The Butterfly Effect - Part 1 – Pharma Veterans’ Blog Post #548 by Asrar Qureshi
The Butterfly Effect – Pharma Veterans’ Blog Post #548 by Asrar Qureshi
Dear Colleagues! This is Pharma Veterans’ Blog Post #548. Pharma Veterans welcome sharing of knowledge and wisdom by Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi on WordPress, the top blog site. Please email to asrar@asrarqureshi.com for publishing your contributions here.
‘Butterfly Effect’ is when an apparently stable, well-performing employee suddenly announces his/her departure from the organization. This phenomenon happens regularly in all organizations. It leads first to confusion as to what happened, and then to questions as to why it happened. The sudden departure of employees certainly impacts an organization’s plans and performance.
All managers have experienced these situations. The more important position an employee sits on, the more loss his/her departure may cause.
Many years ago, I asked my boss, the MD of the firm, as to why he planned so much around people and not the systems. He paused and said, ‘well, the people are more important’. This sentiment is echoed by many seniors and certainly has substance in it. Many a times, projects are taken up just because appropriate human resource(s) is available. In much the same way, projects are deferred due to lack/absence of adequate human resource.
It is a long discussion, and we shall divide it into three parts.
In the first part, we shall try to look at the what the organizations do in Pakistan vis-à-vis human resource/capital. The second part will deal with the factors leading to employee departures. In the third part, we shall take up measures to minimize the butterfly effect.
Human Resource Status in Pakistan
Until Pakistan came into being, the undivided India was ruled by the British. They came as traders and usurped the resources and power through treachery, manipulation, exploitation, and brutality. They considered the human resource here is less than human and treated it in the same way. Even before the British took over, ours was a feudal society. We had monarchs who operated through alliances with a huge network of smaller dynasties. Total subjugation was common running theme for the public. They lived at the mercy and discretion of the local landlord, local ruler, regional ruler, or the ultimate monarch. The British destroyed all such dynasties which did not ally with them. They made a semblance of alliance with the rest which was violated later. This was the status of human resource until less than hundred years ago.
After independence, businesses and government departments started evolving gradually. Our subsistence depended upon agriculture only for a long time. The situation there was similar. Landlord kept all powers and resources and the worker survived at his mercy.
Industrialization took faster pace in the 1960s and has continued since then. Factories were built and large businesses evolved. More enterprising entrepreneurs ventured into international arena and exported their goods and services. Even in the multinational organizations which started business in Pakistan quite early, the concept of human resources was not what it is today. Humans were recognized as resource quite late worldwide. For a long time, land and capital, and later machines, were the only recognized resources. The history of ‘human resource’ is rather recent.
I joined a multinational pharmaceutical company in 1975 and we had a ‘personnel department’ headed by a ‘personnel manager’. The mandate of personnel department was to keep record of all employees, their hiring, compensation, final settlement etc. They had nothing to do with the selection, promotion, increment, and development of staff, it was taken up by the line managers exclusively.
The changes started to occur as the world became a smaller place due to communication. Developments abroad started having influence on local environment also.
Long story short, HR departments now exist in most organizations, though their mandates vary greatly. In many organizations, they are still supposed to do just the record keeping, while more progressive organizations involve HR in multiple ways, six of which may be identified clearly.
1. Selection and Recruitment – basic procedure of screening, interviewing, and hiring of staff
2. Compensation and Benefits – keeping the organization wide compensation and benefits rationalized internally and with the market
3. Talent Acquisition – specific search of specific talent for key positions
4. Talent Retention and Management – creating environments and practice to encourage retention of employees
5. Performance Management – employing standard systems for measuring and enhancing performance
6. Organization Development – overall development of the organization
Not all organizations are asking HR departments to do all these. Various levels of engagement are going on.
This is the summary of our status. In the next part, we shall look at the factors leading to employee departures.
Continued…...
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https://knowledge.insead.edu/strategy/how-the-butterfly-effect-can-harm-firm-performance-17261
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