(e) of the EPF Act, 1952,the transferee firm who was depositing EPFcontributions being employer of the employees, isliable to default in payment, if any.

Prescribed limitation of 60+60 days is for filing appealagainst the order of the EPF Authority before the EPFAppellate Tribunal and not for filing writ petition againstthe order of the EPF Authority.

Rajasthan Rajya Sahakari Awasan Sangh Limited vs. RegionalProvident Fund Commissioner. 2019 LLR 467 (Raj. H.C.)

Issue of mens rea is determinative factor for decidingquantum of damages.

While deciding imposition of quantum of damages, the EPFAuthority ought to consider the factual position, on thebasis of documents produced by the employer or detectedby the Enforcement Officer during inspection, to find out asto how much period of delay is there on the part of thedefaulting employer, is remittance of EPF dues, whetherthe defaulting employer is regular defaulter or his mistakein an incidental or due to any other reasons beyond hiscontrol or he has made delayed deposit intentionally for hisown gains etc., etc. by passing a detailed reasoned order.

In the absence of mens rea on the part of the employer, indelayed remittance of EPF dues, the imposition of quantumof damages would be on the lower side.

Dentsu Marcom Pvt. Ltd. vs. Central Board of Trustees,Through Assistant P.F. Commissioner Delhi (South). 2019LLR 469 (Delhi H.C.)

Employer-EmployeeRelationship

To rebut the claim of employee, employer has toestablish through records that he was not hisemployee.

If the workman lead evidence by way of an affidavit statingthat he was employed by the Company and the companyfails to submit records, specifically of attendance andpayment of wages, the employee will be treated as employeeof the Company.

Mere on the basis of evidence by way on affidavit thecompany cannot make an acceptable plea that the employeewas not its own employee or he was engaged by the Directorof the Company on his own personal capacity.

Aman Nagrath vs. Devender Mandal. 2019 LLR 364 (Delhi H.C.)



E.S.I.Travelling and conveyance allowances are not wagesunder ESI Act.

ESI Contributions is not payable upon the travelling andconveyance allowances paid to the employees by theemployer since such payments being additionalremuneration are excluded under Section 2(22) of the Act tobe covered under 'wages'. Even if instead of payingconveyance allowance, the employer had provided free toand fro transport to its employees, monetary value of thatfacility would not be part of wages.

Deputy Regional Director, Employees' State InsuranceCorporation vs. Management of the Lakshmi Mills CompanyLtd. 2019 LLR 381 (Mad. H.C.)

Appealable order under Section 45-AA of E.S.I. Actwithout exhausting the remedy, cannot be challengedthrough writ.

Order passed under Section 45-A of the Employees' StateInsurance Act, 1948 is appealable under Section 45-AA ofthe Act.

Filing of writ petition is not proper remedy to challengeorder passed under Section 45A of the Act till alternativeremedy of appeal under section 45-AA is not exhausted.

Rani Fatima Muslim Welfare Trust vs. Employees' StateInsurance Corporation & Ors. 2019 LLR 383 (Pat. H.C.)

For determining the contribution after registration ofthe establishment, ESIC has to grant an opportunityof hearing.

At the time of registration of an establishment underSection 2A of the Employees' State Insurance Act,opportunity of grant of hearing to the employer in respectof number of employees or otherwise is not required and atthat stage it is to be seen only if the requirements ofcoverage of the establishment under the Act are fulfilled.

After resignation of an establishment under Section 2A ofthe Act, the contribution is to be determined as per Section45A of the Act and the ESI Corporation has to grant anopportunity of hearing to the establishment beforedetermination of contribution under Section 45A of theAct.

Appreciation of evidence is to be inferred from the factualevidence brought on record without strictly following thetechnicalities. When the nephew of the proprietor of theestablishment was present at the time of inspection orpreparing of the visit note, did not lead evidence, Mustorroll and salary registers were maintained by theestablishment but not produced in evidence, the visitnotice/report though containing only first name of eachemployee instead of complete name, designation, length ofservice, amount of emoluments etc. would not by itselfvitiate the visit Note since no record was brought on recordby the appellant to raise doubt about the name of theemployees and merely on the ground that complete name ofemployee was not mention, visit Note cannot be faultedbecause despite opportunity granted to the employerremained unutilized by establishment to counter the visitNote.

Rameshchandra Madanlal Agrawal vs. Employees' StateInsurance Corporation & Anr. 2019 LLR 397 (Bom. H.C.)

Factories ActNon-payment of overtime is an offence underFactories Act for which occupier and manager can beprosecuted.

Non-payment of overtime or wages is an offence under theFactories Act, 1948 and also under the Payment of WagesAct, 1936. If prosecution is taken under the Factories Act,then Section 59(1) is attracted.

If there is any contravention of any of the provisions of theAct or of any rules made there under or of any order inwriting given there under, the occupier and Manager of thefactory shall each be guilty of an offence.

Occupier of factory as per Section 2(n) of the Factories Act,1948 means 'the person who has ultimate control over theaffairs of the factory and Section 92 of the Act covers bothi.e., occupier and Manager of the Factory each to be guiltyof an offence.

Rustom G. Joshi vs. State of Maharashtra and Another. 2019LLR 373 (Bom. H.C.)

GratuityDaily wager is entitled to gratuity under theprovisions of the Act.

Gratuity is payable to daily wagers/muster roll employeessince the Payment of Gratuity Act, 1972 does notdifferentiate in casual or regular or daily wagers which isalso in conformity with the CCS (Pension) Rules, 1972 anddepartmental circular dated 26.06.2006.

The Executive Engineer CPWD vs. Ghanshyam Singh andOrs. 2019 LLR 367 (Delhi H.C.)

Gratuity may be forfeited only to the extent of damageor loss caused by the misconduct of the employee andloss suffered by the employer and not more than that.

Payable gratuity may be forfeited as per provisions ofSection 4(6) of the Act and not otherwise.

Gratuity may be forfeited if services of the employeeconcerned have been terminated for proved misconduct ofmoral turpitude and riotous and disorderly behavior, in thecourse of his employment.

Not only riotous or disorderly behavior during workinghours at the establishment or any act of subversive ofdiscipline but willful insubordination or disobedience,habitual late attendance, habitual negligence and neglect ofworks may fall under the definition of 'moral turpitude'since unlike legal norms, moral norms are somewhatunformulated and keep on changing from time to time,society to society and even from individual to individualwhich makes it possible that an action which may beviolative of moral norms in one society may appearacceptable to another i.e. why it is to judged in theprevailing moral norms of the society.

Shri Surendra vs. Syndicate Bank. 2019 LLR 369 (Delhi H.C.)

Labour court judgment of calculating gratuity ongross salary is liable to be set aside as gratuity is to bepaid on basic and D.A. only.

Gratuity is to be calculated into account the basicsalary/wages plus D.A. and other allowances are not to betaken into account.

Grade Pay is payable to the employee for each month onoccupying a particular grade, the said component wouldbecome a part of actual pay and will have to be reckonedwith for calculating the gratuity amount.

Saint Xaviers High School vs. Shailaja Vishnu Deshpande.2019 LLR 375 (Bom. H.C.)

Teacher being employee under Payment of GratuityAct, is entitled to gratuity.

After amendment of Section 2(e) of the Act in 2009, the'teacher' is also covered in the definition of 'employee'.



By the amendment in the Act in 2009, the teacher is entitledto gratuity with retrospective effect.

Dhanalakshmi College of Engineering, Chennai vs.Assistant Commissioner of Labour (Controlling AuthorityUnder the Payment of Gratuity Act, 1972) and Another. 2019LLR 411 (Mad. H.C.)

Industrial Disputes ActTransfer of workmen is illegal, arbitrary, unjustifiedand amounting to victimization if effected withoutany exigencies of business or its administration.

When company was transferred by transferor company totransferee company, workmen working in transferorcompany, even issued transfer order on the letter head oftransferor company, to another unit of transferor company,would, in fact, be treated as transferred by the vendeecompany.

Transfer of workmen is an Unfair Labour Practice if thesame is effected arbitrarily without any business exigency.

The transferee continued agitating claim of the workmeninstead of statement before the Labour Commissioner thatthey did not issue the transfer order which prove itsbetrayed intention.

Management of Unimag Power Transformer Pvt. Ltd. vs.Umesh. 2019 LLR 435 (Kar. H.C.)

Interim ReliefEven if termination order is held to be legal, employerwill have no right to recover the amount fromworkman paid under Section 17-B of the Act.

A question of fact, cannot be examined by the SupremeCourt under Article 136 of the Constitution of India byappreciating the evidence adduced by parties de novo andeven a finding by the High Court in detail is binding on thisCourt being a finding of fact.

Proceedings under section 17-B of the Industrial DisputesAct, 1947 are independent in nature, not dependent uponfinal order in main proceedings and even if terminationorder is held to be legal employer will have no right torecover the amount paid under Section 17-B of the Act.

Dilip Mani Dubey vs. M/s. SIEL Ltd. & Anr. 2019 LLR 355(S.C.)

Maternity Benefit ActAfter expiry of service tenure, benefits undermaternity benefit Act cannot be extended to employee.

Elementary rule of service jurisprudence is that benefitsattached to a service come to an end once the service tenureexpires.

Benefit of social enactment i.e. under the MaternityBenefits (Amendment) Act, 2017 would not flow after theservice tenure expires.

Denial of grant of twenty-six weeks' maternity leave isjustified by the employer on the ground that benefit can beextended only to existing employees.

A clarification dated 12.04.2017 to the Maternity Benefit(Amendment) Act, 2017 was issued by the Ministry ofLabour & Employment of Government of India to the effectthat benefit of twenty six weeks of maternity leave is to beextended to contractual employees and also to consultant

women. Contractual period of employment of the employeeended on 15.05.2017, but to facilitate the employee to avail of12 weeks maternity leave, the contractual employment wasextended upto 30.06.2017. Since contractual employmentwas not further extended, she could be entitled to avail 26weeks Maternity Leave.

Dr. Artiben R. Thakkar vs. Delhi Pharmaceutical Sciencesand Research University and Another. 2019 LLR 363 (Delhi H.C.)

Part-Time EmployeeCompliance of provisions of section 25-F of the Act ismandatory even in the case of part-time worker at thetime of termination of his services.

Termination of services of a part-time worker who hasworked years together continuously without compliance ofSection 25-F of the Industrial Disputes Act, 1947, is illegalattracting reinstatement with back wages.

State of Haryana & Ors. vs. Presiding Officer, IndustrialTribunal-cum-Labour Court, Ambala & Anr. 2019 LLR 412(P&H H.C.)

ProbationTermination of services of Probationer on account ofunsatisfactory performance is justified since such atermination is simplicitor in nature. Termination ofprobationary services of a workman is notinfringement of any legal right of the workman.

Narender Kumar Sharma vs. Presiding Officer, IndustrialTribunal-cum-Labour Court, Rohtak. 2019 LLR 384 (P&H H.C.)

RegularisationDaily wager does not have any right for regularservices in lieu of his illegal termination.

Termination of services of a daily wager without followingthe mandatory provisions of Industrial Disputes Act, 1947,particularly Section 25-F of the Act, is illegal attractingreinstatement with back-wages.

A daily wager who raised industrial dispute after about 25years of his termination is not entitled to be regularized inservice.

Lumpsum Compensation of Rs. 1.00 lakh in lieu ofreinstatement with back wages is justified in view of hisservice tenure about one years and raising of dispute after25 years.

State of Uttrakhand & Anr. vs. Raj Kumar. 2019 LLR 357(S.C.)

ResignationWhen employee accepts and received the paymentafter resignation, such resignation cannot be said tohave obtained under coercion.

Plea of the workman that his resignation was obtainedunder coercion cannot be accepted when he has admittedhis signature and signature of witness on the receiptexecuted in token of receipt of settled money aftersubmitting his resignation and some part of the moneyreceived through cheque.

Plea of the workman that the witness was under theinfluence of the employer cannot be accepted in the absence



of cogent evidence in this respect.

M/s. Kay International vs. Raghubir Singh. 2019 LLR 361(Delhi H.C.)

Acceptance of resignation after receipt of withdrawalof resignation is not a valid acceptance.

It is always open to the employee to withdrawn hisresignation for valid reasons prior to acceptance of his/herresignation by the employer since till the date of validacceptance of resignation there would be no severance ofjural relationship between employer and employee.

Resignation submitted by an employee would come intoeffect only on its acceptance and prior to that acceptance, itis always open to employee to withdraw the same.

Sooryakanth vs. Kerala State Financial Enterprises Ltd. 2019LLR 415 (Ker. H.C.)

RetrenchmentTermination without complying provisions of Section25F of I.D. Act would be illegal leading toreinstatement.

Termination of services of an employee in violation ofSection 25-F of the Industrial Disputes Act, 1947, wouldattract reinstatement with back-wages.

Non-service of one month's notice or non-payment of onemonth's salary in lieu of notice, without conducting anyenquiry and proving guilt against the workman beforetermination of his services, non-payment of retrenchmentcompensation, is violation of provisions of Section 25-F ofthe Act.

When the workman avers that he has worked for more than240 working days and proves by leading cogent evidence andthe management has not produced the relevant records torebut the same, despite order of the Labour Court, it wouldstand proved that the version of the workman is correct.

Non-compliance of principles of 'last come first go' i.e. thetermination of the workman has been effected while juniorto him was working with the management.

Payment of compensation in lieu of reinstatement wouldnot be sufficient when service of the workman was provedto be more than 240 working days continuously and themanagement did not produce documents which were in itspossession, to rebut the version of the workman.

Municipal Corporation, Gwalior vs. Surendra Singh Yadav.2019 LLR 376 (M.P. H.C.)

Trade UnionWhen there is a dispute between two rival factions formanaging the affairs of trade union, such dispute canonly be resolved by filing a suite before civil court.Registar of trade union has no authority to direct theholding of election of union.

PUB Mangal Dai, BE-Sarkari Paribahan ShramikSangthan Darrang vs. State of Assam. 2019 (161) FLR 30(Gau. H.C.)

TransferIn the absence of any agreement, employee cannot betransferred to subsidiary company having no legalentity.

In the absence of any agreement between the employeeand the management, as per section 18(1) and 12(3) ofIndustrial Disputes Act, 1947, the employee cannot betransferred to subsidiary company having no legal entitysince such a transfer is denial of employment and illegal.

To maintain peace at the shop floor, when there wascontinued quarrel between two rival groups, thedisciplinary action, if any, including transfer of any ofthem, should have been taken against the aggressors andnot against the victim that too as per applicable standingorders and provisions of applicable laws.

M/s. Tasty Nut Industries vs. The Labour Court,Tirunelveli and Another. 2019 LLR 379 (Mad. H.C.)

Transfer when ordered in contravention ofrules/circular, would be illegal.

Transfer not made in accordance with Service Rules orsuch circular validly issued by the competent authority, isillegal and liable to be quashed. Any order of transferissued by the authority not having jurisdiction thereto isliable to be quashed.

Amol Radhakrushna Thakare vs. Maharashtra State RoadTransport Corporation. 2019 LLR 403 (Bom. H.C.)

Unauthorised AbsenceWhen termination order was issued after about 10years of issuing second show cause notice afterproving the charge of unauthorized absence, suchtermination would not be justified.

Dismissal from service on account of long unauthorizedabsence of more than 5 years or so is justified but delayedaction after 10 years without any cogent explanation onthe part of the Management, makes the order dismissaljust before 2 years prior to his age of superannuation isnot justified.

When the workman has expired during pendency oflitigation, the substitution of order of dismissal intodischarge on the request of his L.Rs. is also justified.

Bapu Tarachand Haral & Ors. vs. Zila ParishadAhmednagar. 2019 LLR 400 (Bom. H.C.)

WorkmanSales Promotion Officer when engaged inmanagerial capacity would not be workman underI.D. Act.

When an employee is not a 'workman', he is not entitled toinvoke provisions of Industrial Disputes Act, 1947 forresolving his service dispute with the Management.

An employee would not be a 'workman' if he was engagedin managerial/administrative capacity drawing salarymore than Rs. 1600 per month.

An employee, engaged as Sales promotion Officer,drawing salary more than Rs. 1600 per month andenjoying managerial or administrative capacity in thecompany would not be a 'sales promotion employee' as perSection 2(d) of the Sales Promotion Employees(Conditions of Service) Act, 1976.

Provimi Animal Nutrition India Pvt. Ltd. vs. Secretary,M.P. Medical & Sales Representatives Association & Anr.2019 LLR 404 (M.P. H.C.)

Courtsey - Labour Law Reporter, FLR, CLR and LLJ

BM


S.C. PF judgment : Much confusion,

less clarity

A cause for concern is that if the Provident Fund Contributions are payable for thepast, then the employers will have to deposit it using the employees' Universal

Account Number and EPF Account Number. But then who will bear the cost for pastcompliance and who will handle the problems related to the same?

H.L. Kumar, Advocate, Supreme Court, New Delhi

In its epoch making judgment by the SupremeCourt in the Regional

Provident Fund Commissioner (II)West Bengal vs. VivekanandaVidyamandir and Others, 2019LLR 339 has created confusionand concern in employer

community and sent wave length of enthusiasm and made thedepartment all activist to proceed against the employer who are notpaying contribution on certain allowances. The decision in theaforesaid judgment has created panic and has mainly followingproblems.

1. It has not made clear whether the ruling will have theretrospective or the prospective effect. However, the general feeling isthat it will have the retrospective effect and the major impact of it willbe for the period after September 1, 2014, for employees with a basicsalary of less than Rs.15,000/-. Because prior to that it was applicable forthose employees whose basic salary was less than Rs.6,500/-. This rulinghas, without doubt, made two categories one is for the period prior to 1stSeptember 2014 and the second one is after 1 September 2014. It is wellsettled law that unless the judgment states that it will have prospectiveeffect as it was stated in Union of India vs. Mohd. Ramzan Khan, 1991(78) FJR 207 and Electronic Corporation of India Ltd. vs. B. Karunakar,1994 LLR 391 (Five Judge Bench of the Supreme Court). It is pertinentto state here that no limitation has been prescribed for recovery of EPFcontribution and damages that too from the employers. Reference ismade to a judgment of Delhi High Court in Apex Public School vs.Central Board of Trustees, EPF Organisation, 2015 LLR 675 wherein ithas been held that there is no limitation prescribed under section 14-Bof the Employees Provident Funds and MP Act for recovery of damagesfor delayed deposit of contributions.

S.C. PF JUDGMENT : MUCH CONFUSION,LESS CLARITY


2. The Supreme Court has reiterated the principle laid down by it in1962 in the case of Bridge & Roof but with regard to the allowances, it hasleft some gaping holes. Hence, the test adopted to determine if anypayment was to be excluded from basic wage is that the payment underthe scheme must have a direct access and linkage to the payment of suchspecial allowance as not being common to all. The crucial test is one ofuniversally e.g. where the wage is universally, necessarily and ordinarilypaid to all across the board such emoluments are basic wages. In thisdecision, it has has been consistently followed by the employers and theemployees as well as the PF Department, through the variouscirculars/guidelines issued not only by the CPFC but also the Govt. ofIndia in exercise of the statutory powers of the Government under theAct, to issue directions for removing difficulties, wherein inter alia,compensatory allowance; special allowance; personal allowance - payover and above the "basic wages" and DA for skill, efficiency or past goodrecords; subsidy paid to workers in lieu of canteen facilities along withwashing allowance had been specifically mentioned as excludedpayments not amounting to "basic wages" and dearness allowance.Further as per information supplied by the EPFO dated 03 Oct., 2010under RTI Act, 2005 which is at page 44 of the additional documents filedby the petitioner, in I.A. No. 109673 of 2018, as per definition of "basicwages" given under Section 2(b) of the Act, HRA; Education allowance;Conveyance allowance; Washing allowance; Canteen or Food allowance;and some other allowances have been specifically stated to be excludedfrom "basic wages" and not attracting payment of PF contribution exceptdearness allowance and retaining allowance under Section 6 of the Act.The excluded allowances/payments were, therefore, not being includedin "basic wages", dearness allowance and retaining allowance, if any, byall the employers, for payment of the PF contribution in the Fund.However, they would now be required to be treated as "basic wages" forpaying PF contribution in the Fund on the said allowances/amounts also.

3. It is more in the nature of the interpretation of the existing law andso it is presumed to be free from the period of limitation. The providentfund authorities will certainly make demands by determining theamount of provident fund contributions (both employer and employeeshares) to be payable by the employer. They will also impose damages andinterest for the delayed payments as defaulted. The recovery processunder Employees Provident Funds & MP Act is different from that asprovided under Civil Procedure Code. In Harjaspal Singh Juneja vs.Recovery Officer, Employees' Provident Fund Organisation, 2013 LLR 455the Punjab & Haryana High Court has held that the Act clearlydistinguishes between civil proceedings to ensure recovery and penalconsequences as a deterrent, prescribing no provision that one remedy isdependent on the other. The complaints pertain to violation of differentschemes constituting separate causes for filing the complaints.Obligation of an employer covered under the Act has been violated.Hence the recovery can be by attachment and sale of the property of theestablishment, rest of the employer and his detention in prison,appointment of receiver for management of property of establishmentfor the employer etc.

There is no doubt that this ruling has come as a windfall for thoseemployees, whose salary was less than Rs. 15,000/- because now theiremployers will have to make good the short contributions for those yearsif it is made applicable with retrospective effect. The ruling has certainlyclarified that the allowances (a) which are variable in nature, (b) linkedto an incentive for production resulting in greater output by an employee,or (c) which are not paid across the board to all employees in a particularcategory will form the part of the salary for PF purposes. Till now theemployers have been calculating provident fund contribution on thebasic salary only. However, this ruling has not dealt with the ProvidentFund Scheme applicable to the domestic workers.

Another matter which a cause for concern is that if the ProvidentFund contributions are payable for the past, then the employers will haveto deposit it using the employees' Universal Account Number and EPFAccount Number. But then who will bear the cost for past compliance andwho will handle the problems related to the same? These are again thepoints, for which the clarifications can be issued only by the Ministry.

The uncertainty that wasfaced by the employers wasaccentuated by the fact that theEPFO had come with a circulardated 30.11.2012, which inter aliamentioned the term Basic Wagesthat would include allowances forcontribution. The said circularwas kept in abeyance videcircular dated 18.12.2012.Therefore, for the last more than6 years, the industry hascontributed PF on basic pay andDA only without consideringallowances. This cannot andshould not be treated as a non-compliance.

The implication now is thatthe industry will be called uponto pay the contribution toProvident Fund on a higherquantum of wages includingallowances. The employee alsohas to pay a higher amount sincehe/she is required to contributean equal share to the fund. Thiswill deplete the take-home pay ofthe employee. Considering (a)that this is a matter ofinterpretation of the law, and (b)the large financial implicationswould adversely impact thefinancial performance of theindustry it would be prudent totake measures so that industry isnot penalized for past periods(prior to the judgment) when theinterpretation was not clear. If itis not done, then it would be ahuge stumbling block in theavowed aim of the government ofhelping Ease of Doing Business(EODB). Therefore, it would beprudent for the Government ofIndia to take measures to ensurethat the Judgment is onlyimplemented prospectively, andthe PF contributions already

The ruling has certainly clarified

that the allowances (a) which are

variable in nature, (b) linked to an

incentive for production resulting

in greater output by an employee,

or (c) which are not paid across

the board to all employees in a

particular category will form the

part of the salary for PF purposes.


S.C. PF JUDGMENT : MUCH CONFUSION,LESS CLARITY

made prior to this ruling are notcalled into question.

Periodical inspections of theestablishments have been madeby the Enforcement Officers andthe objection if any have beenremoved. In some cases thedisputed amount has beendetermined and decided and incase the employer has to pay, thepayment have been deposited.Even then such employers willnot have escape from the arrearsas payable for the past periodpertaining to certain allowances.

The litigation on the issue hastravelled to various courts of lawand finally to Supreme Court formore than 10 years, thus infusinguncertainty in computing theliability for the employers, whohave not provided for the same, intheir books of accounts is notconducive for the healthydevelopment of the industriesand other establishments. In thepast, different High Courts haveheld different views, which addedto a higher degree of uncertainty,with respect to the position oflaw, on the matter. Theretrospective implementationwill also bring forth additionalfinancial liability to the tune ofmore than 37% per year (interestplus penalty under the PF Act),by way of interest and damagesto the employer, for no fault ontheirs. This additional liabilitywill push up the employees' coststeeply, thus affecting thecompetitiveness of the industry.

The EPF Act is a common lawin the country, the prospectiveimplementation will ensure

uniformity across the country withoutarbitrariness in claiming additionalcontribution, from the employers and theemployees. Global competitiveness provided anopportunity for the employer and employee tochoose their compensation structure, based onthe flexi-pay system. The thrust has been, inenhancing the take-home pay and providingwindows of opportunity for the employee tochoose long term investments, be it socialsecurity, insurance or asset creation etc.

The retrospective compliance will give asevere setback to the momentum created in easeof doing business with the huge financial burdenbeing imposed on the industry and also on theMSME sector. The MSME sector contributesapproximately 4% to GDP of the country. Thewages and allowances that are fixed consequentto long term agreements between representativeTrade unions and Management, wherein specific

inclusions are identified for the purpose of contribution to ProvidentFund, will be challenged leading to a plethora of litigations.

Specialized industries in the manufacturing ecosystem viz. logistics,utilities, power generation etc. contribute to the success of the primaryindustry and have a highly mobile workforce across the regions andindustries. Retrospective implementation will make the specializedindustries liable to pay the contribution, for the past period which theycannot claim from the primary industry by shear efflux of time, and onaccount of their disconnect with the primary industry. Such freshliability will lead to the closure of the specialized industries.

Explaining the verdict, the court said 'No material has been placedby the establishments to demonstrate that the allowances in question(special allowance) being paid to its employees were either variable orwere linked to any incentive for production resulting in greater outputby an employee and that the allowances in question were not paid acrossthe board to all employees in a particular category or were being paidespecially to those who avail of the opportunity’. The top courtjudgment is unlikely to impact those with basic salary and specialallowances above Rs.15,000 a month. An employee contributes 12% ofhis basic salary to EPF along with a matching contribution(8.33%+3.67%) from his employer. As per section 2(b) of PF act, basicwage refers to all emoluments given to an employee excluding thefollowing :

1. Dearness allowance, house rent allowance, overtime, bonus,commission on business sourcing or any other allowance.

2. Cash value of food coupon.

3. Any present made by the establishment.

Here what the Court has done is that it has directed for the inclusionof even the special allowance as a part of basic pay and it has createdmore confusion than clarity. The EPFO must come with some practicaland viable solution instead of accumulating money for unidentifiedworkers. It is also relevant to state here that the contribution towardsemployer-employee contribution is on much higher side and needs to bereduced 8.33%. The ESI is also reducing both the shares ofcontributions i.e. employer and employees. It would reduce the burdenupon the employers and employees. The low paid employees are leastconcerned as to what they will get at the fag and their career. This ispossible since the EPFO is over flowing money at its disposal. This willalso reduce the delayed payment of deposit of contributions by theemployers.

As long as the above judgment continues to prevail, the employershave to realign their wages structure by introducing variable incentivesand commissions to be earned by the low paid employees in order toexclude the payment of provident fund contributions. BM


What is sham contract whileengaging contract labour?

A combination of factors based on facts and merit of the case will determine whether

there is an existence of employer and employee relationship between the contractor

employees and principal employer. If such relationship is established the contract will be

deemed as sham by the industrial adjudicator and the principal employer will be directed to

regularize the service of the Contractor workers.

The Blacks' LawDictionary, (7th Edn)defines 'sham' as (i)

Something that is not what itseems; a counterfeit; (ii) A personwho pretends to be somethingthat he or she is not; a faker. TheLaw Lexicon Dictionary (secondEdition, 2001) defines 'sham' asgood in appearance but false infacts.

Now the question that arisesin the context of the ContractLabour (regulation and abolition)Act 1970 (hereinafter referred toas CLRA Act) as to what is a shamContract and what is theimplications of such shamcontract? In this context it may beappropriate to refer the case of

Gujarat Electricity Board, Ukai, Gujarat V. Hind Mazdoor sabha (1995(2) LLJ 790 (SC) whereby the apex Court inter alia has observed "that theauthority to abolish the contract labour under Section 10 of the Act comesinto play only where there exists a genuine contract. In other words, ifthere is no genuine contract and the so called contract is sham or acamouflage to hide the reality, the said provisions are inapplicable. When,in such circumstances, the concerned workmen raise an industrial disputefor relief that they should be deemed to be the employees of the principalemployer, the Court or the industrial adjudicator will have jurisdiction toentertain the dispute and grant the necessary relief." Here the contractwhich the apex court was referring is the contract between thecontractor and the principal employer. The constitutional bench of theapex court endorsed this view in Steel Authority of India vs NationalUnion Water Front Workers Union (2001(91) FLR 182 (SC)= 2001 LLR 691(SC)). In this judgment while addressing the issue of automaticabsorption the court also ruled that if the contract is found to be notgenuine but mere camouflage, the so called contract labour will have tobe treated as employee of the principal employer who shall be directedby the industrial adjudicator to regularize the services of the contractlabour in the concerned establishment subject to the conditions as maybe specified. The two major ratio decidendi of the SAIL judgment can beenumerated as follows :

(1) Automatic absorption is no more the sine qua non on notificationprohibiting the engagement of contract labour being issued by theappropriate government under section 10 (1) of the CLRA Act.

(2) If it is proved before the industrial adjudicator that the contractoris interposed and its engagement is camouflage to deprive the variousbeneficial statutory rights to the workers, in such event the contractbetween the contractor and principal employer will be deemed to be asham contract. In the event of contract being deemed to be sham, theindustrial adjudicator will pass order directing the principal employerto regularize the service of the contractor workers.

It is needless to say that for any notification for prohibition has bemade only by the appropriate government under section 10 (1) of theCLRA Act. To prove the existence or non existence of a sham contract it

Deepanjan Dey, DGM-HR, Dalmia Cement (Bharat) Ltd., Rajganjpur (Odisha)


WHAT IS SHAM CONTRACT WHILE ENGAGING CONTRACT LABOUR?

is the domain of the industrial adjudicator and therefore, industrialdispute has to be raised under the provisions of Industrial dispute Act1947.

Factors determining Sham Contract :

In the case between M/s. Bharat Coking Coal Limited Vs Theirworkmen represented by the Secretary, Bihar Colliery Kamgar Union,(2014 LLR 64) the learned Tribunal had held that in absence of theregistration and the license, the arrangement made by the managementto execute the work through a contractor is a sham and camouflage.Disagreeing with such findings of the Tribunal the Jharkhand HighCourt was of the opinion that failure to comply the provisions ofSections 7 (registration of establishment) and 12 (Licensing ofcontractors) of the CLRA Act does not lead to inescapable conclusionthat the workmen concerned are to be regularized under the services ofthe management for violation of the said provisions. There are otherpenal consequences which arise for such violation. The provisionspertaining to aforesaid sections of the CLRA Act are no more a res-integra. Hence, in this context the Jharkhand High Court relied uponDeena Nath v National Fertilizers Ltd (1992 (64) FLR 39= 1992 (II) LLJ 46SC), R.K. Panda V Steel Authority of India (1994 (69) FLR 256 (SC) = 1994(2) LLN 378 (SC)) and Steel Authority of India vs National Union WaterFront Workers Union (supra) wherein the Supreme Court has time andagain reiterated that non compliance to section 7 and 12 of the CLRAAct will not lead to absorption or the arrangement between thecontractor or principal employer will be treated as sham. Noncompliance for such provision will lead to other penal consequences asenshrined in the CLRA Act.

For a sham Contract to be proved before the industrial adjudicatorthe relationship of employer and employee has to be established. In thisconnection it may be appropriate to refer to the Supreme Courtjudgment Ram Singh and others V Union Territory, Chandigarh andothers 2004 (1) CLR 81 (SC)= 2004 Lab.IC 50 (SC) which has succinctlydealt with two factors namely the 'Control test' and 'integration test' fordetermining the relationship of employer and employee. The relevantportion of the judgment is set out herein in verbatim for betterappreciation and inter- alia reads as follows :

"In determining the relationship of employer and employee, no doubt'control' is one of the important tests but is not to be taken as the sole test.In determining the relationship of employer and employee all otherrelevant facts and circumstances are required to be considered includingthe terms and conditions of the contract. It is necessary to take a multiplepragmatic approach weighing up all the factors for and against anemployment instead of going by the sole 'test of control'. An integratedapproach is needed. 'Integration' test is one of the relevant tests. It isapplied by examining whether the person was fully integrated into theemployer's concern or remained apart from and independent of it. Theother factors which may be relevant are - who has the power to select anddismiss, to pay remuneration, deduct insurance contributions, organisethe work, supply tools and materials and what are the 'mutualobligations' between them (see Industrial Law _x0016_Third edition byI.T. Smith and JC Wood _x0016_ at pages 8 to 10).

Normally, the relationship of employer and employee does not existbetween an employer and contractor and servant of an independentcontractor. Where, however, an employer retains or assumes control overthe means and method by which the work of a contractor is to be done itmay be said that the relationship between employer and the employeeexists between him and the servants of such a contractor. In such asituation the mere fact of formal employment by an independentcontractor will not relieve the master of liability where the servant is, infact, in his employment. In that event, it may be held that an independentcontractor is created or is operating as a subterfuge and the employee willbe regarded as the servant of the principal employer. Where a particularrelationship between employer and employee is genuine or a camouflagethrough the mode of contractor is essentially a question of fact to bedetermined on the basis of features of relationship, the written terms ofemployment, if any, and the actual nature of the employment. The actual

nature of relationship concerninga particular employment beingessentially a question of fact, ithas to be raised and proved beforean industrial adjudicator.Conclusion Nos. 5 & 6 of theConstitution Bench decision ofthis Court in Steel Authority ofIndia (supra) are decisive forpurposes of this case."

The issue of `control andsupervision' was also addressedin General Manager (OSD),Bengal Nagpur Cotton Mills,Rajnandgaon vs. Bharat Lal &Anr. ( 2011 I CLR 1 (S.C.)) whereinSupreme court was of the viewthat in determining relationshipbetween principal employer andcontract labour, two determiningfactors are to be seen who paysthe salary to the contractorlabour and who has the controland supervision on the work ofsuch employee. It is for thecontract labour to prove that hewas directly employed by theprincipal employer and not thecontractor. Further, the court wasof the opinion that to get relief ofreinstatement against principalemployer, contract worker has toprove that he was directly paid byprincipal employer and notcontractor. In the context ofsupervision and control theCourt referred to the its judgmentin International AirportAuthority of India v.International Air Cargo WorkersUnion (2009 (13) SCC 374= 2009LLR 923 (SC)). In this instant casethe Supreme Court has held thatmerely because the contractlabour work is under thesupervision of the officers of theprincipal employer, it cannot betaken as evidence of directemployment under the principalemployer. The relevantobservation of the Court inInternational Airport Authority ofIndia case is set out here underfor better appreciation whichreads as follows :

"If the contract is for supply oflabour, necessarily, the laboursupplied by the contractor willwork under the directions,supervision and control of theprincipal employer but that wouldnot make the worker a directemployee of the principalemployer, if the salary is paid bycontractor, if the right to regulateemployment is with the contractor,and the ultimate supervision and


WHAT IS SHAM CONTRACT WHILE ENGAGING CONTRACT LABOUR?

control lies with the contractor.

The principal employer onlycontrols and directs the work to bedone by a contract labour, whensuch labour isassigned/allotted/sent to him. Butit is the contractor as employer,who chooses whether the worker isto be assigned/allotted to theprincipal employer or usedotherwise. In short, worker beingthe employee of the contractor, theultimate supervision and controllies with the contractor as hedecides where the employee willwork and how long he will workand subject to what conditions.Only when the contractorassigns/sends the worker to workunder the principal employer, theworker works under thesupervision and control of theprincipal employer but that issecondary control. The primarycontrol is with the contractor."

From the above discussion wefind that apart from 'control test'or 'organization test' severalother factors such as who is theappointing authority; (b) who isthe pay master; (c) who candismiss; (d) how long alternativeservice lasts; (e) the extent ofcontrol and supervision; (f) thenature of the job, e.g. whether, itis professional or skilled work; (g)nature of establishment; (h) theright to reject; determine therelationship of an employer andemployee in the dispute of shamcontract. (refer Workmen ofNilgiri co-operative MarketingSociety Ltd. Vs. State of TamilNadu and others (2004 (2) LLJ 253(SC) = 2004(101) FLR 138 (SC)=2004 (2) LLN 68 (SC)= 2004 LLR351(SC)).

Hence, we find that acombination of factors based onfacts and merit of the case willdetermine whether there is anexistence of employer andemployee relationship betweenthe contractor employees andprincipal employer. If suchrelationship is established thecontract between the principalemployer and contractor will bedeemed as sham by the industrialadjudicator and the principalemployer will be directed toregularize the service of theContractor workers.

From our above discussionthe following can besummarized :

1. Non compliance with section 7 and 12 of the CLRA act will not leadto sham contract. Violation of these provisions will only lead topenal consequences.

2. 'Control' is one of the important tests but is not to be taken as the soletest in determining the relationship of employer and employee.

3. 'Integration' test is one of the relevant tests. It helps in determiningwhether the person was fully integrated into the employer's concernor is independent of it.

4. The other factors which may be relevant are who has the power toselect and dismiss, to pay remuneration, deduct insurancecontributions, organise the work, supply tools and materials andwhat are the 'mutual obligations' between them.

5. Mere supervision of the contract labour work by the officers of theprincipal employer cannot be the sole determinative factor to provea contract to be sham.

Importance of agreement :

It is needless to say that in any dispute of sham contract the contractbetween the contractor and principal employer will have a hugeevidentiary value. The industrial adjudicator will obviously scrutinizeand rely upon this document and hence it need to be properly crafted.Generalities should be avoided and the agreement between theprincipal employer and contractor should be very specific be it in termsof the job to be performed and/or any obligations of the party.Therefore essentials of this kind of agreement in brief can beenumerated as follows :

I. Define the scope of the agreement, that is, to whom it applies.

II. Define the time frame/duration of the agreement.

III. Write down clearly what has been agreed.

IV. Specify the conditions, if any, for making the agreementoperational and the consequences of non-compliance toobligations of both the parties as a result of the agreement.

V. The agreement must disclose the place of work, time of working,rate of compensation (towards consideration) and consequencesarising out of breach of contract and procedure termination byeither of parties to the agreement.

VI. The agreement must disclose the scope of work, deployment ofmanpower in number, period of validity, compensation, securitydeposit and terms of payment of bills.

VII. The agreement must carry out the objectives of statutoryprovisions and judicial pronouncements.

VIII. Lay down the procedure for dealing with problems ofinterpretation and implementation.

IX. The agreement should be between the contractor and the principalemployer and should be witnessed by two witnesses.

Additional precautions by principal employer :

I. The agreement should be drafted and executed on non-judicial stamppaper.

II. The Contractor should submit the printed bills and signs under therubber stamp.

III That the Contractor's main records should be maintained throughhis staff and not by be the staff of principal employer.

IV. That the Contractor's Labour does only the specific work agreed bythe Contractor.

V. That the contractor issues the photo identity card to his workerunder his name, trading style and signature.

VI.That the contractor is not a cloak for suppressing the facts and thecontractor is not treated as commission agent.

(Note: Essentials of agreement & Additional precautions by principalemployer reference taken from the article 'Avoid making Sham Contract'LLR March 2018, P 66-67.) BM


CASE STUDY

Pawan Putra electrical Ltd. is aconglomerate having multi-locationmanufacturing units engaged in

manufacturing of heavy electrical equipments.The group is considered market leader in itsproducts in terms of market share and quality.The company has an army of qualifiedprofessional managers in all verticals. Going wellon all fronts, Co. top management decided toreview its HR policies in terms on workerswelfare, health and safety working in plantsbecause for penetrating in overseas markets,these factors play an important role. Clearing thebuyer's audit and obtaining excellent score is acondition precedent. Co. was well aware of itspeople practices developed over period of time.

Due to its nature of work and workers' profile,who are mostly migrants from different states, awork culture of 12 hours shift working wasdeveloped and well accepted by workers too.Initially when this system of 12 hours workingwas introduced, it was because of prevailingindustry practice and acute shortage of skilledmanpower. Workers who came from differentstates in search of jobs preferred in earning moreinstead of sitting at their rooms idle after 8 hourswork. They wanted to consume more time towork. In this work practice, though notcompliant with regulations applied on theindustry, the issue never came up on surfacebecause both Co. management and workershappily agreed to such work practice. There wasno element of compulsion from managementeither. Since in early times, there was anenvironment of workers aggression andunionisation, this work practice was alsodeemed as strategically appropriate because ofemployment of less numbers of workers andleaving no idle time for them after 8 hours workto socially mobilise and develop network withworkers of other industries.

All manufacturing facilities of the group havealso developed a work culture of mutual trustand respect among management and workers.There are no unions. All issues are resolvedmutually because of having a transparent,robust grievance redressal system in place. Co.adopted a policy of granting wages increaseafter every three years and a formal wageagreement is signed with all workers. Theengagement level of workers is satisfactory and

no major dissatisfaction ever surfaced amongworkers. HR heads of all units under theguidance of Corporate HR head, proactiveattitude was adopted and there has always beenmuch stress on preventive mechanism ratherthan curative therapy in terms of people issues.The wage increase has always been at par withmarket and industry standards. The feedback ofworkers after wages increase has been abovesatisfaction every time. The comments reportedby workers were like "workers look for moneyneeded to meet their family requirements anddignity at workplace, both have been well takencare of by management so no complaint."

At present average worker salary is around40k for 12 hours shift working.

With change in board as young directorswere inducted, the though process of the Co.management board directors also indicatedtowards change and the issue was surfaced as towhy Co. has this work practice of 12 hours shiftworking, which is neither in accordance withprevailing regulations nor good to workershealth and welfare. Their view was that suchworking may cause accident at work becauseworker may feel tired after 8 hours and not givefull productivity because of low level of energyin human body. Board communicated their viewto corporate HR head and asked to present theaction plan as to how early all facilities stop the12 hours working and switch over to normal 8hour working without any disturbance.

Corporate HR head wrote a detailed mail toall facilities operations head and HR headscommunicating the Boards intention and askedthem to present their case of possibleadvantages and disadvantages, difficulties andlong term problems, that may come up andways to address all. He also asked them toprovide step by step process to switch over from12 hours to 8 hours working.

The common advantages and disadvantagesmentioned by Plant HR heads were :

Advantages - Efficiency may increase in Bshift by around 7.5%, improved supervision, lessfatigue, fewer chances of accidents, lessabsenteeism, health issues of workers to bereduced, extension of overtime possible duringabsenteeism and full compliance of regulations.

Disadvantages - decreased wages will

escalate dissatisfaction, may resort to engineerfabricated situations where OT becomescompulsion by wilful rotational absence ofworkers, At present no transport facilityprovided to workers. In three shift system, worksmay demand transport facility in nightshift, andthen slowly for all shift thereby increasingfinancial and administrative costs. Around 35%skilled extra manpower would be requiredimmediately, which may increase salary level ofnew entrants because it will be driven by marketdemand and supply and ultimately existingemployees will also have to be brought on at parin respect of salary structure, IR issues may comeup in near future as workers will get enoughtime after 8 hours working to get workersmobilise and raise the collective concernbecause their sole objective would to get thesame wages of 12 hours in 8 hour working.Financial liability in terms of leave, bonus,gratuity in respect of extra manpower wouldincrease and cumulative loss of time during shiftchange will increase from one time to two times.

The common fear of all Plant HR heads wasthat this change over may open gates ofpossible IR issues in near future and the systemshould not be changed unless the voice comesfrom workers because when informal feedbackwas taken from few workers their response wasnot very positive and commented that dowhatever, you want but don't reduce our wages.While conducting a survey on the point by theplant HR heads in their areas, it was revealed thatalmost in all such industries, work practice of 12hours working was still prevalent andproduction was going smoothly in spite ofhaving unions in some industries.

Corporate HR head has all in his plate topresent the case before the board.

Questions for discussion :1. In your view, what should Co. management

prefer in such circumstances-compliance orpeople acceptance with present practices?

2. Do you think that apprehensions of Plant HRheads are well founded or is mere a disguiseto resist for change?

3. How Corporate HR head should proceednow to bring change and address thepossible disturbances?

Compliance or Comfort?

-BM Editorial Team

BM


CASE ANALYSIS - I

1- Being a bellwether in themanufacturing of heavy electricalequipments with respect to marketshare and quality, it is advised thatcompany management should preferCompliance rather than peopleacceptance with present practices.

As after adoption of legalrequirement of 08 Hours working willnot only enable the company tocomply with the chapter VI & Section59 of Factory Act subject to 48 Hours,overtime in any week but alsoclearing Buyer's audit more easily.

2- The apprehension of Plant HRheads are well founded because whatworkers are earning at present Rs.40K for 12 hours will definitely reducetheir earning against 08 hours workby 32% approximately around Rs.27,000/-. And reduction in earnedwages will lead to difficulties to runor meeting family's requirementwhich may become the cause of IRIssues. Furthermore, the work cultureof mutual trust and respect amongmanagement which was alreadyestablished in company may distortand collapse which may also lead theworkers after 8 hours work to sociallymobilize and developing network withexternal agencies/workers of otherindustries. In long term it may bedetrimental to the organisationinterest as well as of workers.

3- After introduction of 08 hoursworking policy, the management hasto encounter two disturbances. Firston the part of workers and second atthe level of labour Authorities. On the

worker's part, it will be non-fulfilmentof basic needs and difficulties torun/meet family requirements withlesser salary proportionate to 08hours working and on the other handit will be on compliance part i.e. (a)non adherence of working hours asper statute & conditions of StandingOrder. (b) Three years formal wageagreement between workers &management on 12 Hours Basis whichwill be considered as void by theAuthority. The possible way ofintroducing 08 Hours working culturemay be by restructuring the wagestructure withoutdistorting/damaging family budgeti.e. take home salary. Though suchpractice of restructuring of theprevailing wages at 08 hours workingwill surely be accepted by theemployees but it will put a heavyburden on company with respect toCTC and new recruitments etc.Because of this complexity, themanagement may not like to do it inthis way rather prefer for reduction ofwages.

Another aspect which may beadopted by Corporate HR Head is tohold the decision for the time beingtill the arrival of next revision ofwage agreement. Because themanagement will have a sufficienttime to take the employees inconfidence by endorsing thisresponsibility to Plant HR. As the 12Hours system is already in vogue andintroduction of new system of 8 hourswill definitely become a topic ofdiscussion among employees and

management during this gap canexpect some good ideas fromemployees themselves. During thisgap period, the management can alsoarrange trainings/motivationprograms having context with aspectimpact of prolong working, health,safety, productivity etc.Simultaneously the management notonly have to counsel workers and letthem in their confidence but also to beadvised to prepare data/trendanalysis on various aspects ofproductivity, Company loss, burden,market potential etc. Besides above,the management has also to emphasison strengthening its contract workersor fixed term employees who may beassets for the company during anyunforeseen situations. Therefore, atthis transition phase the CorporateHR Head must rely on Plant HR whocan introduce 08 hours workingculture in phased mannerpragmatically through IR Strategiesas per situations. In the mean while,the company may have to go forinjunction to avoid any loss ofcompany's property. Later on whenthe favourable condition arrives ofworker's confidence, the managementcan go for further wage settlementeither bi-partite or tri-partite.

At the end Company has to moveon to compliance and for that HRshould start working as early aspossible by creating favourablecircumstances for the complianceculture. Old habits die hard but somehave to meet the fate.

Paramjeet SinghHead-HR, Ultimate Flexipack Ltd., Haridwar

It should be done in phased manner

BM

1- Every ethical managementadheres to right business practicesand do the proper statutorycompliances no matter how difficultor expensive the cost of compliancemight be. Since company is lookingfor oversees market, the workingconditions, workers' welfare, healthand safety play an important role aspeople centric approach like abovewould help clear the buyer's auditsenabling the company to obtainexcellent score which is a conditionprecedent for penetrating in overseesmarket. In view of above,expectations & concerns of the youngdirectors in board are judicious andnot wrong at all.

2- I think, apprehensions of PlantHR are not unfounded and there aresome elements of genuineness intheir concern as far as plant IRconditions are concerned. Adherenceto statutory compliances i.e. 8 hoursof working will immediately resultinto reduction of wages of workmenby 33% which definitely will causehardships to the workmen leading todissatisfaction among the workmen,who are mostly migrants from otherstates, and higher possibility of IRproblems also in near future. On theother hand, this exercise will resultinto increased expenses like Overtimepayment at the rate double the normalrate of payment within statutorylimit, higher cost of recruitment forapproximately 35% of extra skilledmanpower, leave with wages, gratuity,more supervisory staff forsupervision of extra 35% manpoweretc.

3- Firstly, Corporate HR should askPlant HR Heads to speak with some oftheir senior and sensible workers(opinion makers) and tell them aboutthe benefits of having 8 hoursworking such as, less fatigue, lessabsenteeism, lesser chances ofaccidents, better quality, betterhealth, better work life balance andopportunity for the company toacquire oversees business whichwould eventually result into overallgrowth of the company. Besides, theyshould also be sensitised about therisk to the management of violationof applicable statutes. However whiledoing so, management should assurethem that workers' interest would betaken care of in a manner that theirhardships would be minimal. Tomitigate the financial hardships,Management can start givingovertime as per the provisions of theFactories Act (OT limited to 50 hoursin a quarter). This will bridge somegaps between what a workman used toget while working for 12 hours andwhat he would get while working for 8hours.

Secondly, Corporate HR shouldintroduce a 'Productivity LinkedIncentive Scheme' in order tomotivate workers to produce more inorder to earn more. As workers wouldwork for 8 hours only and will haveless fatigue, their efficiency willincrease. It will prove to be a goodmotivator as the incentives earned bythe workmen would be good enough.The increased productivity wouldensure no new recruitment of the

workmen as enhanced productivitywould take care of required output.

Thirdly, as there will be increasedefficiency and increased output whichwill eliminate the possibility of nonew recruitment, corporate HR mayintroduce a 'New Trainee Scheme' andrecruit a few low cost trainees, if it isrequired at all.

Fourthly, Corporate HR shouldassure the workmen that afteracquiring oversees business, thecompany management will take careof whatever little financial gap is nowleft, after introduction of'Productivity Linked IncentiveScheme' and OT payment in the next'Long Term Settlement'. This will helpworkers understand the good intent ofthe management & feel assured thatmanagement is genuinely interestedin resolving their financial problems.

Lastly, all HR Heads shouldcontinue to persist with the workculture of mutual trust and goodwilland proactive attitude with more andmore focus on preventive mechanismrather than curative therapy.Employees' Engagement Programslike family picnics, games & sports,festival celebrations etc. should beintroduced in order to keep theworkmen engaged and motivated.Besides, Plant HR Heads should keepa close watch on the activities of theworkmen and be sensitive towardspeople issues while strengthening'Grievance Redressal Mechanism'more.


CASE ANALYSIS - II

BM

Rakesh SrivastavGM - HR & IR, JK Tyre & Industries Ltd., Kankroli,Dist. - Rajsamand

Build consensus before moving to newpattern


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EVENT REPORT

“Your mind transcends limitations, unleash your infiniteself ” said Mr. Pravin Rajpal Founder and CEOInnovatioNext and World Innovation Network (WIN) Pvt.

Ltd in the Keynote address of the 2nd International HR Conferenceat IBS Mumbai.

IBS Mumbai hosted its 2nd International HR Conference on18th April 2019 at its campus in the Shri N.J. Yasaswy MemorialAuditorium in Hiranandani Knowledge Park, Powai on “EmployeeEngagement – DNA for Organisational Transformance : Pavingthe path to the next level”, under the visionary leadership of Prof.Y.K. Bhushan, Senior Advisor and Campus Head of IBS Mumbai.In his welcome address Prof. Bhushan mentioned the need to bringtogether HR practitioners and Academicians to deliberate on theresponsibility of HR in playing a strategic role in businessprocesses. He congratulated Dr. Rita Rangnekar, the ConferenceConvenor on galvanizing the efforts of the HR Faculty to plan andexecute the HR Conference.

The Compendium of Conference proceedings and researchpapers was released by Prof. Y.K. Bhushan, Mr. Pravin Rajpal andthe organizing team.

A Panel discussion on “Critical Issues and Challenges inEmployee Engagement” had senior HR practitioners such as Ms.Jayashree Chaudhry Chief Talent Officer Ketchum Sampark, MsSonal Raj Senior GM HR Indofil Industries and Ms Keyuri SinghExecutive VP HR Infogain with Dr. Rita Rangnekar as theModerator, discussing the challenges arising from implementingemployee engagement strategies, role of spirituality andEmployee wellness programs in fostering engagement at the workplace, & digital engagement techniques to help the non-digitaland digitally savvy workforce. The intellectually stimulating discussion also had some lighter moments.

The Research papers were presented in four parallel tracks:Aadhi, Aadhila, Aadhunik and Aadved which denoted WorkCulture, HR Strategy and Subsystems, Measurement andQuantification of Employee Engagement and Human and SoftFacets of Employee Engagement respectively. The tracks werechaired by veteran academicians and practitioners like Dr. ArunaDeshpande, Dr. Sanskruti Kadam, Dr. C. Babu, Mr. TanmayaPanda, Ms Richa Ramola, Mr. Milind Rane, Mr. Vishant Janawadeand Ms Keyuri Singh. Authors from different parts of the worldsuch as Chicago, Beijing, Doon Business School, presented theirresearch on various facets of Employee Engagement.

Mr. Ajith Nair, Director Culture and Engagement Consulting atAON Consulting, delivered the valedictory address followed by themuch awaited prize distribution ceremony. The prizes were givenin three categories viz. International, Academic and Student categories.

The HR Conference was supported by AMDISA and sponsoredby Indian Oil Corporation and Kitab Khana (conference partners),Business Manager (Media Partners). The vote of thanks was proposed by Prof. Silpy Gupta.

Report by: Prof. Juhi Ranjan, Faculty OB & HR, IBS Mumbai

ICFAI Business School Mumbai hosts 2nd International HR Conference

“Employee Engagement – DNA for Organisational Transformance:Paving The Path To The Next Level”

Prof. Y.K. Bhushan, Campus Head-IBS inaugurating the conference by lightingthe lamp along with Dr. Rita Rangnekar

Dr. Rita Rangnekar, Prof. Y.K. Bhushan and Pravin Rajpal in session

Prof. Y. K. Bhushan, Pravin Rajpal and others releasing the Compendium of Conference Proceedings

BM


HR NEWS

What went wrong with Jet Airways?

India's Jet Airways grounded all of its flights on 17th April2019, leaving the future of around 20,000 staff uncertain afterlenders failed to release emergency funds to keep the debt-saddled carrier flying.

As a consortium of lenders seeks to find a buyer to get thebeleaguered airline back into the skies, AFP takes a look atwhere it all went wrong for Jet.

Many aviation experts believe the start of Jet's financialtroubles can be traced back to the 2006 purchase of Air Saharafor $500 million in cash.

Founder Naresh Goyal reportedly ignored the advice ofprofessional associates who said he was paying too much.Market reaction to the deal was also decidedly mixed.

The budget carrier was rebranded "JetLite" but it haemor-rhaged money and in 2015, Jet wrote off its entire investment.

Experts said the people running Jet failed to take the trioseriously when they were founded between 2005 and 2006,offering cut-price fares and previously unserved routes.

"They were essentially assumed to be fringe players by theJet management," industry analyst Amrit Pandurangi toldAFP. "Jet always catered to corporates and failed to recognisethat low-cost carriers were attracting customers who wereprice sensitive," he added.

Experts put a lot of the blame on Goyal's management style.

They say his decision to have a single management team,headed by himself, running all Jet's operations was a crucialmistake.

Analysts say he should have had one team running thefull-service carrier and another running the budget flyer.

"Jet lacked a concrete business model and fiddled with itoften, which confused investors, (and) passengers alike,"experts opinion, who believes the company's decisions lackedtransparency.

Goyal has also been accused of making bad investmentsand failing to address the company's deteriorating financialpredicament while borrowing heavily.

"Simply put, they spent more than they earned and keptaccruing debts. All of India's carriers are particularly sensitive to fluctuations in global crude prices because theAsian giant is a major importer of oil.

When the rupee is weak, which it has often been over thepast year or so, fuel - the biggest cost burden for airlines -becomes more expensive.

Soaring oil costs and the Indian rupee hitting record lowslast year affected all Indian carriers.

IndiGo and SpiceJet reported massive losses but analystssay their books were resilient enough to weather the quarterly losses. Jet's, however, were saddled with debts.

"Jet Airways failed to manage its balance sheets and wascaught out by these cyclical changes in the industry.

Aviation analysts say Goyal's failure to find a strategicinvestor to pump money into Jet extended the airline's losses,contributing to the financial predicament it finds itself intoday.

Talks at the end of last year with tea-to-steel conglomerateTata failed to go anywhere, while Etihad Airways reportedlyrefused to increase its stake because Goyal was at the helm.

The 69-year-old was forced to give up control of Jet lastmonth as part of a debt resolution deal that saw a consortiumof lenders led by the State Bank of India take over the airline.

Source: ET

Factory manger and CEO imprisoned for not maintaining

ambulance room

A local court in Jalandhar sentenced vice-chairman-cum-CEO of Hawkins Cookers Limited and his Hoshiarpur factorymanager to six-month imprisonment for not maintaining anambulance room on the factory premises.

The court of chief judicial magistrate also imposed a fineof Rs 25,000 each on the CEO Subhadip Dutta Choudhury andmanager Sandeep Singh Toor.

The court found both guilty for violating the provisions ofSection 45 of the Factories Act, 1948, and Rule 70 of the PunjabFactories Rules, 1952. They also committed the offence pun-ishable under Section 92/94 of the Factories Act, 1948, for com-promising the safety of the workers, observed the court, on acomplaint of factories deptt.

The orders read that in spite of having more than 500 work-ers (ordinarily employed), the company has not provided andmaintained an ambulance room of prescribed size on theirpremises and prescribed equipment along with medical andnursing staff in violation of the Factories Act.

Source:HT

Surat diamond industry gets activelabour union

Diamantaires in the world's largest diamond cutting andpolishing centre in Surat (Gujarat) are apprehensive becausethey know a labour union is going to become a reality in theindustry soon.

Diamond Workers' Union (DWU), registered with labourdepartment in Gujarat, has begun to enroll diamond workersas members in a five-month long drive that began here on 5thApril, 2019.

DWU president Ranmal Jilariya told, "Since its inception,diamond industry in Gujarat does not have a labour union toaddress the issues of workers. Though our union was regis-tered in 2013, it became active in the last one year following themulti-crore bank loan scam and job losses in the industry. Theunion will be the voice of diamond workers facing problemsrelated to their jobs in the industry. In the last one-and-a-halfyear, the industry has witnessed job losses, heavy reduction indiamond production, issues of labour laws, wage cuts etc"

Diamond industry analyst Aniruddha Lidbide said, "Wehave seen labour unrest in special economic zone in Mumbai.Many units had shut down due to union problems. If the onein Surat wants to protect the rights of diamond workers thenit is good, otherwise the situation will be same as inMaharashtra."

There are more than 5,000 diamond units in the cityemploying 5.5 lakh diamond workers.

An office-bearer of Surat Diamond Association (SDA) said,"The labour unions had caused immense problems for diamond and jewellery units in Maharashtra. Labour unrestcould become a reality in Surat too because of the union."

Dinesh Navadia, regional chairman of Gems and JewelleryExport Promotion Council (GJEPC), said, "The labour unionmust not try to suppress diamond unit owners in the name oflabour laws. It should help in creating a healthy work atmosphere in the diamond industry."

Source: ET


H R M O V E M E N T

Barnali Roychowdhary joinsInstamojo as VP & head HR

Barnali Roychowdhary has taken up new assignment as VP and head-HR at Instamojo, onlinepayment platform, Bengaluru. Before this, she waswith Portea as VP- HR for about 4 years.Barnali hasset up Greenfield projects for the business and led

the Human Resources function of large multination-al companies in India & abroad.

Tata Realty gets Snehal Gawandeas AVP & HR head

Moving from FMCG sector to real estate Snehal Gawande has joinedTata Realty as AVP and head - HR, shared services and compensation &

benefits. Earlier Snehal was with ABD’s India operationsfor a little over two years looking after C&B function.

Snehal has 20+ years of career includes, 14 years inHR mostly in the FMCG domain specializing inCompensation & Benefits, Performance

Management, HR Operations, HR Shared Services,HR Business Partnering.

Vikas Gupta is New CHRO ofAdda247

Adda247, India’s largest and fastest-growing educa-tion-technology company, has appointed Vikas

Gupta as its Chief People Officer (CPO). As the CPOat Adda247, Vikas will lead its HR and Admin func-tions and will look to accelerate the company’s

growth by transforming its work culture with anoverreaching view to enhance Employee Experience.

Vinita Ferrao is new talent acquisitionhead of GSK Pharma

After working with Mondelez International as tal-ent head for about 3 years Vinita Ferrao has nowjoined GSK Pharma as its talent acquisition lead,India. She was part of the Global Talent AcquisitionTeam in AMEA, leading a team of 3 direct reports,

reporting to the Mondelez AMEA Regional TA Head,based in Singapore.

Nisha Verma is New CHCO of ApparelGroup at UAE

With about 23 years of versatile experience in HR, Nisha Verma hasnow moved from Welspun Group to Apparel Group, UAE to

take on her new role as the CHRO. Her new role wouldmake her responsible for more than 10,000 employ-ees and lead HR function. In Welspun as CHRO andGlobal Head-HR, she was managing HR affairs ofabout 20,000 employees spread across US, Europe

and India.

Nirbhik Goel is New EVP-HR of OberoiGroup

After serving as Global HR Business Partner at AIGin Greater New York City area for about 3 years,

Nirbhik Goel has now joined the Oberoi Group asthe EVP-HR and will be leading the HR operationsin the company at New Delhi. An alumnus ofNarsee Monjee Institute of Management Studies

(NMIMS), Goel comes with a total experience of 28years in the HR function.

Chandrasekhar Mukherjee is New chiefpeople officer of South Indian Bank

With rich experience of about 24 years in HRChandrasekhar Mukherjee after serving SreiInfrastructure for about 2 years, has now moved toSouth Indian Bank Kerala as chief people officer.Prior to Srei Infrastructure, Mukherjee was the chief

people officer at the National Stock Exchange (NSE).Mukherjee has also worked with Times of India Group

as AVP - HR and Colgate, Cabot India and Usha India ltd.

PWC India names PadmajaAlaganandan as chief people

officerA management graduate from IIM Kolkata, PadmajaAlaganandan is the new CHRO of PWC India. Padmaja

has been associated with PWC for over 8 years. Priorto her current appointment, Padmaja was leadingTechnology sector for PWC’s Advisory Line ofService. She has spent about 17 years in consulting

business in PWC and Mercer consulting.

Sony India appoints Manu Wadhwa asChief Human Resource Officer

Sony Pictures Networks India (SPN) has appointed Manu Wadhwa asChief Human Resource Officer (CHRO) for the network. In her last assign-

ment, Manu was associated with Coca-Cola, as the Headof Human Resources – India and South West Asia.

With over two decades of experience in the humanresources function across various industries andcountries, Manu has piloted workplace and peopleagenda of globally dynamic organizations like GE

and American Express.

Anjali Chatterjee moves to AirAsia India asCHRO

With about 24 years of experience in HR, AnjaliChatterjee, after having successful and longest tenureyour of about 15 years Tata Communications as VP-HR,has now moved to AirAsia as CHRO at Bengaluru. At Tata

Communication she was based at Mumbai. After com-pleting her PG in HR management Anjali started her career

with consulting firm for about two years.

-may-19

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