,

HRM Case

An incident that reflects some of the problems faced by organizations and

individuals in HRM

An assignment submitted to Prof. N. M. Agrawal towards the partial completion of the

course on Human Resource Management as part of the 5th quarter of the PGSEM
program. The names used in the case have been changed for anonymity.

Ribha Mehrotra (2004139), Senior Applications Engineer

Sudha Anubhav (2004151), Associate Project Manager

Indian Institute of Management, Bangalore

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 Alok

Alok stood on the rooftop of his five-storied office building watching the Bangalore skyline
and trying to recollect how wonderful his first three and a half years in the organization
had been. At present he was restless, wondering what had gone wrong in the last year and
a half. He had just had an argument with his senior manager, Manish, regarding the
timelines in which the current project could be delivered. The argument had got so heated
that Manish had spoken rudely to him and indirectly hinted at getting somebody else to
lead the team.

Alok had joined Zentex Technologies, a California based startup, directly after completing
his graduation in Computer Sciences and Engineering from IIT Mumbai five years ago.
Being highly ambitious and carrying with him the excitement of joining a small
organization, Alok had reached Zentex Technologies in Santa Clara in sunny California.
Over the next year and half, he had surpassed all expectations, and had grown from
possessing mere educational knowledge to commanding an excellent technical know-how
of the company’s software product. He had outperformed all his peers in the performance
appraisals. The company had given him a big salary hike and a bonus. He had achieved
the title of “problem solver” among the ten-strong engineering team and he took pride in
it. Zentex had been running on a shoestring budget and after year and a half of its starting,
its founders decided to start an offshore division in Bangalore, the Indian Silicon Valley.
The decision was taken mainly because they had struck a deal with a big client and had
desperate needs to expand.

Alok, being a smart kid, was chosen to go to Bangalore along with Ashish, one of the senior
managers in Zentex, to set up the local office. Ashish was to mainly handle the operational
aspects of getting the division setup and Alok was to lead a fifteen member team to work
on the new project that had just kicked off. Alok had perceived this to be a great
breakthrough and was determined to work even harder and make the project a success. He
had put in 14 to16 hours a day and again managed to outperform his peers, despite working
in a new environment and having additional responsibilities of ramping up the Bangalore

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team, recruiting more people and helping Ashish in stabilizing the new office. In all, Alok
showed great leadership and managerial skills and truly impressed his bosses back in
California. Alok stayed back after Ashish left and continued leading the Indian technical
team. He was exhilarated and extremely happy whenever he thought of the responsibility
he had been entrusted with by his organization. He was a part of all the decisions that were
made by the management for the Indian sub-division. Not only had he become strong in
the technical aspects of the company’s software product, but had also started participating
in management meetings and providing inputs to the senior management regarding
decisions about the Bangalore division. He felt a great bond with the Bangalore office and
a sense of having played a great role in its success. Indeed, Alok had achieved a lot in a
very short time.

Once the Indian office was working smoothly and a few senior managers had been hired,
Alok went back to the US office. After a small six months stint in the US office, he decided
to come back to Bangalore as all engineering activity had shifted completely to India.
Bangalore was where all the technical action was and Alok decided to return to what he
thought he did the best. During the same time, Zentex struck the biggest deal of its lifetime
and had decided to further expand the Bangalore team.

Over the next year and a half, the Indian office grew from thirty to a mind-boggling number
of eight hundred. Even the founders of the company had not thought that they would have
to grow at such a rapid rate. The fast growth brought with it a large number of
organizational restructurings. The Indian office now had a solution center head, a large
number of senior managers and project leads. The organization was also struggling to
become more stable now, to define some processes and enable itself to deliver the projects
on a more predictable basis. The customer base had increased from three to ten and there
were a lot of teams working on different projects in different technologies. Although
everyone knew Alok and held him in great regard when he had been here earlier, now he
was a stranger in the office he had himself helped set up. He felt a little lost and missed the
energetic and informal office atmosphere he had left behind. In any case, he went back to
leading a team of 20-25 developers and stared working with enthusiasm on the new project.

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Sadly, things were not the same any longer. With new people, especially at the managerial
level, came lot of new ideas – some good and some bad. Every now and then, sudden policy
changes were announced or sudden process changes were implemented. Although this was
expected in a growing company, what hurt Alok was that he was no longer a part of the
decision making process. Alok felt that this was because he was still considerably
inexperienced compared to the new hires and despite having proved his leadership abilities
earlier, he was being sidelined now. With the growth, a lot of politics had also started in
the company, which Alok detested. He wanted the company to do good work and win big
customers, but not everyone around him shared his passion. He felt that the new managers
were only interested in getting all the credit for all that is good and in making a place for
themselves in the company. Most of his colleagues and good friends had left the
organization to pursue either higher studies or to join other organizations. He felt left out
of meetings and discussions, and thought he could have added value to the process of
decision-making. He perceived that he was constantly refuted in the discussions he was
invited to. He just had one consolation, that the old timers, i.e., his US bosses, who were
still with the organization still had faith in him and his opinion was always listened to and
considered by them. But since all of them were in California, it was seldom that he got a
chance to have a good interaction with them. He felt really happy and comfortable
whenever some of them were around in Bangalore.

Just before Alok started to think about all this, he and his senior manager Manish were
making the project plan for the ongoing project. While making the timelines, they were
discussing as to how long it would take for a module team of five to complete the job.
There was a difference of almost a factor of three in the effort Alok had estimated as
compared to what Manish wanted. Manish was upset by the timelines and was worried
about his individual performance as he had already committed tighter deadlines to the
upper management without consulting Alok. Manish was trying to pressurize Alok to see
if by working longer hours or by reducing some testing and documentation, the time could
be reduced by half of what Alok had estimated. Alok, on the other hand, was convinced
about how a good project should be implemented and was trying to explain to Manish that
it would be bad if they delivered the project by taking shortcuts. Manish got angry and
accused Alok that he and his team were inefficient in delivering and that in his past

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organization they used to complete such assignments in much shorter duration. The
argument finally got resolved by Manish forcing an intermediate timeline and asking Alok
to do whatever it took to finish it by that time. Manish also mentioned that he would need
to have a word with the US management to convince them and explain to them the current
“inefficiencies” that the Bangalore division operated with.

Alok was now troubled by these new developments and his monotonous work life with
little growth. Over the past six months, he had faced many such situations and was trying
to figure out what it was that really went wrong. Did he commit a mistake by coming to
the Bangalore office? Should he go back to the US office and start looking after the non-
engineering activities like sales and marketing? Should he leave the organization and join
a new one and if so should he join a startup or an already well-established organization?
Should he directly talk to some of the upper management and explain to them his concerns
and issues? Would that really help?

These are some of the questions that were running in Alok’s head as he finished his cup of
tea and started walking back to his seat to tackle the immediate problem of bringing down
the project timelines.

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 CASE ANALYSIS

Background

Although presented from the point of view of a single individual, the case highlights
some of the typical human resource problems faced by mid-size organizations in a phase
of rapid growth. When a company crosses the magic number of one hundred employees
and begins to grow towards another milestone number of one thousand, the attention of the
founders and the senior managerial team is more on securing the future of the company
and keeping the customers happy. The human resource processes and structures do not
keep the same pace of growth and take a back seat, causing a point of extreme employee
dissatisfaction, mistrust and a high attrition rate. In such cases the problem may be further
enhanced for the old employees who had contributed immensely in the initial success of
the organization. The decision to leave the company is a tough one for such employees, but
at the same time they feel tied down and restricted in growth opportunities in the new
organizational culture. The case presents the problems from the perspective of Alok who
had started his career with a start up which went on to grow to a mid-size company in a
short span.

HR problems in mid-size organizations

One of the main problems that Alok faces in the case is the loss of his sense of
autonomy and the power of decision-making. A small company operates in a very informal
atmosphere and there are no rigid hierarchies. There is a lot of open interaction and

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employees are encouraged to take their own decisions pertaining to day-to-day project
related activities. This is especially true for IT related start-ups where employees can
interact on a daily basis with the CEO and are entrusted with big responsibilities even at
the start of their career. A gifted individual has opportunities to grow at a much higher rate
as compared to bigger organizations because merit gets acknowledged and rewarded more
easily in the informal set up of a start up. This is exactly what happened to Alok. But as the
company grew and new senior managers were hired, formal designations, industry
experience and hierarchies became more important and the true capabilities of an individual
became secondary to some extent. The feeling of being wronged is more pronounced in the
case of a mid-size organization, as it is mid-way in its process of defining the hierarchies
and organization structure. In a large organization, rigid hierarchies and loss of autonomy
is somewhat taken for granted but in a mid-size organization where things are not stable,
employees expect more freedom and autonomy due to the more uncertain environment.

The second crisis Alok faces in his current position is the fact that he has been
continuing on his current role for quite some time. He had been used to a challenging work
atmosphere but with the sudden growth of the company, a lot of managerial work that he
was used to doing earlier has been taken away from him. The growth in his career has
slowed down a bit, which is normal under the given circumstances but disturbing from
Alok’s point of view. The easy interaction opportunities with the senior management that
he had access to in the U.S. office are also no longer available and he is unable to discuss
his career path with anyone.

Although politics is an integral part of any work culture with a sizeable population,
the problems related to politics in a rapidly growing organization are unique. In an
atmosphere where no well-defined processes exist, there is bound to be some confusion
and arguments over the right way of doing things. A large number of new hires at the senior
level aggravate the problem, as each person wants to make his/her own reputation and place
in the new company by pushing his/her idea of the “right” approach. The problems of
favoritism, taking credit for work one didn't do and not giving credit to those who did,
slowly start becoming a daily reality.

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Measures to alleviate HR problems in mid-size organizations

Small and medium-sized companies occasionally need high-level HR expertise but

do not always have the time, staff and budget to handle complicated human resource issues.
But ignoring these problems is not the solution. Somewhere the people assets need to be
aligned with the corporate goals for satisfying customer and sustaining growth. Especially
in a high growth environments and uncertain environments, if employees do not feel
engaged, empowered and appreciated, they lose the determination to drive the business
forward. The organization should take steps to tackle human resource problems from the
very beginning and not leave it for a later time when the employees start quitting. This is
exactly what is happening with Alok, who is not getting a chance to show his true potential
and is slowly getting the feeling of being overshadowed. The founders and the old-time
senior management of the organization in such cases need to take an active interest in such
matters and act as a proxy for the HR department till an effective HR department becomes
functional within the organization.

First and foremost, the organization should take care to educate the old employees
about the changes that rapid growth will bring with it. The existing employees should be
made part of the decisions or at least be informed about all changes in organization
structure, role changes, reporting hierarchies and processes. A conscious understanding of
expected changes will dilute the ill effects and also enable the old employees to be better
equipped to tackle the new environment. In the case of Alok, he would have been better
able to make his choices regarding a suitable role and would have taken care from the
beginning to not get trapped in the politics of new managers. On his own too, Alok should
take some initiative in understanding the changed atmosphere of the company and should
make attempts to assimilate and adapt to the new environment. Rather than blaming the

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processes and the circumstances for his plight, Alok should see how best he can survive
the new challenges faced by him.

Defining new hierarchies, structures and processes is inevitable with growth but the
organization should take care that the transition from the informal to the formal
environment does not undermine the contribution of old employees who are more
passionate about the organization and can still play a big role in its success. For example,
in the case of Alok the senior management should have taken care to give him a role suiting
his earlier achievements and not necessarily suiting his relative inexperience. Hiring new
managers and developing hierarchies should not necessarily imply restricting the growth
opportunities for the people who have showed their capabilities earlier. Also, a person who
has been a part of significant organizational decisions during its struggling phase and has
seen the company grow from a small one room office to a large set up should continue to
be a part of decision making for him/her to remain motivated.

Even in the case of senior management getting too busy with winning new
customers and planning for the future, they should allocate at least some time in developing
the HR policies of the company. Programs like employee focus groups where unfiltered
employee feedback can be received should be started from the beginning to prevent
favoritism and internal politics from becoming a menace. Adopting practices like 360-
degree feedback, employee suggestion systems and service recognition will help the senior
management identify and reward true talent just like in a small startup organization, while
relying on the hierarchical feedback will not. These low cost HR initiatives can help a mid-
size organization to solve some of the human resource problems without investing too
much in this area. What is required is a conscious understanding of the existence of such
problems and the willingness to solve them within the given time and using the available
resources.