Employee Engagement

Employee engagement is the hot topic in the world of human resource management and for a good reason. The employee turnover is quite high in comparison to the employee engaged in the company.Is it only giving a cozy and luxurious work environment too the employees ? or is more than that ?
Does the beer and free lunches and other ping pong still fascinates the employees or we need to offer more?
Is it employees look for recognition and free coupons?
I believe that concept of employee engagement in only constrained to providing free services rather than improving the employee experience in the organisation. Engaging the employee in organisation is now a herculean task for an human resource manager and i believe an important too. The  need of an hour is to understand the true essence of the term. John Sylvester- ” Employee Engagement describes when an organization encourages employee to buy in to their goals, ambitions and corporate ethos in a way that will inspire them to want to drive the business forward proactively and generate organisational success”.

Employee engagement is earning the loyalty of the employees and increasing the productivity and job satisfaction bringing meaningful learning and development opportunities to your organisation . I tried to figure out some effective ways to launch learning and development initiative:

  1. Promote in-house mentor-ship and coaching programs.
  2. Make on-line education an employee benefit
  3. Regularly tracing the employee engagement and job satisfaction.
  4. Train new managers to lead, manage and give frequent feedback.
  5. Treat employees like customers.

It is time to improve the employee experience first and then focus on improving the customer satisfaction . As stated by Shep Hyken

“If we constantly exceed the exceptional of employee, they will consistently exceed the expectation of our customers”.

Would love to have discussion. Follow the blog and comment.

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Job Analysis and Job Design – PPT

An handful PPT for each component starting from job analysis to job enrichment. Creates your understanding on core topics of recruitment.

Topics explained in the PPT are from the major function/subject of Human Resource Management Department. This will help you not only summarize and list major topics but also a smart ad quick tips for learning. (** if you cannot see the slide deck below, try this link
Job Analysis PPT)


Please share your doubts in the comments section.

I CHERISH

I actually felt it will be lot easy to talk about the topic which is close to my heart but it turned out to be extremely difficult one to write those moments. OK for my part I want to share an experience today which broke me in pieces, shook me but again gave courage to struggle. It is a story of a girl and her parents who were forced to be a victim of dowry and her pregnant daughter was thrown out of the house because it was the female  infanticide she was living with. We always talk about the amount of pain a girl has to bear when she is the real victim of the sorrow. But the bitter fact is the pain lies equally with the family of the girl. It’s tough to watch the dry eyes of the parents looking for a better life for her daughter. It is hard to raise a hurt little girl to an independent strong mother. It is even harsh when society tries to judge you. The reason told by the society is, you are a WOMAN, unfortunately. But the best part is, in all this chaos in her life, the girl had her family who stood right beside her, a family which is going to be there in all your goods and bad. We were so closely bonded that there wasn’t a micro space of particle. That bonding, love and affection made me strong and helped me raise my voice which is not shivering anymore. Those moments taught me how to handle a broken father, an old mother, a lost sister and raise your new born niece flowering with all the love of a mother. It also taught me that revenge is a waste of energy, all you need to have is good deeds and belief that everything will fall in place.
One thing I do want to mention here before concluding that I wants culprits to be behind bars but till then I can still cherish a new life among my family, I can cherish to be more stronger than I thought I could be .

A women represents a family, a society and an unbreakable idol. Our society still might be full of dirt and black hole but it’s our duty as a woman to behold our dignity and never back down.

To everyone, I expect you to cherish this special power we all have inside to be greater than what we think we are, before someone tries to break you. We all have it in us. When things falling apart, we see ourselves becoming stronger if we just never give up.

Companies Act 2013 & Corporate Governance in India.

This is a research paper in which I have tried to address some major points of amendments in Company Act 2013 and what will be the consequences of this on corporate governance.

Abstract

Purpose: After long stretch of 56 years, the (Indian) Companies Act 1956 is now in the process of being substituted by a new law of Companies Act 2013. The main purpose of this paper to highlight amendments made in the law and its direct/indirect importance for the stakeholders. The paper will cover on beneficiary factors of the Act which covers the stakeholders as well as emphasis conveyed in the Clause 49 of the corporate governance.

Method: Research covers a traditional approach for analyzing journals, papers, interpretation of scholars on the topic. It also analyzes the litigation part of act which deals with principles of law and legal institutions.

Result: Findings of this paper are elementary in nature as the focus of law has shifted from the growth of the company to the benefits of the stakeholders in the company. The government has emphasized more on increasing the foreign investment thus resulting in making a strong reputation of economy in the world’s eye.

Practical Implications: Stakeholders have always been the key focus area of any company. Thus the new law enacted on the companies, not only benefits the people involved at the higher managerial level but also pushes small scale companies in the market towards easy return and benefits.

Originality/Value: The paper attempts to encourage the entrepreneurs with lucid company policy and reaping benefits.

Introduction

Our society is ever changing and evolving with the period of time .We as a human need change in our behavior, style and food and so does our law. The Company Act was enacted in 1956 which enabled companies to be formed by registration, and set out the responsibilities of companies, their directors and secretaries. The Act, 1956 was administered by the Government of India through the Ministry of Corporate Affairs and the Offices of Registrar of Companies etc. Since the Act, 1956 was commenced, it was amended many times as per the need of the economy but the major amendments were made in 1988, 1990, 2000 and 2011.

The 2013 Act introduces some eminent changes in the provisions related to corporate governance, E-Management, Compliance and enforcement, Mergers and Acquisition. There are many new concepts which differentiate a current law from the previous one .The law enforced in 2013 enforces in the composition of board of directors and corporate governance. The need of the hour is to focus on the stakeholders because India is the growing economy. In order to cope up with the international economic scenario, the law needs to remain dynamic and adapt changes in business environment. The two major topics to be discussed is a) Corporate Governance and b) Board of Directors which is Clause 49.

What gets measured gets managed. Adequate disclosure thus ensures good governance. Corporate governance issues not only have its impact on the corporate sector, but are necessary condition for the long term sustainability of the development of the growing economy. The role of corporate governance mechanism in economic growth remained virtually invisible until the East Asian financial crisis (1997-1998). The global financial institution, corporations and global economies, brought with it an indisputable challenge to policy makers and thus called for development and prosecution of competent corporate governance instrument.

This paper attempts to highlight the key changes made in the Companies Act 2013 .We try to figure out the beneficial factors of the amendments along with keeping in mind the current business scenario in India.

THE JOURNEY OF COMPANIES ACT, 2013

2008: Companies Bill, 2008 was introduced on 23rd October 2008 in the Lok Sabha to replace existing Companies Act 1956.

2009: Companies Bill, 2009 was re introduced on 3rd August 2009 in the Lok Sabha. Bill was referred to the Standing Committee on Finance of the Parliament for examination and report.

2010: Report of the Standing Committee on Finance on Companies Bill, 2009 was introduced in the Lok Sabha on 31st August 2010.

2011: Companies Bill 2011 introduced in the Lok Sabha on 14th December 2011.

2012: The Companies Bill, 2012 was introduced and got its assent in the Lok Sabha on 18 December 2012.

2013: Companies Bill, 2012 was passed by the Rajya Sabha on 8th August, 2013. After having received the assent of the President of India on 29 August 2013, it has now become the much awaited Companies Act, 2013.

Literature Review

Evolution

There has been a phenomenal rise among researchers and practitioners to study corporate governance over the past decade. The thought of corporate governance may seem unexplored to some people, yet its origin can be traced back to as early as the 1600’s. At that time, the Court of Directors was the executive body that ran the East India Company on behalf of the Court of Proprietors. This mirrors the modern era of corporate governance (Cadbury, 2002). On the other hand, Hann (2001) diagnosed four origins of corporate governance, which help people advance a better understanding of the terms. In the contemporary times when the corporate sector across the globe was hit by scandals and big companies like Enron, WorldCom bridled with debatable corporate policies collapsed. India too had its share of scam with Satyam being an incident thought to be the first of its kind. Though amendments in the area of corporate governance have been afoot since 1990’s, it was not until the Satyam scandal that exposed flagrant gaps in the governance structure and auditing practices in the country that acted as stimulation for a modern legislation. The Companies Act, 2013 is a move by the government to strengthen the corporate governance skeleton in a country where most of the businesses are characterized by robust shareholding and channeling of funds. The Act revitalizes good governance practices by placing the onus on independent directors to bring oversight in the functioning of the Board and protect the interest of minority shareholders.

We all know that the companies in India are monitored by the Companies Act 1956. This act is the most significant corporate legislation that entrusts the Central Government to standardize the following: Formation of the companies, Financing of the companies, Functioning of the companies, Winding up of companies. It was enacted in 1956. This act facilitates companies to be formed by registration, and arrange the responsibilities of companies, their directors and secretaries. Government of India oversees this act through the Ministry of Corporate Affairs and the Offices of Registrar of Companies, Official Liquidators, Public Trustee, Company Law Board, Director of Inspection, etc. The Registrar of Companies (ROC) stems the incorporation of new companies and the administration of running companies. The act is exercised to whole of India and to all types of companies, whether registered under this Act or an earlier Act.

Part One: Tight knitted Corporate Governance.

Corporate Governance is defined as the relationship between shareholders and their companies and the way in which shareholders act to encourage best practices”. There are certain key elements of corporate governance which we need to understand before understanding the difference between the Act 1956 and Act 2013.

  • Shareholders right and obligation.
  • Audit transparency and disclosure.
  • Role of Board of Directors.
  • Stakeholder’s role in Corporate Governance.
  • Shareholders equitable and treatment.

The corporate governance has different set of rules for every aspect of the business unit. It lays emphasis on safeguarding the interest of all those people who are concerned with the functioning of the business unit .The definition says that there has to be transparency in business for those who are investing in it.

The Company Act 2013 shares the same view of making the functioning if the business unit more translucent to the general public. There was a regulatory urge to control corporate governance often. As there was an increase in unethical and dishonest practices prevailing in the market and tremendous growth in the scams area. Thus the initiative taken by the Government to take some serious steps in the control of the audits and working of the company was actually a necessary step.

Part Two: Empowerment and Encouragement

Any company is run by the people who are involved in the decision making. The necessary changes as per the international standard are done as follows:

Concept of One Person Company: One person company is a company with only one person. It states that one person will be the shareholder of the company. It also avails the benefit of a private limited company such as separate legal entity, in fact protecting personal assets from business liability; the most important is perpetual succession. The benefit of this move is for the e commerce industries and for the startup companies who dream of starting their own company.

Board of Directors: Although there are many changes made in the structuring and the powers of the board of directors but the one who hold our attention is:

Woman director

The categories of companies which need to comply with the requirement of having at least of one woman director are as follows: [section 149(1) of 2013 Act]

(i) Every listed company, within one year from the commencement of second provision to sub-section (1) of section 149

(ii) Every other public company that has paid–up share capital of one hundred crore rupees or more, or a turnover of three hundred crore rupees or more within three years from the commencement of second proviso to sub-section (1) of section 149.

This is a mind boggling move from the Indian Government in order to remove gender diversity and enhance the position of women in the company.

Board Functioning

The Companies Act, 2013 provides that a public as well as a private company can have a maximum of fifteen directors on the Board and appointing more than fifteen directors would require approval of a study of corporate governance under the companies act, 2013 shareholders through a special resolution in the General Meeting.

A) It also provides for appointment of at least one woman director on the Board for such class or classes of companies as may be prescribed. The Act makes it mandatory for a company to have minimum one director who has stayed in the country for a period of 182 days in the previous calendar year

.

B) Disqualification of directors

The Companies Act, 2013 makes directors’ disqualification more stringent, includes more scrutiny around related party transactions. The 2013 Act includes the following additional grounds of disqualification:

(i) A person who has been convicted of an offence dealing with related party transactions at any time during the past five years.

(ii) The directorship in private companies has also been brought under the ambit of disqualification on ground for non-filing of annual financial statements or annual returns for any continuous period of three years, or failure to repay deposits for more than a year.

C) Number of Directorships

As per the provisions of the Companies Act, 2013, a person cannot become a director in more than 20 companies instead of 15 as provided in the Companies Act 1956 and out of this 20, he cannot be director of more than 10 public companies.

Part Three: (Clause 49)

To make parallel the company law with Clause 49 of Equity Listing Agreement (Clause 49), 2013 Act has popularized the concept of Independent Directors. In this respect, few of the general observations are as follows:

(a) The term independent director has been defined with certain prescribed qualification and disqualification. [Section 149(6)]

(b) Every listed company is required to have at-least one-third of the total number of directors as independent directors. Independent directors shall be entitled to sitting fees, commission from the profit and reimbursement of expenses. However, they will not be entitled to stock options. [Section 149(9)]

(c) The appointment of the independent director shall be approved by the members in a general meeting and they will not be required to retire by rotation. [Section 149(13)]

(d) An independent director can hold the office for consecutive two terms of five years each following which there should be three years break before he or she is reappointed as an independent director. [Section 149(11)]

(e) Nominee director shall not be considered as an independent director. [Section 149(6)]

(f) While the motive of 2013 Act is to coordinate itself with Clause 49, there is little countenance which is different. All listed companies will now have to comply with Clause 49 and 2013 Act which might make the compliance process more cumbersome.

(g) Independent director shall only be liable for such act of omission, commission by a company which had occurred with his or her knowledge, attributable through Board processes, and with his/ her consent or connivance or where he or she had not acted diligently. [Section 149(12)]

Conclusion

The committee has well analyzed the international business standards. Newton’s third law explains that every action has equal and opposite reaction. The Act 1956 was a voluminous document with 781 sections whereas the Company Act 2013 is divided into 29 chapters containing 470 sections. The conceptual paper based on finding the benefits from the Companies Act 2013 has stressed on few basic changes which were made keeping in mind the international standards. Government has stressed on transparency of the business and making the companies self responsible for their course of action. The Companies Act, 2013 is landmark legislation with far reaching consequences on all companies incorporated in India. The Act, 2013 is more outward looking and attempts to align with international requirements. It is expected to set the tone for a more modern legislation which enables growth and greater regulation of the corporate sector in India.

The 2013 Act has been developed with a view to enhance self–regulation, improve corporate governance norms, enhance accountability on the part of corporate and auditors, raise levels of transparency and protect interests of investors, particularly small investors.

  • Corporate Governance will keep the strict watch over the working of the companies.
  • Corporate Social Responsibility under corporate governance has a new clause of constituting of Corporate Social Responsibility Committee of the board consisting of three or more directors. Thus an essential step to improve the infrastructure of the economy.
  • Corporate issues require quick resolution in terms of mergers and amalgamation .Transparency in accounts and audits through corporate governance will lead to fluid transactions.
  • Capital market regulator has an eminent role to play in the public access to capital by the companies and must have the necessary space to develop suitable framework in tune with the fluidity of the capital markets.
  • Introduction of SFIO (Serious Fraud Investigating Office) is a commendable attempt. SFIO is in-charge for framing of the charges, arrest and filing of other documents.
  • India as a growing economy needed encouragement specifically in the small scale companies. The committee felt the need of changing the structure as it will be unfair to burden the small size company as large public listed companies.
  • Change in constitution of Board of Directors is the big step as the company has laid emphasis on the appointment of one Women director. This step clears the vision of government that women holds equal position to men. Also a big move in the area of empowerment and gender biasness.
  • The recession of 2008 has seen the worst phase of unemployment in private sector and thus opening the door of small scale companies or the world of E-commerce. The Act 2013 is favorable for the young entrepreneurs in every manner.
          1. Concept of Independent director.
          2. Concept of One Person Company.
          3. Fast track mergers.
          4. Listing and de-listing of the companies.

References

1. Glasgow B (2002), “Corporate Governance: A time for Change – Public and Private Sector Measures Move Forward”, Chemical Market Report, Vol.262, pp. 24-26.

2. Cadbury A (2002), Corporate Governance Chairmanship: A personal view, Oxford University Press, Great Britain.

3. Hann D P (2001), “Emerging issues in US Corporate Governance: Are the recent reforms working?” Defense Counsel Journal, VOL.68, No. 2, pp. 191-205.

4. Sparks R (2003), “From Corporate governance to Corporate Responsibility: The Changing Boardroom Agenda”, IVEY Business Journal, Vol 67, No. 4.

5ABagel mc Williams and Donalds Siegel (2000), “Corporate Social Responsibility and Financial Performance: Correlation or misspecification Strategic Management Journal, Volume 21, No. 5, PP 603-609.

6. Gao Y (2009), “Corporate Social Performance in China: Evidence from Large Companies”, Journal of Business Ethics, Vol. 89, No .1, pp.23-55.

7. Salam MA (2009), “Corporate Social Responsibility in Purchasing and Supply chain”, Journal of Business Ethics, Bol.85, N. 2, pp.355-370.

8. Cannon t (1994), Corporate Responsibility: A textbook on Business Ethics, Governance, Environment Roles and Responsibilities, Pitman Publishing, Great Britain.

9. Fama EF (1980), “Agency Problems and the Theory of the Firm”, Journal of Political Economy, Vol. 88, pp. 288-307.

10. Conyon MJ and Sadler G V (2001), “Executive PAY, Tournaments and Corporate Performance in UK Firms”, International Journal of Management Reviews, Vol.3, pp.141-168.

11. Berle A and Means GC (1932), the Modern Corporation and Private Property, Macmillan, New York.

12. Dwivedi N and Jain A K (2005), “Corporate Governance and Performance of Indian Firms: The Effect of Board Size and Ownership”, Employee Responsibilities and Right Journal, Vol 17, No.3, pp .161-172.

13. Chibber PK and Majumdar SK (1999), “Foreign Ownership and Profitability: Property Rights, control, and the Performance of Firms in Indian Industry”, Journal of Law and Economics, Vol. 42, No. 1, pp.209-238.

Why MBA?

MBA is the most dignified degree of our time. But somehow this thought of WHY MBA? keeps pondering over my head. In fact I used to teach MBA students and every time I questioned them why do you want to pursue this course, the answers remained same”Just to have a master degree and increase numbers in our current salary”. I was dumbstruck hearing these.

My idea of doing MBA was to build a personality of my own.A quick decision maker, analyst and a smart business woman. However this concept is now lost in books only. In practical world, it means a degree which can change your 3 figure salary to may be 6 figure salary. Students are not trained to have a personality which influences the world. They are trained to grab a best job in the market.The concept of MBA was to make a person who has the capability to work under stress and handle a group with his own intellectual ideas. He needs to be a person with a growing perspective

We need to break the prejudice of doing MBA for all the wrong reasons.Each course is designed to improve some specific skills which are inherited in you. Courses not only help you financially but done to make you a better person with an objective. As a teacher, or students we need to look into the depth of the course offerings. MBA encourages you to be a whole person with lot many qualities of leadership,decision skills etc.

Hope the course offerings will be discussed first now.Rather than just taking a degree.

Any comments will be appreciated.Keep Reading !!!!

 

Overhead Thoughts

Career is an option or ambition?
Dwindling thought for every woman.
Where “ambitious” is a compliment or criticism?
Difficult to understand the vicious thoughts.
Hurdles all over,Patience is all you seek.
Keep digging your own way,Is all you need.
Scribble your thoughts & learn to succumb despair.
Am sure, wounds will definitely be repaired.