Business - Change Management at LG

To become an ideal employer, LG is stressing work-life balance and starting career development programmes.

LG Electronics India never had any problem in attracting job aspirants thanks to its industry leadership status and strong brand equity. But retaining employees was a different story altogether: attrition had become a huge problem, partly because of general talent shortage, but mostly because of the pressure-cooker existence most employees faced. In short, the Korean major wasn't exactly distinguishing itself as an employer of choice.
But that seems to be changing now. Yasho V Verma, one of the first recruits of LG India in 1997 and now the HR director, doesn't admit that the company was fast losing its position as one of the best employers (the attrition rate is still much below the industry average, he says), but talks eloquently about the change management initiatives LG has taken in the past few months.
To begin with, LG has banned working on Sundays — a huge change from its earlier culture of employees burning the midnight oil even on weekends. Sensing that old habits die hard, Verma and his team often call up employees on their home landlines just to make sure they are not in office or out on assignments. "Employees' wives are the best informants in this case," laughs Verma. The company even has a family ambassador programme where a dedicated mentor goes to the employees' houses and talks to their family about their problems, among other things.
LG, which is one of the best paymasters in the industry (the company gave an average 18 per cent increment this year), is embarking on other initiatives as well. In September it is due to launch an ambitious five-year career development programme for 2,000 of its executives. The preparatory process, that began in March last year with the help of an outside consultant, has done an assessment of each candidate — where s/he will or can be five years from now, and her/his training needs. A four-member team will be in charge of monitoring the programme from Day One.
In view of a volatile business environment and the fast-changing skill requirements, LG has drawn two sets of plan for the 30 senior-most candidates. "These people have to drive growth and do course corrections whenever required. The training programme for them will have to be flexible enough," says Verma. LG has spent just Rs 1 crore to formulate this programme, but hopes to get enormous returns.
The five-year career planning programme is in sync with the changing eco-system and Verma hopes this will help shore up the long-term commitment of employees. It will also help identify top performers and put them on the fast track to plum positions.
The programme makes sense as a well-defined career opportunity plan is a key driver of employee engagement, clearly reflecting the aspirations of a restless and demanding workforce that is keen to ride the growth wave. Studies have shown that 76 of the employees at Best Employers are satisfied with their career opportunities, compared to just about 50 per cent of the rest. It also goes well with LG's philosophy that at least 20 per cent of its worldwide subsidiaries should have local CEOs.
Comprehensive training has always been in LG's DNA. For example, once a quarter, all work at LG India comes to an absolute standstill. That's the day when everybody is in the classroom, taking a test that is administered in all parts of the globe. Everybody from the top to the bottom of the pyramid takes the test and those who score the highest get attractive prizes. On an average, each LG employee undergoes at least 10 days of training each year.
Verma says a certain amount of stress is inevitable in today's competitive environment and in an economy that is growing at such a fast pace. So recruiting the right candidate is a priority. Apart from the usual biometric tests and other background checks, LG also conducts "negative interviews" to assess whether the candidate will be able to survive organisational stress.
Verma himself experienced this before joining the company. After a brief chat with the CEO, he was led into a room to meet three senior executives of the company. "The four of us sat in absolute silence for about 15 minutes. They were supposed to have interacted and assessed me, but instead none of us exchanged a word and finally the meeting was declared over," he says.
He got his appointment letter the next day! He was told that the company had already done intensive background research on him and the previous day's meeting was held merely to study his body language, pick up vital cues and make a final selection. The incident gave him a good understanding of how LG conducts its recruitments.
The HR director is putting his understanding to good use indeed.