Challenges in HR Department Setup
Recently, I have joined a 50-year-old chemical manufacturing company with an employee strength of 500. I have almost set up the HR department, except for the existing Payroll department. Currently, there is a Payroll Manager, and legal matters are being handled by some old staff members such as a chemist, factory manager, excise officer, senior supervisor, etc.
Starting from the organization structure, hierarchy allocation of Key Result Areas (KRA) for each department, and assigning KRAs to individual employees have been completed.
The old employees, designated as chemists, shift supervisors, etc., have been given tasks outside their respective departments due to a lack of clarity. They have been managing somehow until now, but not efficiently. This inefficiency has led the management to desire a stronger HR department. The issue now is that they feel insecure working outside their designated areas. The main reason is their high salary, despite lacking qualifications and the necessary skills. They are taking on additional responsibilities to show their value, leading to a feeling of insecurity.
Currently, they have formed a lobby led by 4-5 seniors from different functional departments to pursue their common interests and make themselves dependent on management. Some retired individuals are retained as consultants due to a lack of successors or alternatives, posing a major challenge in terms of technical training, needs analysis, and legal matters.
I seek advice on how to control or avoid these issues to achieve excellence in my department.
Thank you.
From India, Ahmedabad
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Recently, I have joined a 50-year-old chemical manufacturing company with an employee strength of 500. I have almost set up the HR department, except for the existing Payroll department. Currently, there is a Payroll Manager, and legal matters are being handled by some old staff members such as a chemist, factory manager, excise officer, senior supervisor, etc.
Starting from the organization structure, hierarchy allocation of Key Result Areas (KRA) for each department, and assigning KRAs to individual employees have been completed.
The old employees, designated as chemists, shift supervisors, etc., have been given tasks outside their respective departments due to a lack of clarity. They have been managing somehow until now, but not efficiently. This inefficiency has led the management to desire a stronger HR department. The issue now is that they feel insecure working outside their designated areas. The main reason is their high salary, despite lacking qualifications and the necessary skills. They are taking on additional responsibilities to show their value, leading to a feeling of insecurity.
Currently, they have formed a lobby led by 4-5 seniors from different functional departments to pursue their common interests and make themselves dependent on management. Some retired individuals are retained as consultants due to a lack of successors or alternatives, posing a major challenge in terms of technical training, needs analysis, and legal matters.
I seek advice on how to control or avoid these issues to achieve excellence in my department.
Thank you.
From India, Ahmedabad
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I think that you have been appointed as an HR Manager exclusively, and you have received the green signal from the top management to establish a robust HR Department. Therefore, it is imperative for you to inform the top management about the practical difficulties arising from the current set-up and to submit a proposal regarding line and staff functions.
From India, Salem
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6108From India, Salem
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When an organization operates without a proper HR department for over 50 years, one can imagine the state of affairs. After half a century, if you are establishing HR systems and processes, you should have anticipated the resistance to the change you wish to bring in.
The problems you are facing are common in family-run businesses. These arise due to the following reasons:
a) There is no strategic planning or a strategic plan itself. Therefore, organizations of this kind do not conduct SWOT Analysis. Management fails to identify the risks associated with relying on individuals rather than systems and processes.
b) Generally, the growth of such organizations is 15-20% year-on-year. This fosters complacency, which can lead to arrogance. However, the management lacks the capacity or inclination to calculate yearly losses due to the absence of systems and processes. Both profits and losses should be calculated, but these organizations only focus on profits.
c) There are no proper performance measures. Usually, the length of service or loyalty is rewarded over performance. Leadership tends to surround themselves with a clique or yes-men, avoiding criticism and differing views, which are often dismissed as disobedience.
d) Most of these organizations operate with opacity and secrecy. Leadership tends to favor individuals of their own caste, where personal allegiance takes precedence over intelligence.
Your Future Course of Action
The change you wish to implement, whether in HR or otherwise, depends on the authority you hold. What is your designation? Does it align with your authority? Most importantly, what is the management's buy-in? Will the leadership support the changes you propose? If not, it might be more productive not to spend time convincing them. Instead, consider waiting for the next 2-3 years and then moving on. Change is not merely accepted but embraced when it is enforced from the outside. You may or may not be present when the management realizes the consequences of not changing.
Thanks,
Dinesh Divekar
From India, Bangalore
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The problems you are facing are common in family-run businesses. These arise due to the following reasons:
a) There is no strategic planning or a strategic plan itself. Therefore, organizations of this kind do not conduct SWOT Analysis. Management fails to identify the risks associated with relying on individuals rather than systems and processes.
b) Generally, the growth of such organizations is 15-20% year-on-year. This fosters complacency, which can lead to arrogance. However, the management lacks the capacity or inclination to calculate yearly losses due to the absence of systems and processes. Both profits and losses should be calculated, but these organizations only focus on profits.
c) There are no proper performance measures. Usually, the length of service or loyalty is rewarded over performance. Leadership tends to surround themselves with a clique or yes-men, avoiding criticism and differing views, which are often dismissed as disobedience.
d) Most of these organizations operate with opacity and secrecy. Leadership tends to favor individuals of their own caste, where personal allegiance takes precedence over intelligence.
Your Future Course of Action
The change you wish to implement, whether in HR or otherwise, depends on the authority you hold. What is your designation? Does it align with your authority? Most importantly, what is the management's buy-in? Will the leadership support the changes you propose? If not, it might be more productive not to spend time convincing them. Instead, consider waiting for the next 2-3 years and then moving on. Change is not merely accepted but embraced when it is enforced from the outside. You may or may not be present when the management realizes the consequences of not changing.
Thanks,
Dinesh Divekar
From India, Bangalore
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Mr. Dinesh,
The reasons you have mentioned in your post are very true. I am facing the same problem with my management. As an HR manager, I have tried hard to convince them to implement HR systems and processes, but it has yielded no results. At the same time, I want to mention that authority is not everything unless your management is willing to cooperate.
Please give me some ideas on how to convince them.
Thank you.
From India, Bhubaneswar
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The reasons you have mentioned in your post are very true. I am facing the same problem with my management. As an HR manager, I have tried hard to convince them to implement HR systems and processes, but it has yielded no results. At the same time, I want to mention that authority is not everything unless your management is willing to cooperate.
Please give me some ideas on how to convince them.
Thank you.
From India, Bhubaneswar
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If the management style of the business leader is traditional, changing them becomes very difficult. In my training experience, I have seen cases where the father is the Managing Director (MD) and the son is the Director. The son has differences with the father and eventually starts a new business. When the father refuses to oblige his son, do you think they will accept what paid employees say?
Resistance to change arises from the non-execution of the strategic plan for their company. Far from making a strategic plan, they do not even understand what strategy is. A strategic view diverts attention to external factors, including competitors, rather than getting caught in mundane chores.
Therefore, if you wish to convince the management, rather than focusing on routine HR matters, I recommend you focus on preparing the strategic plan. Strategy is about identifying the risks associated with the business and taking timely preventive measures. It involves deciding the direction of the enterprise by avoiding risks that may arise in the future.
I conduct a 3-day Training on Strategic Analysis of the Enterprise. I thoroughly discuss strategic tools in this training. Recently, I conducted this training program with five participants aged between 40 and 55. Although each participant had reasonable experience in their respective functions, none had clarity on strategy. For the last 20-25 years, they had lived in a world of misconception.
Thanks,
Dinesh Divekar
From India, Bangalore
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Resistance to change arises from the non-execution of the strategic plan for their company. Far from making a strategic plan, they do not even understand what strategy is. A strategic view diverts attention to external factors, including competitors, rather than getting caught in mundane chores.
Therefore, if you wish to convince the management, rather than focusing on routine HR matters, I recommend you focus on preparing the strategic plan. Strategy is about identifying the risks associated with the business and taking timely preventive measures. It involves deciding the direction of the enterprise by avoiding risks that may arise in the future.
I conduct a 3-day Training on Strategic Analysis of the Enterprise. I thoroughly discuss strategic tools in this training. Recently, I conducted this training program with five participants aged between 40 and 55. Although each participant had reasonable experience in their respective functions, none had clarity on strategy. For the last 20-25 years, they had lived in a world of misconception.
Thanks,
Dinesh Divekar
From India, Bangalore
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Dealing with Resistance in Owner-Driven Companies
In owner-driven companies, one often finds a lot of "deadwood" that enjoys the extreme confidence of top management. Such individuals resist any change and create obstacles for other managers who are trying to implement changes. They do not train new recruits under them and try to ensure that they remain indispensable. Their asset is their long association with the company, loyalty, and vast knowledge of the workings of most departments within the company.
With the complexities of business increasing every day, new knowledge (such as software and laws) is what they miserably lack.
One needs a lot of patience and perseverance in dealing with such matters.
Regards
From India, Pune
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In owner-driven companies, one often finds a lot of "deadwood" that enjoys the extreme confidence of top management. Such individuals resist any change and create obstacles for other managers who are trying to implement changes. They do not train new recruits under them and try to ensure that they remain indispensable. Their asset is their long association with the company, loyalty, and vast knowledge of the workings of most departments within the company.
With the complexities of business increasing every day, new knowledge (such as software and laws) is what they miserably lack.
One needs a lot of patience and perseverance in dealing with such matters.
Regards
From India, Pune
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Strategies for Achieving Excellence in Your Department
Spend some time understanding how things work or don't work in your company. Identify the key people, their duties, and how they coordinate their work. After all, the company has been running for a long time.
Before implementing changes, settle down and win the confidence of the people. Change is always resisted. Introduce modern management concepts one by one, starting with the most important changes first. Sudden radical changes will be difficult and not advisable.
Talk to top management about legal compliances and the consequences of not adhering to them. This will resonate with the top management, and they will be forthcoming. Once you get support from the top, things will get a boost.
Patience and diplomacy, with a clear roadmap, are the way forward.
From India, Pune
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Spend some time understanding how things work or don't work in your company. Identify the key people, their duties, and how they coordinate their work. After all, the company has been running for a long time.
Before implementing changes, settle down and win the confidence of the people. Change is always resisted. Introduce modern management concepts one by one, starting with the most important changes first. Sudden radical changes will be difficult and not advisable.
Talk to top management about legal compliances and the consequences of not adhering to them. This will resonate with the top management, and they will be forthcoming. Once you get support from the top, things will get a boost.
Patience and diplomacy, with a clear roadmap, are the way forward.
From India, Pune
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Strategic Change Management.ppt