GLOBAL RECESSION AND EMERGING CHALLENGES FOR HUMAN RESOURCES MANAGEMENT IN INDIA Ms.Khyati vora Roll No 12 M.

PHIL (COMMERCE) 1

GLOBAL RECESSION AND EMERGING CHALLENGES FOR HUMAN RESOURCES MANAGEMENT IN INDIA INTRODUCTION Meaning of Global Recession 2

A recession is a decline in a country s Gross Domestic Product(GDP) growth for two or more consecutive quarters of a year. A recession is also preceded by several quarters of slowing down. Aneconomy, which grows over of period of time, tends to slow downthe growth as a part of the nor mal economic cycle. An economytypically expands for 6-10 years and tends to go i nto a recession forabout six months to 2 years. A recession normally takes place whenconsumers lose confidence in the growth of the economy and spendless. These leads to a decreased demand for goods and services, which in turn leads to a decrease in production, lay-offs and a sharprise in une mployment. Investors spend less; as they fear stocks values will fall and thus stock markets fall on negative sentiment. Risk aversion, deleveraging and frozen money markets and reducedinvestor interes t adversely affect t capital and financial flows, import export and overall GDP of an economy. This is what exactly whathappened in US an d as a result of contagion effect spread all overthe world due to high integrati on in the global economy. According to the International Monetary Fund (IMF) s latest Global Financial Stability report (GFSR) widening and deepening fallout from the US subprime mortgage crisis have profound financial system and macro-economic implications. While the US remains at the epicenter , the backwash effect ofthe American financia l institution in other countries reflecting the same overly benign global financial conditions, an inattention to appropriate risk management systems and lapses in prudential supervision . The global slowdown has its implications on the domestic economy. During the last three years Indian Economy grew at anaverage annual rat e of 8.6 per cent. For the first time the economyhas shown signs of deceleration and grew at 7.8 per cent in the firsthalf year of 2008-09 (April-September). Th e service sector, which contributes more than 50% share in the GDP and is the primegrowth engine, report ed to be slowing down, mainly in the transport, communication, trade, and hotels & restaurants sub-sectors. The industrial growth has decelerated sharply during April-November, 2008 encompassing all the constituent sectors. In manufacturing sector, the growth has come down to 4.0 per cent in AprilNovember, 2008 as compared to 9.8 percent in the correspondingperiod of last yea r. The slowdown occurred in the all the use-basedcategories, except consumer goo ds where it has accelerated. Meaning of HRM Humans are an organization's greatest assets; without them, everyday business functions such as managing cash flow, makingbusiness transacti ons, communicating through all forms of media, 3

and dealing with customers could not be completed. Humans andthe potential they possess drive an organization. Today's organizations are continuously changing. Organizational change impacts not only the business but also its employees. In order to maximize organizational effectiveness, human potential individuals' capabilities, time, and talents must be managed. Human resource management works to ensure that employees areable to meet the org anization's goals. Human resource management is responsible for how peopleare treated in organizati ons. It is responsible for bringing people intothe organization, helping them pe rform their work, compensatingthem for their labors, and solving problems that a rise. There are seven management functions of a human resources (HR) department that will be specifically addressed: staffing, performanceappraisals, compensation and benefits, training and development, employee and labor relations, safety and health, and human resource research. Global Recession and HRM The financial downturn is impacting developed as well as developing economies are likely to get worse as the Europeancountries, the US an d others go into a deeper depression due to theincrease in job losses which ofte n follows recession. The slump inthe market and increased job losses will have s ome importantimplications for the changing task of human resource professionals. As the unemployment continues to increase, HR professionals arelikely to be deal ing with more stressed employees who are the solewage earners in their families. As recession is becoming the part of the normal cycle of business. Therefore it makes just as much sense to plan for recession or downturns as it does to plan for good, economic times. OBJECTIVE This economic downfall has affected all the major sectors in India including IT, aviation, banking, real estate, tourism, outsourcing, telecommunication, etc with its consequence mainly on the HR policies of these industries. This article discusses 4

1. Impact of economic slowdown on employment in India. 2. The emerging challenges of human resource management in the global recession situation. 3. The strategy adopted by HR personnel to deal with these challenges. HYPOTHESIS In today s economic meltdown where job cuts, loss, pay reduction, last come first go, insecurity of employment atmosphere prevail, HR has special responsibility to create ease environment to the affected by counseling, displaying care and concern, preparing them for multi skill task, engaging and deploying in other required areas of functions like security, crisis management team, etc. Global recession has raised various emerging challenges for Human Resources Managers HR needs to be proactive & innovative and try to come up with early interventions as for any organization to survive during recession. REVIEW OF LITERATURE The global economic crisis is expected to lead to painful cuts in the wages of millions of workers worldwide in the coming year. It predicts that the slow or negative economic growth, combined withhighly volatile food and energy prices, will erode the real wages ofthe world s 1.5 billion wageearners, particularly low-wage and poorer households. Between the years 1995 and 2007, for each one per cent decline in GDP per 2 capita, average wages fell even further by 1.55 percentage point, a result that points to the possible 5

effects on wages in the current crisis. [International Labour Office (ILO), 2007-08]. The economic slowdown of the advanced countries which started around mid-2007, as a result of sub-prime crisis in USA, led to thespread of eco nomic crisis across the globe. Many hegemonicfinancial institutions like Lehman Brothers or Washington Mutual orGeneral Motors collapsed and several became bank rupt in this crisis. According to the current available assessment of the IMF, the globaleconomy is p rojected to contract by 1.4 per cent in 2009.Even asrecently as six months ago, there was a view that the fallout of thecrisis will remain confined only to the financial sector of advancedeconomies and at the most there would be a shallow e ffect on emerging economies like India. These expectations, as it now turns out, have been belied. The contagion has traversed from the financial to the real sector; and it now looks like the recession will be deeper and the recovery longer than earlier anticipated. Many economists are now predicting that this Great Recession of 200809 will be the worst global recession since the 1930s . [Choudhari2008] The financial downturn that is impacting developed economies arelikely to get wor se as the European countries, the US and others gointo a deeper depression due t o the increase in Job losses whichoften follows recession. The slump in the mark et and increased joblosses will have some important implications for the changin g tasksof human resource professionals. As the unemployment continues toincrease , HR professionals are likely to be dealing with more stressed employees who are the sole wage earners in their families . [Mujtaba, 2008} The global economic crisis has brought to the forefront of organizations the concepts of viability and survival which at thesetimes can be desperate pursuit. There are three main reactions inorganizations, namely the co rporate reactions in organizations, namely the corporate reaction to remain viable, the employee reaction to survive the turbulence, and the human resources reaction ( including recruiting and hiring talent, corporate organization, training and institutional learning) . [Kathleen Patterson & Gray Oster, 2008] In emerging economies, growth is projected to slow down appreciably but still may reach 5.0 percent in the year 2009. The overall recruitments are lower for the industry this time as companies remain cautious amidst the global financial crisis. [Srivastav, 2009] 6

Growth in real wages has slowed down globally in 2008 because ofthe economic cris is and the trend is expected to continue in 2009, despite signs of economic recovery. Growth in average wagesreduced from 4.3 % in 2007 to 1.4% in 2008. Real wages in the firstquarter of 2009 also fell in more than half of 35 countries, comparedto the annual average of 2008, Wage deflation deprives national economies of much needed demand and seriously affects confidence, Minimum wages are an important policy tool for socialprotection and pr oposes that minimum wages be combined withother income support measures and/or t ax reductions . [ILO,2009] "The last time anyone faced a situation like this was in the 1930s, soif there i s anyone who is 98 (assuming they should have been atleast 20 then) and is coher ent the rest of us are figuring out andlearning on the fly," reasons Elango R, ch ief human resources officer, Mphasis. According to Elango, "Managing the unknown, visualizing into the uncertain future, constantly calibrating and tuning the variables and hoping to high heaven that you are onthe right path are r esponsible for increasing stress levels." He believes that the challenge is to take long term decisions withoutissuing the sh ort term. This requires skills, knowledge and thinkingthat are not called on in a growth environment. "In a growthenvironment, one's pre-occupations are differe nt, and having seengrowth for years most of us are skilled at this. The current businessenvironment entails a delicate tightrope walk balancing both thebusiness interests and employee interests." [Elango R, 2008] RESEARCH METHODOLOGY Secondary Data collected from various sources like Economic & Political weekly HRM Journals ILO Reports Ministry of Labour & Employment Labour Bureau ANALYSIS & INTERPRETATION I. Impact of economic slowdown on employment in India. 7

. Ripples of recession leading to reduction in exports to developed countries are being felt by all the developingcountries. Credit availa bility and its cost have become majorareas of concern. The combined impact of al l these factorswould be loss of employment and reduction of income leadingto soc ial distress. The International Monetary Fund (IMF) placedthe estimated world ou tput growth at 3.75 per cent in the year2008 and 2.2 percent in the year 2009 in World EconomicOutlook (WEO), November 2008, which represented a significant slide from a level of about 5.0 per cent in the year2007. . The global situation deteriorated rapidly after mid September, 2008 following the collapse of Lehman Brothers, one of the topfive investment ba nks in the US, the collapse of American International Group (AIG) Bank and also of the mortgage lenders Freddie Mae and Fannie Mae. There has been a massive choking of credit since then and a global crash in thestock markets. . The deepening of the global crisis and subsequentdeleveraging and risk aversio n in the global markets affectedthe Indian equity and the foreign exchange marke ts. While theIndian economy has a sufficient internal ballast to withstandthe im pact of global recession because of overall strength ofdomestic demand and the p redominantly domestic nature offinancing of investment and exposure of exports t o less than20% of GDP, nevertheless some slowdown is inevitable. It may be observed from Table 1 that the total estimated employment in all the sectors covered by the survey went downfrom 16.2 million d uring September, 2008 to 15.7 million duringDecember, 2008 resulting in job loss of about half a million. It is seen that the employment declined every month during this period. It has also been observed that the employment in all the sectors/industries studied went up significantly over the period fromMarch, 08 t o September, 2008. Beyond September, 2008, it hashowever, decelerated at all ind ustries/sectors level at an averagerate of 1.01 per cent per month. 8

Trends in Average Employment Period Average Employment in Percentage (millions) change September, 08 16.2 October,08 16.0 -1.21 November,08 15.9 -0.74 December,08 15.7 -1.12 Average Monthly change-1.01 Source : Government of India, Ministry of Labour & EmploymentLabour Bureau, Chan digarh. From the above data it is observed that the management peopleand employees may e xperience anxiety around a number of issues duringan economic crisis or downturn . The monthly average rate of employment loss during Oct- Dec, 2008 was 1.01 per cent whereas in January, 2009 the rate of decline has increased to 1.17 per cent. The increase in rate of change is mainly due tothe d ecline in employment in IT/BPO sector in January, 2009 in contrast tothe increas e in employment during Oct-Dec, 2008 and also higher rate ofunemployment in Auto mobile Sector. The month wise employment trendsare presented in Table 1.2. Table 1.2 Trends in Average Employment Sl. No. Decline Period % Rate of 1 October, 2008 9 1.21

2 November, 2008 0.74 3 December, 2008 1.12 5 January, 2009 1.17 Source : Government of India, Ministry of Labour & Employment Labour Bureau Chandigarh The economic slowdown is expected to adversely impact the qualityof employment b esides the quantity reflected by decline in employment. The quality aspect is measured in terms of decrease in average wagesreceived by theemployees. Hence information is also collected on the total 12 earnings ofwor kers. The results of the survey reveal that the average monthly wageshave also d eclined by 0.26 per cent in January 2009. The average monthlydecline during OctDec, 2008 was 3.45 per cent. During the current surveythe average monthly wages for direct and contract workers are also collected. The findings of the survey reveal that average monthly declinein the wages are 0.25 per cent fordirect category of workers and 0.63 per cent for cont ract workers in January, 2009. The information is presented in Table 1.3. Table 1.3 SR.No. Change Period Percentage 1 October, 2008 1.74 2 November, 2008 -11.43 3 December, 2008 -0.5 4 January, 2009 -0.26 Source : Government of India, Ministry of Labour & EmploymentLabour Bureau Chandigarh Table 1.4 Month Wise Estimated Job Loss 10

Sl.No. Period Estimated Job Cumulative Job Loss Loss 1 2 3 4 October, 2008 1,96,092 1,96,092 November, 2008 1,17,550 3,13,642 December, 2008 1,77,222 4,90,864 January, 2009 98,156 5,89,020

Source : Government of India, Ministry of Labour & EmploymentLabour Bureau Chandigarh It needs to be noted that the rate of decline in employment inJanuary, 2009 is h igher than average monthly rate of the previousquarter, whereas the total loss o f employment estimated is less thanthe previous monthly estimates. In this recession period HR play an important role to make theindustry sustain a nd the entire economy flourish. This paper expresses the challenges of human resource management in the global recession situation. The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Managementmust play a more s trategic role in the success of an organization. The most important challenge in recession period that is revolutionizing the Human Resource systems to identify, maintains, develop and utilize talents across the organization to their fullestcapacities. The management of Human Resources has now assumedstrategic importance in the ach ievement of organizational growthand excellence. As globalization advances and w e move into the 11

information age, organizations need to adapt to the changes in technology and the changing issues in management of people. I. The emerging challenges of Human Resource Management in the times global recession The role of the Human Resource Manager is evolving with thechange in competitive market environment and the realization thatHuman Resource Management must play a more strategic role inthe success of an organization. Organizations that do no t put theiremphasis on attracting and retaining talents may find themselves indi re consequences, as their competitors may be outplaying them inthe strategic emp loyment of their human resources. With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a changementor within th e organization. In order to succeed, HR must be abusiness driven function with a thorough understanding of the organization s big picture and be able to influence key decisions andpolicies. In general, the focus of today s HR Manager is on strategicpersonnel retention and ta lents development. HR professionals willbe coaches, counselors, mentors, and suc cession planners to helpmotivate organization s members and their loyalty. The HR managerwill also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity. These paper discusses few important challenges of HRM due to recession and i.e 1. Problem of Recruitment. 2. Managing downsizing program appropriately. 3. Talent management. 4. Stress Management. 5. The Return on Recognition in a Recession. 1. Recruitment and Recession. Recruitment industry is going through a tough time at this moment, the numbers have dropped drastically for the biggies and even recruitment agencies are battling for survival. SynergySolutions provides r ecruitment services to companies in India and inUS, the biggest challenge today is to find newer and better ways toadd value to the clients. There is a need to find innovative ways toimprove recruitment ROI for the client. 12

First things first, the base idea is not to wait and find ways toweather the sto rm but to take proactive measures to tide the wave. The world is changing very quickly to combat recession and it sabout time we trans late our thinking into action or else we will belate. The main reason being the companies who are hiring haverecently made drastic cuts in their recruiting budg et and are in theprocess of streamlining their side of the story. Companies (clients) has to demand greater accountability fromrecruitment agencie s and focus on improving their recruitment ROI. Recruitment agencies / staffing companies who are agile in theiroperation and ca n quickly adapt to the changing environment willemerge victorious at the end of this recessionary period. Few areas where placement agencies should focus: Closely monitoring the way each industry is changing in current times and the way companies within the industries arechanging their hiri ng strategy. Build stronger relationship with clients thereby working closelywith your contac t points in the company to get clarity on theirinternal hiring plans and prepare accordingly. This will also help protect your share in the pie from your competitors. Clients will use this recession to re-negotiating the recruitmentcontracts with recruitment agencies. Since numbers are fallingevery day recruitment agencies wi ll be concerned about theircash flow situation and as a result will have no opti on but to beforced to negotiate their existing contract. New client wouldwant to start the relation on the terms advantageous to them, that means lower rates and tougher terms. Look out for companies who are brave and would considerrecession as the right ti me to recruit good quality talent at theright price. These are usually multinati onals with deep pocketsand would want to drive competitive advantage home. Be smart to attack these companies. Train your recruiters to be tactically smart and agile in theiractions. During t he boom there were a lot of open positions and even more candidates available so the match making activity was comparatively easy and largely govern by the good sentiments in the market. During tougher times recruiters need to be smart and get themselves deeper intothe fit gap process an d ensure win -win situation for the clientand the candidate Use of technology and social media applications to hunt betterprofiles as compar ed to job boards. Sites like LinkedIn, Facebook, Twitter and other social and business networking 13

sites are fast becoming every recruiter s trump card. Lot of head hunting can happen over these networking sites. If your salary component are on the higher side and you foresee that it s going to be difficult to sustain then take adequate action now try and offer a mix of lower fixed andhigher variable with a n assurance that salaries will get back tonormal once the market stabilizes. 1. Managing downsizing appropriately. Virtually every country has to face the impact of a global economicdownturn whic h can be in the form of recession, slowdown, depression or growth recession. When a downturn occurs, the organizations have to suffer heavy losses and bear the brunt of slowrevenue gene ration. During this period, there is also less spendingby the consumers, less in vestment by the investors and more ofsavings. Even the sectors who have been thr iving in the boom period try to save more. Numerous causes can be attributed to the economic downturn and one of which affects the business is lack of skilled manpower. Other reasons could be the increasing population, lack of food supply, climatic condition, and entry of substitutes, inapt investments and technological changes. The shift in supply and demand hugely affects the entire business cycle. There can be acuteshortage of c ash supply leading to less or poor investments. All of this may ultimately affect the morale of the employeeswhich should be a c oncern to every organization. Also, the decline ingrowth and decrease in profits certainly calls for certain top-of-theline strategies to make adjustments to serve organizational needs. Managing the teams or human capital at this juncture is aHerculean task. So, a m anager should devise certain strategies inorder to manage teams during down turn s. Downsizing during thisperiod is certainly not a good option because if there are merits oflaying off of employees, there are many demerits too. What should a manager do to manage teams or workforce? Hold special meetings: During this unsafe situation, the organization s top most head or CEO should brief the meetingwhere the main subject should be the employees and their concern. If the head of any organization feels confidant, thewhole organization feels confidant. Alternatively, middle-levelmanagers and senior managers can con duct private meetings 14

where they can console their subordinates. Also, give your workforce to ask questions and express their feelings regarding the business insecurity. Motivate the employees: The key to managing and retaining the employees during downturn is motivation. Apartfrom the special mee tings being conducted, a manager shouldregularly be attending to their problems and constantly triggerthe employees to have good mood. Offering challenging assignments and opportunities: If you offer your teams the challenging assignments, they spiritswill be lifted and they will manage to survive even in bad times. Explain to them the importance of their existence injobs: There is no use crying over the spoilt milk, just like economy turning to a bad shape and business showingdownfall. Its better that you discuss about the new projectsand subsequently tell them what role they have to play. Howtheir productivity can make the organization grow, explain tothem. Initiate change by identifying key people: There are few employees who are influencers and can bring about a lot ofchange in the organiza tion. If these employees are given theright message to convince other team worke rs, the organization can move in the right direction. Identify the achievers and reward them: Even during this period, you should give your employees the bonuses and increments if possible. In this way, they will always remainmotivated and perfor m. All the above points are crucial to letting the organization grow togreater heig hts and following the above strategies will promote thegeneral health of the org anization despite economic downturns. 3. Talent Scenario during Recession The law of demand and supply mercilessly applies to human resources, also. During the economic downturn, companies were able to downsize by getting rid of redundant work force and dead wood. They also restructured the employee compensation (mostly by decreasing) to stave off financial losses. Only those employees 15

were retained who proved their worth. The employees had to accept all kinds of compensation-related compromises while maintaining the same or even higher level of efficiency and productivity. They could thus survive the financial tsunami. These survivors got the opportunity to handle a variety of tasks that further sharpened their skills and made them multiskilled. Thus, overall quality of talent has increased. At the same time, those who were out of job lost this opportunity to hone their skills in a new challenging environment. Adding to our woes, slashing of training and development budgets has led to a depletion of the number of skilled employees within the companies. Such steps from companies have created an altogether tricky scenario: The quality of talent within the companies has increased (raising the bar of the talent), while the quality of skills available in job market has dwindled. Now, recruiters can hire the required quality talent not from outside but from inside their competitors workplace. While many have forgotten the term War for Talent , the phenomenon is slowly re-emerging. A study by Accenture has found that more than two-thirds of executives are now deeply concerned about not being able to recruit and retain the best talent. In today s global and highly competitive economy, the war for talent is now global, not local. The survey of more than 850 top executives from the U.S, UK, Italy, France, Germany, Spain, Japan and China found worries about talent management were growing, with 67 per cent this year putting it second only behind competition as the key threat, up from 60 per cent last year. It may be worth noting that great companies such as Infosys, responded to the downturn by investing more in training. Instead of fearing of financial losses, these corporate focused on improving the quality of their employees skills. And the effect is visible in their financial results. Member of Infosys board of directors and head of HRD and Education and Research, T V Mohandas Pai said, In response to the economic crisis, we had stepped up our investment in training. This has made us more competitive in fulfilling clients needs today. The demand for talent in the market will never cease. Retention will always be a challenge. 16

New Definition of Talent While war for talent continues, the bar for talent also goes up. Old skills and competencies may not work. Companies now need salesman who does not sell products but does sell solutions; production managers no longer control the operations, they are expected to innovate and improve productivity; and quality managers need to study competitive products with more zeal and help develop better products and services. The employer s expectations have changed and are set to grow: Highly Productive: The talented employees need to be highly productive. They should deliver much more than they are compensated for. If that happens, employers are willing to give larger share to them. Multi-Skilled: Companies have discovered that one way to decrease recruitment cost is to have multi-skilled employees. Multi-skilled employees help reduce manpower dependence, and the overall sum of all the multi-skilled employees is greater than the same number of equal number of specialist. Self-Managed and Self-Motivated: Self-managed and selfmotivated employees reduce managerial efforts. This helps organizations to have less number of managers. Innovative and Out-of-the-Box thinkers: As the rules of the business change and competition increases, the existing solutions no longer work. Companies need employees who constantly infuse new ideas and provide out-of-the-box solutions to meet a customer need that seems to have no end. The Key to Retain Talent Lies in HR Policies and Practices As organizations increase their expectations from employees, employers too have to significantly change the way they manage the talent. Talented employees continuously need new challenges and goals they can achieve, and a continuous supply of information and resources they can use to solve business problems. And needless to say, they will in return demand more lucrative and effective compensations, a great work culture and friendly HR policies. Even during the recession, companies are reviewing and revising their leadership development programs. Survey after survey 17

indicates that people relationship with the job. A recession is a style and training to management.

who quit their jobs do so because of their boss, not because of dissatisfaction with their perfect time to take a hard look at leadership increase employee satisfaction with

Five Important Talent Retention Factors Lets us consider five factors that can help organizations retain talent to meet the client and business requirements in postrecession era: i. Clear Goals, Targets and Expectations: You need to tell them what exactly you expect from employees and what should they do to meet these expectations. A talented mindwithout a direction is most likely to pull the plug than a mediocre or a dead wood. ii. Balanced Work Environment: Talented employees have huge positive energy and they exhaust this energy to meet thedeadlines. But ofte n they need time to re-energize themselves. Organizations that want to retain talented employees need toprovide a positive e nvironment that allows them to re-energizethemselves more often. iii. Track Performance Goals and Provide Analysis: Innovators and hard workers need constant motivation to perform better. They need to know whether they are producingdesired results. Any suggestion of not being able to deliverthrows them in doldrums. One way to let them know abouttheir performance (whether improving or declining) is to pointtow ard specific results, achievements or failures (which theycan fix before it is t ool late). iv. Fair Evaluation of Performance: At the end of the day, thehigh fliers want t o get acknowledged for their work. The firstacknowledgment of the hard work is a fair and formal appraisalof their performance. They should be specifically told wherethey met expectations and where they did not. v. Compensation to Maintain a Decent Lifestyle: Employeeswho deliver quantity with quality also expect from employersfair compensation that is compatible with the market. If notfirst, compensation remains the second most important causeof brai n-drain from organizations. 18

4. Stress Management The financial recession is impacting large and small organizations and countries in similar devastating manner. For example, as the prices of goods and products increase, consumers tend to buy less and thus companies end up having to lay off some of their employees in order to avoid bankruptcy or just to stay in business, in the US during the first two months of 2009, over 17 banks have gone out of business and more such bankruptcies and closers and expected in the financial industry. Such failures tend to increase the number of people losing their jobs and moving them closer towards poverty. Stress is an inevitable reality and everyone needs to find their own ways of beating it . Stress is an inevitable part of work life. A recent Assochamsurvey lists constru ction, shipping, banks, trading houses, electronicand print media, courier compa nies, SSI, retail, card franchise companies, and even government hospitals as high stress prone zones akin to chart toppers like BPOs, call centres and IT companies. The pressure is truly spreading everywhere! There isample evidence of the fact that stress impacts employee health andproductivity. And of late, hund reds of articles have been written onhow financial stress due to the current eco nomic recession is havinga dangerous impact on health and productivity. Results from the AARP survey, "Impact of Economy on Health Behaviors" reveal that20 per cent of p eople 45 and older reported health problems due tofinancial stress; 22 per cent have delayed seeing a doctor due tocost; 16 per cent had to use retirement savin gs or other savings topay for medical care; 21 per cent have cut back on other e xpensesto afford their medical care; and 16 per cent are not confident theywill be able to afford health care in 2009. Bob Gallo, AARP Illinois Senior State Director is reported to have quoted that right now "people are increasingly concerned about their jobs, retirement savings and simply being able to provide for their families and it'staking a maj or toll on their health". India Inc. has woken up to the menace of stress and companies are taking to novel ideas like teaching employees dancing and music, trekking, etc, to reduce stress at the workplace. For instance, Tata Consultancy Services Ltd. has a variety of clubs Theatre Club, Bibliophile Club, Adventure & Trekking Club, Fitness Club, Sanctuary 19

Club, Music Club and Community Services Club, etc. to provide employees that much-needed break. Infosys Technologies Ltd. focuses on increasing self-awareness and providing employees withguidance on how to cope with stress through a series of workshopsby experts. Several organizati ons conduct off-site picnics, games, and inter-departmental competitions. Some companies use mentorship programs or promote open communication to improveinteractions and cam araderie at the workplace. Some employnutritionists to provide healthy food in o ffice cafeterias and counselemployees on healthy eating habits and lifestyle. Ot hers are offeringemployees in-house counseling services or considering employing psychologists to counsel employees. Some organizations like Emamiuproot employee stress through spiritual discourses and gyms forregular exercises to unwind and keep fit. It has been observed that the work stressors that currentlybother top HR executi ves include narrow perceptions of departmentheads and employees on achieving org anizational goals, unrealisticexpectations, waste of resources, employee engagem ent, ability toremain detached and be objective while dealing with managementand employees and being a robust problem-solving force in the organization. The demands of the current business environment are increasing stress on HR professionals of today and this is impacting their work, personal life, physical health and emotionalwell being. Ex pectations of better people management, coupled withdeadlines and competition, i s taking a toll on top HR executives. The constant changes in industry, ups and downs in employmentmarkets, challenges of hiring and retaining best talent, aligning HRfunctions with business objectives in current environments are increasingly posing threats to their stress levels. What's more, theeconomic dow nturn has increasingly put pressure on HR heads to manage and stretch themselves to the hilt as far as talent management goes innovating continuously with a view to optimizing productivity with lesser resources. Amidst the challengesof cost cutt ing, which invariably result in downsizing and layoffs, many top HR executives find themselves at the forefront of theaction wielding th e 'infamous axe' and taking on yet more stress asthey take on the role all other s in the organization fight shy of theone who delivers the pink slips. Due to the changing demographics of the business world, organizations are discovering that traditional tactics of managementare no longe r enough to remain competitive. Following are someways to manage stress effectiv ely. HUMOR AS A STRESS REMEDY 20

Humor is a wonderful stress-reducer. Experts say a good laughrelaxes tense muscl es, speeds more oxygen into your system andlowers your blood pressure. Tune into your favorite program or comedy shows on television. Read a funny book. Attend comedy shows. Call a friend and chuckle for a few minutes. Share funnyepisodes with you r spouse that can relieve stress as well improvecommunication. It even helps to force a laugh once in a while. You'llfind your stress melting away almost instan tly. Humor is used to facilitate communication and avoid conflict. It gives us a different perspective on our problems. If we can make thesituation li ghter, it no longer feels threatening to us. With such anattitude of detachment, we feel a sense of self-protection and control in our environment. Bill Cosby says, "If you can laugh at it, you can survive it." It's sometimes difficult to force a laugh in tense situations. Butthat's precise ly when you need it most. One trick for finding humorin the worst of situations is to blow things absolutely, ridiculously outof proportion. When your scenario reaches the point of absurdity, you begin to smile. The situation is put in perspective and you cancalm down. Re member humor about sex or gender, ethnicity, politics, humor or joking about tragedy or disease-related symptomsare considere d humor exclusion zones. STRESS BUSTING Understanding what triggers your stress and how to deal with ithelps in staying healthier. Here are a few tips: . Develop a capacity for detached involvement. Be sensitive topersonnel issues a nd individual employee concerns but resistthe rescuer role. . In times of processing downsizing of staff or upgradingtechnology get experts help. Even while dealing with seriouslydisgruntled or dysfunctional employees, c ollaborate with an Employee Assistance Program counselor. And, for widespreaddepartment tension use a corporate change/critical intervention consultant. . Walk around the organization. Swap stories with employees onthe work floor, be come a bridge between management andemployees. This rotation of different hats h elps fireproof life with variety. . Juggle various roles and responsibilities to promote autonomyby setting bounda ries. Delegate work wherever possible. Trainemployees and supervisors on HR-rela ted procedures. Allow 21

vital interdependence between HR and employees; for instance, install a dartboard on a back wall for fun and competition. . Organize productive team meetings for sharing a logisticallyand emotionally de manding workload. Build a fifteen-minute wavelength segment for group brainstorming and venting emotionally tough personnel issues -dealing with pink slips, reorganization uncertainty, battles with other departments, and cultural diversity tensions. Let team members acknowledge sources of work pressure as a group, assess thestrengths and roadblo cks affecting solid team coordination andcooperation. . Listen to your family and friends as they know you best, and are often the first to tell you that you are stressed. Their insight may reveal situations or incidents that you weren't aware of-such as consistently being short-tempered with one or other family members. Seek their support to help ease workload, which in turn will help reduce your "stress load." . Avoid being an over-achiever. Doing everything for everybodyall the time can b e rewarding, but it can also be mentally andphysically draining. Seems the more you do, there's alwaysmore that has to be done-often without support from others . . Learn to say no. If you find that you're being asked to do morethan you can ma nage-whether physically, emotionally or financially-learn to set boundaries and remember that "no" is acomplete sentence . De-stressing at work Practicing regular stress management is good for long run. But, practicing preventive stress management helps in improving qualityof life. "Everybody reacts to stress in different ways and even deals with it differently," says Dr. Fatema Saeed, a practisingphysiotherapist. Descri bing how exercises can help de-stress, shesays, "Moderate to intense aerobic exe rcise for longer durations andresistance training protocols of longer duration, lighter resistanceand longer interest rest intervals, cause the greatest release of endogenous opioids (stress-busting or "feel good hormones") in thebloodstream an d hence, help in relieving stress. This secretion increases pain tolerance, improves appetite control and reduces anxiety, tension, anger and confusion. Also, with regular exercise, 22

the individual becomes more sensitive to the opioid effects so that ittakes less of the hormone to induce a specific effect." Therefore, apart from improving physical fitness and overall health, regularphysical exerci se also has psychological benefits. There can be no one solution. Everyone needs to find their ownways of beating st ress. Coaching for productivity Due to changing demographics of the world such as more competition and the introduction of new technologies, organizationsare discoveri ng that traditional tactics of management are no longerenough to remain competit ive. As such, coaching is becoming to berecognized and practiced as an effective tool to increase morale, performance and the bottom line through the success of each individual associate. For example studies show that about 90% ofemployees who re ceived their job performance and professionalsuccess. In organizations where coa ching is effectively practiced asa management style, the bottom line performance is two to threetimes better than the traditional command-and control type oforga nizations. Furthermore, it has been proven that employeecommitment increases whe n there is strong, positive relationshipbetween management and his/ her employee s. These types of relationship are developed best as a result of effective coaching. Coaching can be productive, expansive and costly simultaneously. Since most employees will not be able to hire personal coaches, human resources professionals and managersshould act as coache s to their employees in the organization. Effective relationship oriented coaching creates more knowledgeable and competent employees, reduces errors and rework and it greatly assists in bringing new changes to the culture. Effective coaching skills make a manager s job easier as it enablesgreater delegat ion leaving him/her time to take on bigger projects. Itbuilds the manger s reputat ion as a developer of people while increasing productivity since everyone will know the expectationsand the fact wh at they do matters. It can also develop trust and agood relationship between man agers and employees. Last but notthe least, good coaching skills can increase cr eativity, innovation, morale and teamwork since everyone will feel safe working in aninclusive environ ment. Simply stated, coaching is about developing a trusting relationship with your people so you can jointly clarify expectations and departmental goals thereby leading to specific action plans for 23

their achievement. As such, there are many situations where coaching skills will be very effective and the following list presents some of them: . Reinforcing good performance. . Motivating employees to new heights and peak performancelevels. . Orienting new employees into the department or organization. . Providing new knowledge to individuals about changes and tactics. . Training a new skill for a new task that needs performing. . Explaining the current or new standards and how they can beachieved. . Setting priorities for effective time management with those employees who need it. . Increasing the self confidence of employees about the task ornew responsibilit ies and challenges. . Conducting a performance review. Coaching is not innate skill but rather it is learned. It occurs through one s life personally and professionally. From this perspective, coaching is and it can be one of the most importantfunctions manage rs perform because it communicates performancelevels, expectations, and the impo rtance of the tasks and responsibilities and it communicates a caring attitude. 4. The Return on Recognition in a Recession People management is a Key Result Area in delivering success fora business unit during the downturn. It is obvious to adopt lay off as a strategy in achieving the cost minimization strategy. But alternatives such as seeking voluntary reduction in salaries and incentives, flexible work hours and improvement in productivity areworth enough to try during the slowdown. These strategies reducethe costs besides improving t he efficiency of the organization. Every year, PricewaterhouseCoopers (PwC) launches its GlobalCEO Survey during th e World Economic Forum s annual meeting inDavos, Switzerland. The survey, PwC says in its introduction to the2008 edition, examines how CEOs perceive the business environment in which they operate and how an increasingly connected world affects the way their companies function and achieve success. This year s survey says: At present, CEO confidence is at anall-time low. Worldwide , just 21 per cent of CEOs say that they areconfident about revenue growth in th e next 12 months, down from50 per cent in last year s Global Annual Survey. Pessim ism prevails 24

across all geographic regions, business sectors and levels of economic development. In these tough economic conditions, there are many reasons tosuggest that if the human element was responsible for plungingcompanies and the world into this dee p financial crisis, then thehuman resources of an organization are also perhaps the best bet tohelp it emerge out of the same. And this is the reason why expert sview this period of economic recession as an opportunity for HRmanagement rathe r than a crisis. The declining state of the global economy, layoffs, bankruptcies, the credit crunch the headlines are impossible to ignore. Companies across industries and around the world are dealing with similar complex challenges due to the ailing economy. Now is not the time for employees to give in to fear and not work ashard because they believe they will not be recognized for their efforts. But how do company leaders address these employeeconcerns while remaini ng fiscally responsible, encouraging greaterproductivity and sustaining growth? Strategic employee recognition programs reaffirm employeesin the value of their contributions, acknowledge the additional workand effort they are being asked to perform, and allay rumors through frequently updated executive messages. Human Resourcesleaders can actual ly deliver savings to the bottom line through aproperly deployed strategic recog nition program while simultaneously boosting morale and productivity. As Judy Bardwicksaid in Psychol ogical Recession, Chronically fearful people are tooexhausted to be creative and innovative. They expect the worst tohappen, so they see no reason to give their all. Power of Recognition in a Recession Recognition helps people to be resilient. Businesses rightnow...they re trying to s urvive. And to survive you ve got to havesome psychological resilience. You ve got t o have employees whoare positive despite the negative situations around them.... I wouldargue that recognition is even more important in times like this. Jim Harter, Gallup, October 2008News articles and research studies from firms in cluding Gallup, Deloitte, Towers Perrin and many others confirm three common issues among employees in this recessionary economy: 1) Survivor s guilt Those remaining on the payroll after a round oflayoffs often f eel guilty about surviving the ax. This guilt distractsthem from the task at han d. These employees typically need additional reinforcement of the value of their work to help themjustify their st atus in the group. 25

2) More work, less motivation The survivors are also paying closeattention to ho w management handles the layoff and subsequentredistribution of the work. With m ore tasks on each employee s desk, managers need a way to encourage strong individual performance while reinforcing priorities based on ultimate corporatestrategic ob jectives. 3) Rampant rumor mill The inevitable rumors of additional layoffsor restructurin g further contributes to productivity and motivationchallenges. Teams often suff er the most with rumors fuelingbackstabbing and protection of individual tasks o ver team goals. A recessionary economy is precisely when companies need to get the most productivity out of fewer employees, however. Company leaders are struggling with how to accomplish this whenannual or perform ance bonuses and even pay increases are no longer in the budget. Roughly half of the HR executives from several hundred firms who responded to a Society for Human Resources Management(SHRM) November 2008 su rvey reported wage freezes and bonusescuts were likely in response to the downtu rn. A similar study byTowers Perrin found nearly half of the 450 companies surve yed arelikely to cut spending on pay and merit increases while 39 percentplan to cut annual bonuses and other cash incentives. At a fraction of the cost of cash compensation and bonuses, strategic recognition targets each of these challenges with mechanisms to acknowledge and reward performance, personalachievement, and team successes. The recognition program shouldalso be used to reiterate core company messages such as key goalsand the mission to keep staff focused on achievable ta rgets. By using the tool to encourage team members in a stressful time, company leaders communicate clearly their commitment to the wellbeing and future of the employees. Deployed correctly, strategicrecognition programs also become a scorecard for executives onincreased productivity and the factors that are specifically drivingthat increase. Savings through Proper Program Deployment Most companies are already investing significantly in an incentive orrecognition program of some sort, but the majority of those programs are disparate, unfocused and do not deliver the full returnon investmen t possible with strategic recognition. Simply by consolidating multiple disparate programs into oneand implementing eff icient global administration, companies are able to achieve tremendous savings on their current investment in 26

recognition. Globoforce s strategic recognition programs take the buried and distributed budget of multiple legacy initiatives, consolidate it into a single global program, track it, and provideexecutives wit h reports on the value of the program across the corporation. These strategic recognition programs reduce the budget spenton recognition throu gh a Zero Budget Impact and Net Cost Savings structure. This is possible by consolidating the various overhead expenses of multiple programs and implementing features to moreeffectively inves t the budget allocated to recognition. Now executives can track spend in all divisions and groups and compareto the results achieved in terms of productivity, demonstration ofcorporate values, and achiev ement of strategic objectives. Strategic employee recognition ensures: Budget spend is primarily invested in employees and not onmultiple local adminis trators. Fully automated and integrated processes reduce the costsassociated with data en try and errors. Cost savings and program enforcement through global corporategovernance, tax com pliance, and program measurement and management. The Problem with Cash-based Incentives With the cash bonus and annual compensation increase pool dryingup and employees on a cash incentive performance track no longerable to meet those performance g oals, many employees are choosing to not work as hard because their goals (and accompanying incentives) are out of reach. Yet many companiescontinue to rely on cash-based recognition programs, which neithermaintain program consistency on a global scale nor ensure localparticipants feel motivated and involved in the or ganization. Additionally, people become habituated to cash no matter how much you give them, viewing it as an entitlement. An August 2008study found that in eight of nine tasks, the promise of a biggerbonus actually significantly dec reased people s performance. Non-cash recognition programs save money by reducingmanual intervention and elim inating the paper chase while also creating a positive work environment where employees see that best practices, strong ethics and exceptional performance are recognized and rewarded consistently, openly and fairly an environment that encourages loyalty, commitment and honesty ofeffort. It is this kind of environment that drives greater morale andproductivity when company lea ders need it most. 27

Strategic recognition programs: Drive productivity and morale by giving far more frequent awardsto far more empl oyees. Use non-cash recognition, which produces twice the performanceboost as cash. Offer a hard, predictable budget to manage against. Become a scorecard for executives on increased productivity As companies tighten their belts during tough times, it s important to remember that money isn t always what matters most to employees. When it comes to encouraging employees to pourdiscretionary effort in to their work, the chance to make a differenceand be recognized for their contri butions can provide a much stronger incentive. Unfortunately, only 49% of non-managementemployees report th at their contributions are recognized by theircompany when they perform well. Hay Group Insight, September2008 The Problem with Merchandise Rewards During the 20th century, many companies added a catalogbased merchandise rewards program to their cash bonus plans. However, this century old method offers no bottom-line savings onrecognition bud gets. These programs typically include 30% markup on their products with unpredictable and very costly shipping, handling, customs and duties fees. These programs deliver even lesson a global s cale where companies tend to spend 10-40% more onawards to employees in countrie s with a lower standard of living, inequitably awarding them more than their colleagues and certainlymore than was intended. Gift-card based strategic recognition programs give rewardrecipients the key to countless shopping, dining, entertainment andtravel adventures. With set shippin g fees, the gift-card model alsofrees human resources managers from tracking glo bal shipping fees, customs and duties laws while giving them a hard, predictable budget to show to senior executives. Benefits of Strategic Recognition in a Recession Companies who implement a strategic recognition program ina recession can boost morale, increase productivity, realize savingsand gain competitive advantage. Boost Morale Strategic employee recognition programs reaffirm employeesin the value of their contributions, acknowledge the additional workand effort they are being asked to perform, and allay rumors through frequently updated executive messages. By using the tool 28

to frequently recognize and encourage team members in a stressfultime, company l eaders communicate clearly their commitment tothe wellbeing and future of the em ployees. Increase Productivity Strategic recognition acknowledges and rewards individual performance, personal achievement, and team successes. By tyingevery recognition to a company value demonstrated or strategicobjective contributed to, employees begin to see how their effortsdirectly impact company success, giving them mean ing and purpose. This recognition reinforces and increases repetition of precisely those actions and efforts the company needs from employees to succeed. Deployed correctly, strategic recognition programs also become a scorecard for executives on increased productivity and what factors are specifically driving that increase. Realize Savings Consolidating multiple disparate programs into one comprehensive, compliant and governable program saves 50-70% ofa company s current investment in tactical recognition and incentiveefforts. Company leaders also r ealize cost savings through global corporate program governance, tax compliance, and programmeasurement and managem ent. Studies show non-cash recognitionproduces twice the performance boost as ca sh with praising employees saying thank you equal to a 1 percent increase in pay. Gain Competitive Advantage Companies implementing a strategic employee recognition program during recessionary times position themselves to outperform the competition today and when the economy turns. Perform at a higher level today and rebound quickly in the upturn byhaving the r ight people in the right jobs and by fostering a culture ofappreciation key tale nt will want to be part of over the long term. Partner with the CFO to deliver program savings and increase productivity by creating a marked difference in the morale and focusof your empl oyees over the competition. I. The strategy adopted by HR personnel to deal with these challenges. The recession is an opportunity for HR professionals to stepand contribute strat egically. In the classical strategy paradigm, webegin by looking at the macro-ec onomic environment. Then we look 29

at the micro-environment -what affects us and our competitors. Next, we establish which strategic factors HR influences directly. Finally, we drop down to our tactics. The recession is about the creative Human Resources Management. The HRM Function is askedto bring new ideas , to change the HRM Processes and to develop orchange the procedures. And this e ffort has to be cheap or it has tocut the costs of the organization. The HRM Inn ovation is easy intimes of the business growth, but the recession is not good fo r biginnovative HRM Initiatives. Dave Gartenberg, Director HR of Microsoft UK, reportedly said recently: In turbulent times more than any other, there is not only the opportunity but the need for HR to provide leadership to the business. The ability to attract and retain workers when times are really tough requires leaders to be at their best. Many feel that issuing pink-slips and managing layoffs are the biggest challenges that HR faces today; but there is far less wisdom in this belief because the real challenge that confronts corporate HR today is to utilize this period of recession as an opportunity. .Finding opportunities during recession. i. Consolidate workforce: Workforce consolidation is a huge opportunity that any organisation has nowadays. This is not only in terms of having a leaner workforce, but also in redeployment of the workforce to improve utilisation and efficiency. ii. Streamline salaries: For the past few years most industries have seen above-normal salary hikes due to the pressure of retention. In fact, India Inc recorded the steepest salary hikes in Asia for seven years running till 2008, according to Hewitt Associates. But the recession has changed things dramatically. Salary freezes and pay cuts have suddenly become the order of the day. The 13th annual Salary Increase Survey conducted across 480 companies by Hewitt Associates shows that salary increase projections for 2009 in India have dipped to 8.2 per cent from an actual increase of 13.3 per cent in 2008, but continue to be the highest in the Asia-Pacific region and among the highest globally. 30

According to the company, for the first time in six years, India will see single digit salary increases. Importantly, the data for the survey was collected from December 2008 to January 2009 and Hewitt expects that the salary increase projections may fall even further in coming months. Hence, this period can be viewed as an opportunity to streamline salaries and cut costs. iii. Make organizations more performance-centric: The recession has forced organizations to take a close look at the workforce and identify the real performers. The non-performers have either found their way out of the organization or have been put on a short notice to deliver or perish . iv. Identify real talent: The renewed strict focus on performance alone for survival in organisations has not only exposed low-and non-performers, but has also brought to the fore real talent in the organization. v. Develop talent as leaders: A recession is the right time to wisely invest in the development of talent, both in terms of skill sets and in the form of future leaders. The focus has to be on how much they are investing in their employees and what skill sets they will need to grow their businesses in the future. vi. Review and restructure policies: The mad pace of hiring, training and appraising seems to have come to a screeching halt. And if not to a complete full stop, the rate is low and slow. This also gives HR the time to revisit its policies, compare them with the best-in-class practices and restructure them for maximum effectiveness in the present and the future. vii. Build employer brand: Despite the fact that many companies have put a freeze on hiring, both hiring talented people and retaining them will continue to be a challenge for HR. Hence, keeping the employer brand intact and re-building the same could have a cascading impact later. viii.Communicate and build trust and morale: Communicating with employees not only remains one of the greatest needs of HR, but is also an opportunity to build the trust and morale of people during tough times. It is vital for HR to see that the morale of employees does not sag while the organization is sailing through rough waters. . How to intact your employee during recession: 31

Here is how to keep your employees with you and away from yourcompetitors during tough economic times. Differentiate Between Your Good and Average Employees Redirect Your Employees to Other Departments (Job Rotation) Listen to Your Employees Keep Them Motivated and Busy (Communicate-Communicateand Communicate) Show them the long term vision The above steps will enable the employer to hold its team together during a recession, and will even make bond between all of you stronger. Employees should be motivated enough to stick to the employer during tough times and put in the extra effort required for the organization growth. . HRM Innovations in Recession The recession is about the creative Human Resources Management. The HRM Function is asked to bring new ideas, to change the HRM Processes and to develop or change the procedures. And this effort has to be cheap or it has to cut the costsof the org anization. The HRM Innovation is easy in times of thebusiness growth, but the re cession is not good for big innovativeHRM Initiatives. On the other hand, the top management understands the effort to innovate the HRM Processes better. The top management isin the search for the potential cost savings and they count everysingle penny brought by the l ine management. The HRM Costs areusually a very significant cost to the organiza tion and the HRM Function has to be proactive. The HRM Function has to focus on unpopular innovations during the recession as the role of Human Resources during therecession is to sa ve money to the organization. The topmanagement expects all the support function s to bring innovativesolutions, which will have to make the organization stronge r, whenthe next growth era comes. The HRM Innovation during the recession has to focus on the following topics: . Reduce the number of employees in the organization . Strategic initiatives to increase the productivity and efficiency ofthe whole organization . Redesign of the compensation scheme 32

. Cancellation of several benefit schemes On the other hand the HRM Function has to find innovative solutions for the following topics: . Identifying the real key employees and to keep them in the organization . Identifying the real top potentials and to strengthen their development program The second two topics have to be done with the minimum additional costs and it is a really hard task to accomplish. The HRMFunction has to have priorities in mind and the strategic impact ofthe HRM Innovations in th e recession time. The role of the HRM Function is not to cut the costs for the time being, but to make theorganization stronger and ready for the future growth. As a leader and strategic partner in your organization, you have the tools to assist your company in surviving and thriving through these difficult times. First you need to start thinking strategically . How can the organization make effective and economical changesthat will help thr ough these difficult times? What can I do to minimize our organization s risk for fines, violations and/or unnecessary legal proceedings? Following area should be looked upon: The point has to be focused by HR management during recessionare as follows: To optimize the manpower strength. To take strategic initiatives to increase the productivity and efficiency of the entire organization. To work on compensation benefits. Redesign training and development programs. Ensure your organization s policies and handbooks are up to date. Remember that an annual review of your employee handbook for compliance by an experienced professional is highly recommended. Also, each employee having a copy of the employee handbook is not enough. They have to be able to read and understand the content. Be sure that you provide 33

employees a handbook in a language they can read and understand. Layoffs are never easy. Ensure you are familiar with your legal responsibilities in a lay off to minimize your organization's risk. Be sure that you have properly defined the criteria you are using to determine who will be let go. Alternative Workweek Schedules and Flexible Scheduling can maximize production and cut-back on overhead costs for organizations. Be sure you follow all of the DLSE rules when deciding if an Alternative Workweek Schedule or Flexible Scheduling is right for your organization. Cutting Pay may be an option to consider to save on today s costs. Is this really an option for your organization? How are your pay scales as related to the market? Are you willing to risk losing key employees whose talents may be needed by other organizations, because you chose to reduce their pay at this time? Remember, you should not cut pay without a recovering strategy of how you will re-adjust when the economy has turned. Downsizing does require internal document maintenance for your organization. As jobs are modified and responsibilities are increased changes also must be made to your job descriptions. Offer Professional Development as a reward or incentive to employees for performance and hitting goals. Professional Development courses are an economical way to reward employees with the gift of education and skills they will use throughout their lifetime. 34

 Downsizing does require internal document maintenance for your organization. As jobs are modified and responsibilities are increased changes also must be made to your job descriptions. Remember that the law is very specific on what positions can be considered Salaried Exempt and what constitutes an Independent Contractor. Looking at adjusting your staff to fit into one of these two categories is NEVER the answer when trying to save money. . Situational Leadership style during recession During recession, H R manager has to act as a democratic leader. He should also try to combine the organizational and employeesinterest and adopt situational leadership style as well as humanisticapproach for leading the empl oyees to achieve the organization goals. Following are few recommendations for H R Manager to dealwith employees d uring recession: 1. Top management should know the contingency plan. 2. Do the brainstorming session with your top management andcontribute in their strategic planning. 3. A complete or partial job freeze, however, communicate to the workforce that the company many continue to recruit key individualseven in diffi cult times 4. Review the employee performance evaluations to determine the key people that company cannot afford to lose. 5. Flow of Communicate should be from top to down that willhelp in making conduc ive atmosphere within the organization 6. Make prepare yourself for individual and group concerns therefore there should be a proper counseling session. 7. To maintain a calm atmosphere 8. Review all HR policies, processes and procedures to ensure that they are purposeful and contribute directly to the success of the company. 9. Suppose the company has to lay-off staffs ensure that there areno other oppor tunities for them in other functions or divisions of theorganization. 10. Advise managers to deal the process of managing change. Managing Human Resources (HR) in a difficult economic environment is even more demanding than working in times of rapid 35

growth. Therefore the task of HR is very important to maintain equilibrium throughout the hierarchy. CONCLUSION To sum up we can say that the global financial recession whichstarted off as a s ub-prime crisis of USA has brought all nations including India into its fold. The GDP growth rate which was aroundnine per cent over the last four years has slowed since the last quarter of 2008 owing to deceleration in employment, exportimport, tax-GDP ratio, reduction in capital inflows and significantoutflows due to economic slowdown. In India, the impact of the crisishas been deeper than wha t was estimated by our policy makersalthough it is less severe than in other eme rging market economies. Since humans are an organization's greatest assets; without them, everyday business functions such as managing cash flow, making business transactions, communicating through all forms ofmedia, and deali ng with customers could not be completed. So when we are discussing the topic of recession and recovery from recession, Human Resources Management plays a very vital role. Human Resource Management must be able to address theright kind of demands relat ed to Human Resource functions duringthe recession. Human Resource Management mu st play a highly proactive role in managing the issues of global recession by helping organization to enhance their abilities to learn and collaborates, manage diversity, ambiguity and complexity. Human Resource Management is responsible to manage the human resource of thecorporate to maximi ze the productivity, efficiency at minimal costand maximize profit. During this global recession, Human ResourceManagement is facing the many challenges and cha nges in organizational level, workplace and HR department level itself. Thechallenges ca n be faced by HR Managers effectively if proper strategies are implemented. The recession is the temporaryeconomic climate of th e business world. It will be changed through 36

more productivity at minimal cost and maximize profit at moderateprice of produc ts in business. BIBLIOGRAPHY 1. Economics and Political Weekly Journal. 2. International Labour Office (ILO), Global Wage Report 2008/09 3. Choudhari 2008, HRM Journal. 4. Mujtaba, 2008, HRM Journal 5. Kathleen Patterson & Gray Oster, HRM Journal 6. Elango R, Chief Human Resources Officer, Mphasis. 7. Global Wages Report 2009. 8. DK Srivastav Global Head, HR, HCL. HRM Journals 9. Government Of India official website. 10.ILO website. 11. Human Resources Management, -Diwedi. 37