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Job rotation & how it works

Gouri Shukla | April 27, 2005

They're not always as bad as our headline may suggest, but inter-departmental transfers have long been considered subtle punishment for errant bureaucrats -- even a neat, bloodless way to settle scores, at times.

But that was then. A closer look at some Indian companies shows that job rotation is becoming an increasingly accepted practice.

Consider LG Electronics India. In the past five years, close to half the Korean electronics major's 2,800 employees have switched functions within the organisation at least twice.

And what is an India-specific HR policy for LG is the norm worldwide for IBM. In fact, the IT giant has some high-profile job swaps to its credit.

Just last year, then chief financial officer John Joyce switched functions and designation with Mark Loughridge, the senior vice president, global services. And last year, two senior professionals, Somnath Sinha, the erstwhile head of global operations, and Ashish Kumar, erstwhile head, sales, moved to India.

At McDonald's too, cross-functional job rotations are encouraged, globally and in India. "It is a win-win situation -- win for the organisation, the team and the employee," says Amit Jatia, joint venture partner and managing director, McDonald's, western India.

Is it so easy? No. Shuffling employees can work, but there are some ground rules.

No room for gut feel

Job rotation is not an instinctive process. "There has to be a clear justification why you're hand picking certain employees to be transferred," states Yasho Vardhan Verma, director, human resources, LG Electronics India. "It works, provided it's done objectively."

Companies should base all inter-functional transfers on a structured performance assessment, and pick the best performers to change jobs. The parameters of judging performance need to include not only functional skills but also core and leadership competencies.

LG's appraisal forms, for instance, sport eight performance parameters, each of which is quantified. The higher the percentage scored in core skills and leadership parameters, the more likely the candidate is to be considered for rotation.

Get your sales spiel ready

"People move -- but only for the right reasons," points out Martin Appel, vice president, human resources IBM India. "The company needs to show them a proper and realistic career map."

IBM, for instance, conducts annual interviews where it examines a potential next role for each employee after mapping his preferences.

Most companies agree that employees are more willing to accept job switches if there's a safety net below them -- training programmes, for instance, that help bridge the gap between unrelated functions such as HR and marketing.

"If the rotation is not planned well and not linked to career and succession plans, the company may end up losing a good employee," warns Jatia.

Have heirs handy

Picking the best performer from a team means that team is less one asset. So a succession plan that identifies and develops worthy substitutes, from within the same team, is critical.

In 2003, when LG carried out a large-scale job rotation exercise in its manufacturing and research and development division, the planning began a year earlier. The trigger was LG's need to decentralise the R&D and manufacturing function to the five business units.

"We didn't want to hire from outside," says Verma.

Instead, LG shortlisted the best performers among product heads and trained in aspects such as costing and finance for over a year. "Simultaneously, we also identified the No.2 performers to replace the product manufacturing heads," says Verma.

Prepare for opposition

Not all employees are eager for change. That's especially true of younger, less experienced officers. "Job rotation did not work well when we tried moving newer employees," shares Jatia of McDonald's. LG officials, too, admit that job rotation didn't work with fresh management recruits, who were uncomfortable with the idea of being planted in various functions.

Also, unlike globally, Indians value vertical growth (moving designations in the same function) more than lateral growth.

Timing is critical in such cases. Companies need to identify potential job swaps at the right time -- when the employee has matured in a particular function and is mentally ready for a move.

Going by the experiences of Indian companies, that means giving employees three years in a job before suggesting a switch.

Handled well, job rotation brings several benefits. At LG, it has worked as an effective retention tool for top talent. "It's a great way to meet the aspirations of employees," points out Verma.

While attrition level at LG is around 8 per cent, Verma claims there have been negligible drop-outs among the 1,200 employees who've switched functions. McDonald's, too, claims longer tenures (five to six years) among employees who rotate jobs.

Job rotation can be a boost for good performers. "Work portfolios get re-organised, jobs get enriched and some fresh blood comes in," Jatia says.

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