Health of HR at an MSMEs

Sumeet Varghese | October 09,2014 11:38 am IST

Training and development

Training appears to be largely limited to product sales and service training.

There is no evidence of any technical or behavioral training that can help augment the skill level of employees in various functions.


Performance management

1. The company has a practice of appraising employees annually. However, the format appears to be different for various divisions.

2. In the various interactions had so far, no evidence of such a concerted performance strategy has been found.


Compensation & benefits

1. The company has a practice of following timely payments and provides various employee benefits. However, the manner in which Payroll is administered vis-à-vis permanent and temporary employees is not very clear.

2. In most interactions, the policy of granting incentives across various divisions appears to be quite arbitrary leading to employee dissatisfaction

3. At this stage the linkage between performance and incentive appears to be clear for some divisions but the way in which the incentive scheme/ program is administered is not transparent


Succession planning & career pathing

1. Whereas there is a clear Career Pathing option for some divisions, it may be non-existent in others.

2. In the absence of any clarity on where an employee's career is headed internally, the company is likely to have retention challenges. For most employees retainability appears to hinge around the Compensation & Benefits piece.


Employee relations

1. Despite the absence of a centralized HR Department to take care of employee concerns and grievances, Employee Relations seem to be largely positive and devoid of any litigation.

2. Some divisions clearly lamented the fact that basic employee hygiene issues pertaining to leaves and attendance have been the source of employee dissatisfaction.


Human Resource Information Systems
1. Employee Records appear to be in primitive shape. Critical employeespecific information pertaining to the various HR Processes is virtually nonexistent.
2. Vital Organizational Policies and Procedures pertaining to Employees that are usually documented and made available in Employee Handbook format have not been documented. It is possible that in the absence of stated Policies and Procedures, employees follow an unstated Code of Conduct.

3. While in many MSMEs actual challenges with the HR function may vary, it is quite likely that in the absence of a consolidated and integrated HR architecture and strategy linked to the business strategy, some of the realities documented above may come to haunt especially mid-sized or large MSMEs. In such instances, a complete check-up of the HR action is really critical to arriving at the diagnosis and prognosis for HR issues.





Sumeet Varghese is an independent management consultant....