TALENT Capital”- the most valuable asset. In October

 TALENT ENGAGEMENT – THE KPMG WAY   KPMG is one of the big four auditing firms in the world along with Deloitte, EY and PWC. The company has around 1,90,00 employees and has three broad lines of services – Financial service, tax and advisory. The name “KPMG” stands for “Klynveld Peat Marwick Goerdeler”. The name KPMG emerged in 1987 when Klynveld Main Goerdeler merged with Peat Marwick. As per a study conducted by LinkedIn to find out top companies of 2017 where Indians wanted to work, KPMG secured the third position and hence became an obvious choice for the research. Also, the company is ranked 12 in the list of fortune 100 companies, a rank better than all other auditing firms. KPMG is ranked 11th in the rankings released by DiversityInc. in 2017. The rankings by DiversityInc. for various other criteria are as follows:   KPMG focuses a lot on its employees and label them as “Human Capital”- the most valuable asset. In October 2010, KPMG conducted a Global people survey. Around 2500 employees filled the satisfaction survey. The results that were obtained were pretty critical and indicated that the commitment of the employees had reduced (compared to 2008 survey). Also, only 18% employees indicated that KPMG had become more attractive to work for. This was a kind of alarming bell for the company. The issue that bubbled up was “whether first line managers were able to implement KPMG’s intended HR practices to the employees working at the lower level”. First Line Managers (FLM) are those managers to whom non- managerial employees report and these set of managers are actually responsible for implementing the HR practices at the operational level.   The problem was further redefined as “Performance managers as HRM implementers: are they effective”. CRITERIA  RANKING OF KPMG Supplier diversity 10  Top companies for LGBT employees Ranked amongst top 18 in the world  Top companies for employee resource group  10 Top companies for mentoring 5  Top companies for diversity council  4 Top companies for executive women 4  At KPMG, various HR practices are being conducted through the line managers and performance management is one of them. In very simple terms a First Line manager can be termed as a performance manager. Performance manager is not a dedicated position in the hierarchy however, it is an added function. A person who is one level higher in the rung of hierarchy can be a performance manager for the person below him. For eg: a director could be a performance manager of a senior manager and a senior manager could be a performance manager of an advisor, etc. These performance managers are responsible for the yearly appraisal of the employees. Thus, a study was conducted to dig deeper into the problem. The study focused on two broad domains:  1) Does the five factors (Desire, Capacity, Competence, Support, Policies & Procedures) hinder the implementation of effective HR practices. 2) How does the relationship between the performance manager and the subordinate influence the process of appraisal. The method of qualitative and quantitative research was adopted. Qualitative data was collected through unstructured interviews within the advisory division and Quantitative data was collected through online survey. The results showed discrepancy between the Qualitative and Quantitative parts. People generally don’t open up in issues related to appraisal unless they are being assured of confidentiality. Hence no major issues popped up in quantitative research where a face to face interaction held and respondents were assured of confidentiality. The result showed that the performance managers were happy with the support received from the HR department, however the deviation in the scores indicated that there is non-uniformity among the responses. However, the qualitative analysis revealed the further insights. The managers felt that the individual factors like Desire, Capacity, competence, support, Policies & procedures don’t act as an obstacle in implementing HR practices as they are capable and hard working. However, it was revealed that in spite of scoring high on the five factors, they were not able to implement the practices efficiently owing to the work load (day to day business related activities). Thus, absence of proper policies and procedures and the lack of support from the HR department emerged as the greatest hindrances. The relationship between the performance manager and the subordinates was evaluated on the basis of no of interactions they had. Few of the subordinates had weekly interactions with theirperformance managers while few had them on quarterly basis. However, no effective relationship seems to exist between the appraisal and the frequency of interactions. Thus, it can be concluded that as long as the deadlines are met, and the quality of work is not compromised the no of interactions don’t influence the process of appraisal. For the KPMG HR department, two important recommendations emerged out of this exercise which are as follows: ? The HR department needs to clearly define and communicate the policies and procedures to the performance managers, their responsibilities and functions should be explained properly as performance managers do not know how to implement the HR practices of KPMG in daily practice. ? The HR department should provide support to the performance managers in terms of tools, trainings, etc. so that they could efficiently implement the HR practices. In the forthcoming years KPMG redesigned its HR practices as per the changing trends.  CARE FOR THE SANDWICH GENERATION (WORK LIFE BALANCE). WILL IT IMPACT PRODUCTIVITY??                                                          As per KPMG the employees in the age bracket of 30- 50 generally forms the part of the sandwich generation as they have to take care of their kids as well as of the elderly members in their family, which at times affect their work life balance and has an impact on their productivity. Thus, KPMG designed a fluid and supportive program to assist its sandwich generation. The program aimed at providing work life integration by focusing on flexi timings, telecommuting, compressed workweeks, etc.  KPMG also introduced a shared leave program, in which employees can donate their personal time to their colleagues who are experiencing an emergency like death of a family member etc. It also designed a three tier elder care benefit program.  The part I consisted of providing employees with the information related to health care facilities via an online portal.  In the stage II it provided back up care for the elderly relatives of the employees for up to 20 days per year. The care can be facility based or in-home care by aides who would help the family members in situations like taking them to hospital or bathing and getting them dressed at home, etc. Like shared leave the medical leaves can also be shared among the employees.  Finally, if an employee wanted to take care of his relative/family member he can avail leave of absence/paid time off policy. There is also a provision of adjusting the work schedule as per the requirement. All this helped KPMG in reducing the worries of its sandwich employees and in turn increasing their productivity. It led to reduced employee turnover and improved the morale of the employees making KPMG a preferred choice of the employees. In 2013, KPMG’s lead for talent Anna Marrie Deterts published a white paper titled “tune in to talent” which stated that a rigid attachment to the best practices is preventing organizations from nurturing the talent as per their business requirements. The normal tendency to copy the best practices have to be eliminated/challenged if a firm wants to develop a talent pipeline. KPMG itself challenged the prevalent norms and practices of employee retention an example of which is there on the next page.     EMPLOYEE ENGAGEMENT CONVINCING EMPLOYEES THAT THEY ARE THE AGENTS OF CHANGE IN THE WORLD!!!    KPMG’s new philosophy was tuned to the fact that a workforce motivated by a strong sense of higher purpose is essential to engagement. A survey conducted by calling brands revealed that employees prefer an organization with well defined purpose and they rank this attribute the 2nd most important (pay and benefits being the 1st). They ranked “well defined purpose” ahead of promotions. Convinced with the fact that the workforce wanted something more than the hefty paychecks, KPMG launched a new initiative to further boost the morale and engagement level of their workforce by restructuring and elevating the meaning, purpose and scope of their job. The year in which this practice was introduced also proved to be one of the best financial years for KPMG. HOW KPMG BROUGHT OUT   STEP 1- Formulation of a new vision. KPMG did an extensive research, conducted many interviews and then developed a new vision “Inspire Confidence, Empower Change”.  STEP 2_- Implementing vision at the ground level Posters titled “We Champion Democracy” were created and displayed all inside the office premises. They portrayed the difference that the employees make on behalf of clients, communities and societies which encouraged people to see themselves as problem solvers (rather than just mere employees) who help people in decision making and help them in investing their financials wisely. To indulge the workforce into the campaign, a web application was developed wherein the employees could create and share their digital posters illustrating their stories and experiences of implementing changes i.e. “What do you do at KPMG”. The target was set at 10k and it was conveyed that an extra two days paid off will be given if the target is achieved. Surprisingly the 10k mark was crossed just in the month of july and employees were assured of the two days paid leave. Even after this, the portal kept on receiving the stories and the responses touched 42k mark in the month of December.    (Initial poster created by KPMG which was pasted in the office premises)  (Sample posters send by the employees as a part of the campaign) STEP 3 – Outcome Evaluation The outcomes were quite good. Just within six months of this initiative, 85% employees indicated in the survey that KPMG is a great place to work 3% up from the previous year’s 82% landmark. Just after a year the score rose to 89%. Majority of the employees agreed that the initiative instilled a kind of pride in them.  The morale of the employee boosted, and this helped to improve the ranking of KPMG by 17 spots in the list of Fortune magazine’s annual 100 best companies to work for list. And for the first time in the history, KPMG was ranked better than all the big 4 audit firms. A snapshot of the results obtained through the initiative is shown on the next page. It is evident from the results that communicating higher purpose raise employee engagement and morale. Hence the problem which KPMG was facing in 2010 i.e. low employee engagement finally was solved to an extent using this initiative. It was not a result of the best practice but adopting what actually works for your organization i.e. KPMG followed the strategy of optimum fit for itself rather than adopting the best approaches of those times. Also, the non-financial motivation worked in a better way in this case rather than the financial motivation.       82%85%89%78%80%82%84%86%88%90%Before implementation After 6 months An year later% OF EMPLOYEES SAYING YE STIME DURATIONIs KPMG a good place to workThe program was a success owing to the KPMG’s kind of out of the box approach – moving away from the set norms and conditions ? Firstly, they did not rely upon the conventional method of developing a vision and mission and then communicate it formally, instead they adopted an approach wherein they could develop an emotional connect with their employees by showing that how KPMG is making impact and how they are making impact to the lives of the people. ? By involving a third party to develop the web platform for the initiative the company was able to convey the seriousness of the task to its employees. Also, a dedicated platform helped to reduce the message clutter. After observing the success of this initiative, the company has incorporated purpose storytelling training into its Leadership Development Program to help the leaders convey their purpose to their teams. It’s a practice to help leaders overcome their reluctance to selfdisclose.  ——————————————————————————————————————-KPMG is facing a tough competition from the other big four firms in terms of its talent  management. Hence the company is focusing on Talent Management via the route of Employee engagement and beat the other firms in the talent war. Few practices being adopted by them are as follows: “HIGHER PURPOSE” – This is the strategy which has been discussed above. Employees are encouraged to come up and communicate their higher purpose. “CONNECT” – The employees have been formed into small groups to connect with other employees in the organization. This has been done in order to provide efficient mentoring and promoting culture in the organization. “APPRAISAL” – The system of ratings has been abolished. It is being replaced by the feedback from the reporting managers. Also, managers get rewards for retaining the best talent. “PML”- The PML policy is focused on the social welfare of the employees, like promoting club activities such as subsidized Yoga classes, etc. The company works on the policy that a healthier  mind resides in a healthy body. This will result in lesser absenteeism and better utilization of the leaves. “JOB ROTATION” – The new recruits will be exposed to different business lines so that they can identify what suits their interests. “LEADERS DEVELOPING LEADERS”- Under this scheme top 60 top managers will be selected who will then be mentored by the top management leaders like directors, etc. This will help to create a spirit of High Performance among the managers. Also, the managers will get to learn a lot about different facets of management from the top-level executives. “SOCIAL SERVICE” – The employees will be encouraged to participate in social service activities like teaching students, etc. This will help them to add a different dimension to their work. Apart from this the company will conduct two surveys to map the engagement and the satisfaction level of their employees. Also, the young mothers will be provided with regular health checkups and parenting classes so that the new phase of their life don’t interfere a lot with their work.          COMPENSATION -SHOULD REWARDS BE LINKED TO PERFORMANCE  Over the past few years KPMG has been refining its rewards and recognition strategies to provide clear and compelling performance – differentiated outcomes. The focus is not only on the designing part but also on actually communicating those practices to the employee and branding the employment. Line managers are being educated about the policies and the structure and are asked to communicate it to the employees – “Linking performance to reward ” The company has developed an online platform with the name “Encore”. Through this program managers can recognize the efforts of their employees on a social space. They also have to cite reasons for that. The managers are free to choose the value of the reward. The company has introduced gamification on its site and social media via Tibbr. The aim is to collect data and analyze it to decode what set of recognition trends are being followed in the organization which will help to design future compensation plans. Also, this Tibbr platform helps to integrate the feedback from the managers and peers (360-degree feedback) so that the feedback reports can be viewed by the employees monthly/quarterly rather than waiting for the end of the financial year. This has actually helped in maintaining a cordial relationship between the managers and the employees. Research has proved that recognizing people on public platform has a greater impact on their morale and they feel more accomplished about the task. This was a unique approach which KPMG adopted to engage its employees. Rather than focusing solely on career progression, learning and development, KPMG focused on branding and communicating its brand and values. KPMG had a kind of first mover advantage in this field among the big 4 firms which differentiated it from the others and helped in talent engagement and retention. Not only this KPMG has seven national diversity networks, which have 140 chapters and they involve almost 40% of the people at KPMG.  This strong network allows KPMGers to indulge in career development within and outside the firm.    THE ROAD AHEAD The next learning curve in HR could be achieved by Smart People Management – through fostering an evidence-based people management mindset, developing an attentive-listening paradigm and evolving a value-based culture. The evidence based people management is a strategy in which decisions are taken based on some research and rational facts and not just based upon the gut feelings or the surface indicators.  “INTERNAL METRICES + HR ANALYTICS + EXTERNAL RESEARCH” It is not just the assimilation of data but uncovering the facts and issues lying within the data. KPMG has a diverse workforce and different segments have different aspirations. The firm has to identify the current trends, the shifting trends, changing needs and aspirations and has to develop strategy that can effectively cater to the needs of all the segments. Active listening does not mean just addressing the issues and grievances but also keeping in tune to the latest advancements that are shaping or could shape the future of the business. The value system of the organization tells employees about the reasons of its existence and it should clearly indicate the focus of the company which will further facilitate the process of diversification and expansion of business.  DISCLAIMER: This case has been developed by Prashant Rana, Student of PGDM General (2015-17) batch at Lal Bahadur Shastri Institute of Management, New Delhi, INDIA solely for the academic purpose (end term project) for the subject titled SHRM. All the references have been clearly indicated. The author thanks Dr. Anupriya Singh, Course Facilitator, SHRM at Lal Bahadur Shastri Institute of Management, New Delhi for her continuous guidance and motivation. No part of this case may be reproduced or distributed in any form or by an means electronic, mechanical, photocopying, recording, or otherwise or stored in a database or retrieval system without the prior written permission of the author Copyright c 2017 by Prashant Rana. REFERENCES ? www.linkedin.com/pulse/linkedin-top-companies-2017-where-india-wants-work-nowadith-charlie  ? www.peoplematters.in/article/employee-engagement/higher-purpose-higher-culturelearnings-kpmg-13267  ? https://hbr.org/2015/10/how-an-accounting-firm-convinced-its-employees-they-couldchange-the-world ? http://www.hrmagazine.co.uk/article-details/best-practice-is-damaging-talentmanagement-says-kpmg ? https://www.hrzone.com/perform/people/kpmg-enhances-package-for-working-parents ? http://essay.utwente.nl/61490/1/MSc_E_Kuiper.pdf ? https://business.illinois.edu/kpmg-uiuccases/monograph.PDF ? https://rework.withgoogle.com/case-studies/KPMG-purpose/ ? www.iqpc.com/media/9019/21550.pdf ? https://www.hrzone.com/engage/employees/employee-perspectives-an-accountants-viewon-kpmgs-hr-team ? https://www.cebma.org/wp-content/uploads/Briner-Barends-The-Role-of-ScientificFindings-in-Evidence-Based-HR.pdf ? https://www.cebma.org/wp-content/presentations/presentation-Eyring-EBHR-2013.pdf ? www.kpmg.at/fileadmin/KPMG/Publikationen/Broschueren_und_Studien/Human_Resou rces_and_Social_Media.pdf ? https://home.kpmg.com/gr/en/home/services/advisory/management-consulting/people- ? services/hr-training-development.html ? https://home.kpmg.com/uk/en/home/insights/2017/03/the-future-of-employeeexperience.html ? http://reviews.greatplacetowork.com/kpmg-llp ? https://spiritofhr.wordpress.com/2017/03/31/talent-management-the-kpmg-way/ ? http://www.livemint.com/Leisure/AXqgWncRTWYFzalEN2KTJN/The-new-curve-inHR-practice.html          


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