Monday, April 12, 2010

Management Thought

I am writing this because I promised one of my colleague that I will really write about this subject. Business is very close to my heart and I am critically looking at one aspect of business in this blog post.

Now a days everywhere we have incentives, incentives is major portion of our take home salaries, some companies call it performance pays, some call rewards, some call target achieving bonus but it simply means company is interested to pay you if you give what company wants. It is fair on companies part to give such scheme as there are lot of cost pressures on companies now a days and wage bill can not be same when company performs poorly or when company is in full swing. Many people do not understand the fact that such schemes actually avoids layoffs. Imagine you are a shareholder of company, you want profit to grow every year but market is not growing at this pace, of course company will not be able to perform to the expectation of the shareholders, profits will fall, share price will fall and then so called “rating agencies” will downgrade the company making it harder to do business. Company will analyze and benchmark itself with leader in the industry will find out that employee cost is very high and end result will be lay off. Many will loose jobs in situation like this. But if you have a pay scheme that varies as companies performance then company and employee is safeguarded against such situation.

By reading above many will think I am really working for HR, and I am an under cover person appointed by company but what I wrote till now is of ideal system, but we all know the world is not so Ideal.

The biggest problem is how you will measure the performance. Only profits, Orders, Sales, Turnover are the performance criterion then it is really a short sighted scheme. Everything linked to money, I think one day you coming to office on 7AM or 8AM will also decide your Bonus. Foolish.

Of course company is there to make money and to increase shareholder value but as many thinker and speakers have mentioned that it should not be only target for company. You can make profit of more than 100% by trading in stocks, commodities so should each company start a division to trade, this is not correct so one should really take a look and think what my company is all about. In today’s world when MNCs are becoming more and more big, more complex and having more product than  one can remember, it is important to convey company target to each and every employee. If not then we have a classic department battles and insider fights.

Bonus and incentives play a major encouragement for employees to strive hard to achieve but it is a big problem when things are not going good. This is human mentality that when we achieve everyone things they deserved it but when they fail they think it is unfair to them. So when people fail to get the bonuses they start blaming company, start thinking negative and again under achieve. This cycle is dangerous and for many end of the road is quitting for “better prospects”.

According to me the solution lies in the scheme itself. Targets should be such that when employee over achieves it gives lot of praise and money but also keeps something for future down cycles. Each business is cyclical and hence company really has to plan for downturn. When downturn comes previously accumulated credits of employee can be passed on and company can give some non business soft targets which add value to society and to company. For example research on device which will help blind, or planting trees on deforested areas, adult education, some hobby training courses and many more. This will not only bring positive attitude towards company but also full fill social responsibility “OBLIGATIONS”. I am specially writing in Capital as many companies take this as a cost and not profit.( I wish to write about this in detail some other day) This will help employee to get relieved from stress and day to day struggles and try to get some achievements he can be proud of. This will boost his morale and he will be at his creative best.

So by removing uncertainty of bad times from employees mind, company can expect more creativity and more loyalty from employees. Of course this is again a Ideal proposal, may work or may not work but when I see companies trying crazy things to retain talent this is worth a go.

 

Disclaimer: I should mention this that thoughts mentioned above are not influenced by any company, policy or person. I am not saying current systems are bad and if anyone draws such conclusions then that is his/her though……….

Signing Off

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Friday, April 9, 2010

Champions league- History made great individuals, failed teams

I generally do not write blog about matches played between teams other than Chelsea, but I have to admit that recent developments are making me write and admire select individuals.

Messi, Riberry, Roben, wesley great players and great performances for teams have helped their respective teams to reach semis of UEFA Champions league. I will not like to go in details of each match as analysis will not be possible as such. You can not say who went wrong and who done correctly it was classy performance which we should just admire.

Messi, We all know he is footballer of the year and without any doubts he proved why he is called so. Scoring 4 in Quarter final second leg is huge and he is the man who does all these things and makes world bow to his skills

Riberry, his free kick started it all, may be not the best in the world but it is said god helps them who help themselves and Bayern has really helped themselves to reach semis, after 3 quick goals coming from behind and scoring 2 away goals at Old Trafford is an achievement, Alex Ferguson may criticise the opponents but he should look at his own team which gave away lead of 2 goals.

Roben, what a way to silence the home fans, fantastic volley from edge of the box that even world’s so called No1 can not save. Former Chelsea winger just proved his class and you can imagine why Chelsea has not won last few years as he is really missed at Chelsea.

Wesley, Dumped by Real Madrid and replaced by Alonso but he proved why he deserved a place at Real, defeating Chelsea single handily and scoring away at Moscow you can not ask for more from a Midfielder.

This year it is individual performances that caused wins and losses which is not a very good sign for football a team game but when you have such talented footballers what you can do. After 2003 it is for the first time that no English club has made to semis which is really sums up the season for big 4 in England, Muscular and physical English sides outsmarted by tactical and stylish European teams. Despite a huge fan of EPL and Chelsea I must admit we were poor. Many point finger at number of injuries English sides have faced this year and I also agree to it. Loosing key players always creates holes in teams which are difficult to fill. Exit of all 4 from UEFA makes EPL more tough and nail biting a treat in the waiting.

Signing Off

Nikhil

Sunday, April 4, 2010

Chelsea 2 -MANU 1 But title race is Still Wide Open

As a Chelsea fan you can not ask for more.. can you a premier league double over last year champions.

I was really very happy to see team play well under pressure. It is not easy to go to Old Trafford at this time of season. But after champions league exit, Chelsea has really done well. Part of the success is due to its formation. Playing two holding midfielders has really allowed full backs to attack and that has helped Chelsea a lot. Yesterday’s game was also dominated by Chelsea due to the fact that full backs were able to make surging runs in opponent six yard box. This was lacking against Inter which caused two losses against them. I think if Ashley Cole was there instead of Ferreira then it was 2-0 lot earlier.  But in all it was a wonderful result. Joe was playing well and I think after his recent performances he will get a good long term deal at Chelsea. A big club letting go one of the good player for free is very odd and I don’t think this will happen. Next five games if Chelsea continue to play well like this then title will come back to Stamford Bridge. We will love to see that but it is still difficult. Many times it happens that after winning a major game you become overconfident and loose to weaker teams. Chelsea has away fixtures at White Hart Lane and Anfield. These two games hold key. I think Chelsea with current formation and form can overpower these two teams but there are many good players to watch out.

After Yesterday’s late winner by Arsenal they have shown they have temperament and patience needed by top team. Hats off to them creating chances after chances without success, but they tried and fought till last and won the reward. This really makes the difference and this is the reason why Liverpool is struggling. The team drops shoulders immediately they trail or not able to score. Arsenal are still in the title race but considering their injury problems I think they will drop some points, atleast 2 points from remaining 5 matches.

Man City is on a roll and yesterday’s bashing of Burnley are enough to give MANU some jitters. If MAN City play again the same way then MANU will surely loose. MANU is really lacking the pace of attack, MANU is certainly vulnerable against team which plays very well in wings. We saw it against Bayern and now against Chelsea. When full backs are kept quiet then MANU really loose its teeth. They are also missing their prolific striker Rooney.

In all Season is far more interesting now, Earlier seasons there was two fights one for top spot and other to avoid relegation but this season there are total 3 fights going on. One for silverware, other to avoid relegation, third for Champions League spot. This really make EPL most competitive and famous league in the world.

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