Designing Rewards and Recognition - A Case Study

 #DesigningRewardsAndRecognition

One of our clients was trying to implement a rewards and recognition framework for almost two years.

When we were called in, the mood in the room was not optimistic.

We took the project and did design to rollout in 40 calendar days.

Step One: Brainstorm and Design

Sharing with you the interview guide we used to help the client clarify their thoughts.

1. What do you want to reward.

2. Why do you want to reward it.

3. At what frequency.

4. What is the budget.

5. What are the keywords associated with this award. A person who wins this will be ____.

6. This will be valued by employees because __.

7. Who will decide the winner and on what criteria.

The thing with RnR is, that for every winner in a universe of N people, there are N-1 losers. So, every reward's criteria have to be 100% transparent to establish the credibility of the process.

Keeping this in mind, we worked with the client at every stage, asking supporting questions until the process was absolutely clear.

Step Two: Rationalise and Prepare for Rollout

The next step was to rationalise the list and arrive at a schedule of implementation. 

Obviously, through brainstorming, we would have arrived at a list that is at least 2x the intended number of awards being planned. 

So, the awards were rationalised and the list pruned. 

The most challenging aspect at this stage was reminding the client that the budget of the award is not just the trophy/cash component but also the cost of administration, selection, communication. 

We also needed to connect the process to other HR portfolio items like career planning, Upskilling, Performance Management, Payroll, etc. at the design stage itself, so that the rollout is seamless. 

#WordOfCaution

Even if the leadership is very enthusiastic, creating awards that exceed a sustainable budget means that someone will find a valid spanner and succeed in reducing or removing at least a few awards - but taking away the trust on the entire mechanism. So, we had to tell the client to stick within the budget, even when they were ok to "go above and beyond a little bit." 

Step Three: Communication and Rollout 

The next step was to plan the communication preceding and during the rollout for each recognition. 

Once this was done, the rollout of the selected RnR elements was done on a single day. 

During the rollout, the entire focus was on the recipients - what would they be like, how might this help them in their learning/career journey. The entire speech was about the employees and their growth. 

The rollout was a success. 

*Some elements of the process have been disguised/modified to ensure client confidentiality. 

 Topics: Employment and IP law

The Case of Pia

“And… Send!” Pia gleefully said to herself as she pressed the Send key on her laptop. She had reasons to be happy. She had just responded to Amita, the lousy HR person who had participated in making her life miserable at Yuvi, her ex-employer.

Pia had joined the team a little over a year ago. She was a very enthusiastic content writer who brought her bubbly personality and inherent enthusiasm to her work. Her content was always positive, funny, and most importantly – successful.

Her posts got great engagement and her witty one-liners were often shared.

This led to her bosses noticing her within 2 months. The CEO, Apsara, had invited her to coffee in her office!

Over coffee, Apsara had been genuinely interested in getting to know her. She had asked about her family, hometown, education, hobbies, everything!

Just as they were at their last few sips, an idea had suddenly occurred to Apsara – “Pia, I have an idea. Would you like to do a Masterclass for the rest of our content team? This will do two good things – one, instead of being jealous of you, they will start to see you as a natural expert, and also understand how you are the tops in whatever you do. Two, it will help you share some of that bubbly personality with others while adding “Training” as a skill on your resume. How does that sound?”

Pia had been thrilled.

Within two weeks, she had prepared a course outline and some course content. Another two weeks, and she was ready to roll!

The training head sat with her on her course for a while and suggested that she should use innovative training content like memes, cases, puzzles, as assessment instead of and old-fashioned test at the end of the program.

This took her another month to prepare, but finally the Training head had been absolutely delighted with her work and had given the Go Ahead!

Pia ran this course for the first batch and it was a smash hit!

The CEO called her and hugged her. Then, she encouraged Pia to add “Trainer” to her Linkedin profile skills.

The second batch was a runaway success too. After that, Pia’s course had been added to the induction for all content team joinees. She ran the program every two months.

Pia thought it was natural to expect that this would lead to a promotion or at least a raise.

However, neither was forthcoming. When she tried to broach the subject with her manager, she got the usual spiel about how everyone needs to show commitment to advance in their career. HR was not much helpful either.

In short, Pia became the de facto subject matter expert of her team, but that translated into no role, salary, or even designation change.

That, and other things at work led to Pia slowly getting disengaged from her workplace.

8 months into the role, she started looking around and in a couple of months, she found a role that suited her better.

She resigned and her resignation was received with.. well, resignation.

The boss made some customary noises about being disappointed and her having a bright future with the company, but made no real effort to retain her or even ask for her real reasons for leaving. Amita, her HR Business Partner, was equally distant and uninterested in having a conversation.

Pia completed her notice period, and on the last day, packed her bags and left.

Two weeks later, her phone rang.

“Hey Pia.. How are you doing?” A chirpy Amita sounded on the other end.

If Pia was surprised, she did not show it, “Am good Amita. What’s up?”

“We were missing you here ya. Hope you’ve settled in fine at the new place?”

“Don’t worry about that. Why did you call?” Pia asked.

“Well, you know, we needed to run the next training batch for new content writers, and we can’t find your training material!”

“Oh, that’s because I took it with me. It’s not there.” Pia said casually.

“You-took-it-with-you?” Amita repeated slowly.

“Yeah!” Pia replied.

“You can’t do that! You made that material while working for the company, so its company property.” Amita’s tone was not exactly aggressive, but it was getting unfriendly pretty fast.

“Errm, actually, I am the creative owner of this content, so I have every right to take it with me. The company has no right to content that I made as a favour to Yuvi.” Pia held her ground.

“I’ll get back to you.” Amita had been quick to disconnect.

A day later, Pia found an email in her inbox. It was from a legal services firm, telling her that she was being sued for stealing the company’s intellectual property without permission. Since the content had been created by her during and in course of her employment with Yuvi, it was covered under the term “Work Product”. As per law, the intellectual rights to work products created by employees rest with the employer by default. 

 

Pia smiled. She had been expecting this. First, she posted the aggressive email received from Yuvi on Reviewer.com – a website to review one’s employers. Then, she sent an email to her HR, marking a copy to her manager and the CEO. The email said:

Dear Team at Yuvi

The content in question is training material. My designation at Yuvi was “Content Writer”. This role does not include the creation of Training Content. Only work done as part of the role is a work product. This content was created by me – not as a part of my work profile. It was shared with the organisation as an act of kindness. Any content created that is not in my work role cannot be a “work product”. I have kindly allowed the organisation royalty free access to the content as well as my services as a trainer without charging for these services.

If my designation had changed to include Trainer in the work profile, any content created by me AFTER such designation change would revert to the organisation on my resignation as “Work product”. However, both these events did not occur.

Therefore, I am the absolute owner of the training content and methodology, being its sole developer and disseminator.

You are hereby instructed to refrain from the use of the training content, or parts thereof, as well as the unique pedagogy developed for this module. Using any part of such content subjects you to potential royalty payments to the original creator.

This includes but is not limited to memes, handouts, assignments, etc. used in the past as part of the trainings.

Sincerely

Pia.

 “And… Send!” Pia gleefully said to herself as she pressed the Send key on her laptop.

Questions for you

1. Which side do you agree with? Why?

2. If the designation had changed to include “Trainer” without any hike in salary, would the contention of Pia hold? Why or why not?

3. In the normal course of events, under what circumstances should the intellectual property created by employees belong to the employer? Discuss your thoughts.

 *********** 

Terms of Use: 

Please feel free to use with credit to Nidhi Arora. 

 

Moving from ZTA to RTA - The Importance of Right Recruitment

Ignorance is a decision. In this day and age, Ignorance can only be a decision. 

ZTA stands for Zero Trust Architecture. 

Simply put, this means that all employees on all systems will have "need to know" level access only. 

While ZTA is the new favourite flavour of the security fraternity, is it really the silver bullet we've been looking for? 

I believe that ZTA will create a culture of inherent mistrust. While that may stop security incidents in the short term, this mistrust will only lead to greater vulnerability over a longer period. 

I would, instead, like to propose RTA - Reasonable Trust Architecture. 

In this format (which is not very different from what we currently practise at many organisations): 

A. All employees are trusted. 

B. System access follows a simple protocol. Audits are in place and logs are automated and detailed. 

C. Simple checks like maker-checker are in place. 

Now, most readers are, at this point, shaking their heads and thinking, "No, this doesn't work. We tried it." 

It does. If we make ONE change. 

What do you think is the one change that will make the current RTA successful? 

It is Right Recruitment. 

Get the right people in. That's all it takes. Get people who have an unblemished security record. And genuine integrity. 

Remember that systems are hacked by humans. Deliberately. Willfully. or Stupidly. Rarely has a hack been possible without some human action. Whether it is social engineering, spear phishing, or any other format.

The right people will: 

A. Welcome rather than resist security and safety briefings - both physical safety and data security. 

B. Demonstrate a high level of personal and professional integrity. 

C. Actively report both security incidents and process vulnerabilities that they discover 

D. Insist on a culture of fairness and equity - Where everyone is taken at their word and looking over the shoulder or micromanagement is considered a form of professional disrespect. 

E. Believe inherently in the welfare of all or none. So long as one is left behind, we are all left behind - this should be their core ethos, not something they learn at work. 

F. Demonstrate the ability to work in groups and active empathy.  

For our case, let's call these people the Ants. 

What would Right Recruitment look like? 

Right recruitment is top-bottom. If the senior leadership recruits yes-people, they really cannot expect to find the ants further down the hierarchy.  

Right recruitment prioritises personality over experience. "Skills we can teach. Attitude you have to bring." - these golden words that I heard at the SAP interview still ring true. 

Right recruitment has zero tolerance on ethics. There is no "one time". The first ethical lapse is the final one. Would that make the culture toxic? Yes, for those who believe in flexible ethics. But it would make the culture incredibly secure for everyone else, because they would truly be in a place where everyone inherently trusts and is trustworthy. 

Right recruitment is hiring the person, not just hiring for the role. If you deserve to be in here, we will find something for you to do. - Can you imagine a workplace like that? 

Is that hard? Yes and No. 

In the Western management systems, which we currently follow, the individual is an absolute and most white-collar crimes are hushed up under the carpet. The person is asked to leave, and that is that. Whether it is POSH or corporate corruption, these things are just not recorded. 

But in the Indian management practice, a person's reputation precedes them. If they are found in POSH, or party to corporate corruption, they are brought to book and their actions made public. Most Indian business communities are specialised by industry and are close knit. Further, employment is typically a family thing. Like, if the father works at one office, it is assumed that once the child completes their education, they will be viewed favourably by the employer. This means that the price of dishonesty is not individual - it is a shock that reverberates through the entire family. Nor is it purely financial. Your "saakh" or social prestige is also destroyed by an incident like this. 

Even if we don't, or are not ready to adopt this paradigm, a simple case that I saw last night, would definitely argue for a more holistic approach to selection. 

The story is that the conductor of a bus in Indore, Madhya Pradesh, was fired by his employer. This genius changed the display of the bus to show a cuss word, followed by the surname of the employer - also the name of the business. 

Now, one genius data analytics professional tweeted about this and added wink emojis to the post. 

The conductor, one might argue, is technically savvy and acted with mala fide intent. 

Therefore, the act of the data analyst who thinks abuse of privilege is funny, is, to my mind, a huge employment red flag. 

When hiring, I would like to access the public posts of the candidate. Those who think this is 'invasion of privacy' when we access your public posts on a public platform, obviously fall in the category of flexible ethics or multiple personalities. 

How to create a Rewards and Recognition Program in 40 days

 I was a part of an interesting project this year. 

An organisation had been wanting to implement a Rewards and Recognition program for over 2 years. 

We went live in 40 days. 

Here is how we achieved it: 

Prework: Industry Benchmark

As consultants, obviously, we get paid to know the industry benchmarks on Rewards and Recognition. If you are starting out on that journey, suggest you spend some time reading up on what other organisations in the same industry, location, and size are doing. 

Step One: What do you want to reward? 

I always say that 80% of consulting is asking the right questions. 20% is using your experience to create the right solutions based on those questions. 

So, the first question we ask is: What do you want to reward? 

This session was held with the CEO and next level. They all listed what they wanted to reward and how they would unequivocally and transparently identify that. 

The second question, obviously, was not easy to answer for most of them, and that is what helped us eliminate the kind of awards that would lead to heartburn later. 

Once the listing was done, we identified the modal values and selected the top X number. These awards were purely behaviour based. You demonstrated some behaviour, you got nominated. As an advisor, I insisted on 100% transparency and clearly recordable data points. Because each award leads to one winner and 99 losers. So you have to be very clear who you put on that stage and ensure that everyone in the audience is clapping because they understand why that person is on the stage. 

Step Two: Ask the People 

The next step was to ask the employees what they would like to be awarded for. 

We ran an employee contest in which everyone was encouraged to share as many ideas as they would like for awards. 

There were, of course, spot awards and awards for the best ideas submitted. 

We picked some ideas from this list too. 

If you use this route, make sure you close the loop by doing the spot and best idea awards within a week of the contest closing. Otherwise, people will not participate next time. 

Step Three: Bringing in all Together

This is easily the toughest part of the project. 

As the functioning HR leader, I had to collate the three lists and choose what we would start with and what would come later in the year. 

We chose 15 items. This list was then presented to the CEO +1 level, and we were able to prune 5 more entries out. 

With that, we were ready to start with a good 10 awards, 5 more to be added within the year. 

A big risk was that 6 out of these 10 were peer to peer awards. Which means that if people did not like the Awards program, we would bomb. Big time. Also, were our people mature enough to understand and give the right P2P awards? 

I decided that it was time to empower the team, and take that risk. We'll see if any coaching is required. 

Step Four: Communication Plan and Creatives 

Do not underestimate the power of this step. Work on an excellent communication plan that does enough communication and repetition. 

Pay attention to the creatives. All your month-long hard work will go down the drain (no exaggeration) if the creatives do not talk to the audience. Please pay attention to the creatives. 

And pay attention to the right communication plan. Send those teasers, prepare those spot awards, ensure that everyone knows what the P2P awards are for, and how to give them. (Especially if, like me, you are running 6 out of 10 awards as P2P). 

Step Five: Launch! 

Have a launch event! Even if its virtual. For multi-location companies, have a virtual event ONLY so that everyone gets to know about the awards at the same time. 

Step Six: Monitor 

After that, we monitored how people adopted. P2P awards had a spot element too, so people could start using the awards immediately. 

Thankfully, we did well. Very well. 

Step Seven: Keep the Fun Pumping! 

The worst thing that can hit any program is boredom. So, ensure that you have scheduled adequate award functions to keep the RnR program fun and relevant. Both physical and virtual events, and the right mix of communication. Too much, and they switch off, too little, and it becomes irrelevant. 

How to do Portfolio Planning for HR

 In the previous post,  we did 3 important things: 

A. Created a vision for the future. 

B. Created a portfolio of all HR services 

C. Created a linkages map to understand how HR interacts and depends on/supports other functions. 

In this post, we will understand how to take strategic discussions using this tool. 

Step One: Bases for prioritisation 

What matters to your business? 

Here are four different bases that you can use, either one by one, or in combination. 

This discussion is ideally between the CEO and the CHRO. Other stakeholders may be present, but only if necessary. This is a very strategy-led, focused discussion. 

You can either use a simple Red-Yellow-Green format, or you can get more detailed and give weightages to these items. 

The first step, of course, is to take the master portfolio and remove what does not belong or is not relevant to the organisation. This step simplifies the visuals quite a bit and is very helpful. 

For example, your portfolio, after pruning, might look like this: 

Now, of these, we have completely outsourced: 

A. BGV 

B. Payroll 

C. Claims and Benefits

D. Compliance 

So, we remove these 4 also. POSH is on autopilot and does not need day to day attention. We remove that too. 

Our portfolio now looks like this: 

Now, we are dealing with significantly less complexity :) 

Base One: Business Needs 

This is a no brainer. If we are looking to enter a new country, global employee management will need to come first. 

Likewise, anything else that is dictated by business strategy is prioritised. 

Base Two: What People Want

This is a more personal prioritisation. 

We pay attention to three main stakeholders: 

A. What the CEO wants 

B. What the CHRO wants

C. What the employees want (as per the last E Sat) 

One simple way to do this is to choose 3 colour shades - White if no one selects it as important, pale blue when one person chooses it, medium blue when two stakeholders choose it, and dark blue when all 3 choose it. 

Here is an example: 

And now, we can clearly see that Employee Information management, RnR, LTM, and Recruitment are our focus areas for this year. 

The beauty of this tool is that it is simple and visual. 

So as decisions get taken, the tool also looks cleaner. 

Base Three: The Urgency -Importance Grid 

This is a brainstorming and discussion technique. The CHRO and CEO discuss and finalise the items that go into the four grids of urgent and important. 

This base is a little confusing, and we would avoid it for the first time. 

Step Two: Fixing outcomes, timelines, and responsibility 

Let us continue with our example above. 

We want to focus on recruitment, LTM, RnR, and Employee Information this year. 

The next step is to simply write out the business outcome we expect each quarter on each of these items. Who will take ownership of these? 

The outcome is the criteria for success. 

For instance, we take a simple example like Employee Information. 

The Quarter wise targets for these in the next two quarters are: 

Q1: All employee information streamlined at a single source of truth. 

Q2: Zero duplication of information across systems. 

Q3: Information lag (the delay between an event happening and the information entering the system) is 2 days or less. 

In Q4, with this tab reaching stability, we can deprioritise it. 

Step Three: Review and Reprioritise 

The ideal is to meet once a month on the HR strategy, so that we know that actions in HR are following our strategy. 

Once a quarter, we can reprioritise. 

This is a self-sustaining mode of HR operations that keeps HR Ops aligned to strategy. 

How do we deal with Identity and Access Management for moonlighting employees?

Whether we like it or not, moonlighting is here to stay. The causes of the moonlighting effect are easy to understand: 

A. We now know that when the going gets tough, organisations can and do fire employees with no warning whatsoever. 

B. When the profits are good, the executives get the fattest bonus checks, but when there are losses, employees get the pink slips, not the managers who are responsible for PnL. 

Therefore, we arrive at the following axioms: 

A. Loyalty as a concept does not apply to the employer - employee relationship. It is a work for pay contract. 

B. An employee cannot rely on their employer for financial stability. They have to ensure it themselves. 

C. For a mid-level employee, the only resource they can deploy to earn the secondary income is their own skill. 

So, moonlighting is a legitimate response to conditions created by myopic employers. Because it makes common sense, it is here to stay. 

How do organisations prepare for moonlighting? 

Contrary to what we might think, moonlighting is not that dramatic a phenomenon. Our part time employees and freelancers have always been doing this - offering their skills and expertise for a limited time per day and getting paid for it. 

So, on the HR side, we have finally been able to create a policy guideline that will allow organisations to offer moonlighting as a legit business and employment practice (happy to share that if you'd like). 

But, what do we do about Identity and Access Management? 

And this is where it gets really tricky. A moonlighting employee presents a potential incident and data leakage vulnerability. 

How do we, as organisations, proactively create policies that will allow employees to use technology to remain productive, while managing the organisation's risk? 

How are you doing this? 

Women's Day at FA

Women's Day is about women. Elementary. 

Isn't it funny, then, that families, offices, and brands decide women's day events - with the best intentions, but with very little voice? 

This Women's Day, at FA, is about voice. Voices of women, and men hearing those voices. 

Unless men are part of the conversation, part of the thought process, we cannot really make progress on inclusion. Men and women are neither two sides of a coin nor adversaries. They are members of the same team, rowing to a common destination. 

When we go home and sit down to dinner, do we wonder, "What does mom want for Women's day?" Perhaps we ask. Maybe we even do breakfast in bed for her. But suppose we asked, in a fun yet deep way, to really understand what she would like Women's Day to mean? 

At FA, this Women's Day, we decided to ask - What would YOU like Women's Day to be?  

Our activity was simple - All employees get a blank meme template. The female employees could fill it up themselves, and the male employees could take it home and have someone from the family fill it up. In this fun way, we give a voice, and we listen. Deeply, Intently. 

This year, let us Listen. Understand. Amplify. 

Is Gig economy the future?

 I have been thinking about the work preferences of our talent.

Most people now agree that a second gig while being in a full time employment should be perfectly fine. It is their talent and their time. Covid has also taught us that employees don't need to be in office to be productive.

So, should we move to a model where people get paid for outcome, and there is no restriction on being employed at multiple workplaces at the same time?

What will this do to the non-competes and Non disclosures that most organisations need? We will meet the individual's need to have multiple sources of income, and the organisation's need to get work done at less money.

But is it the right model ? What are your thoughts?

As a leader / people professional, how do you think industry should respond to this need in the talent pool?

Blog Special: You will be surprised to know that it was very rare for professionals to take up full time employment in traditional India. Even now, our cleaning ladies are their own bosses. It was the same in ancient India. The only permanent position we know is Munim ji. Other than that, everything was done with independence between the professional and the employer. Letter writers, teachers, sweepers..from the knowledge workers to the sanitation workers.. everyone! 

We don't fix "the system" , we fix the person

If you have grown up with modern management theory, you are probably obsessed with "systems" - those magical things that ensure everyone has the same experience with an organisation.

Travel Management systems ensure that everyone travels according to their eligibility (read: Their place in the pecking order). Requisition systems ensure that everyone at the same level has similar access to corporate resources, and so on.

What happens when a person plays the system? Immediately, additional safeguards are put into place to ensure that the said breach does not happen again.

Iterations of this ensure that the system becomes progressively more rigid, harder to use, and so on. Until, of course, the system becomes a data entry mechanism and things continue pretty much the way they do on the ground.



Many Western employers find this exception seeking behaviour of Indian employees quite frustrating. It is as if we were born with a more than healthy disdain for following rules.



How do Indians manage uniform access and systems approach? 

We don't. For us, each individual is unique. One's access to resources is determined by their personal equity. Not by their place in the pecking order.

The Indian business system inherently recognises the power-authority equation, and combines both when determining the access level of an individual. Unlike the systems based approach, where only authority is recognised and power, though acknowledged, is not official recognised.

What happens when a person plays the system? 

In the Indian system, we don't fix the system. We fix the person. The person is called in to understand what happened, and why. After that, a suitable retribution is awarded, either publicly or privately, but such that everyone knows what happens to those who try to play the system.
And thus, everyone knows what to not do in an organisation.

Because the talent pool was limited and closely knit, what happened to one employee made it to the grapevine quickly enough. It acted as a deterrent. There was no need to "idiot proof" the system. We "tampering-proofed" individuals.

And that, I think, is a diametrically opposite view to correction management than the "Make our systems tighter" approach.

So, dear Indians and Westerners who wonder why Indians don't follow rules, please understand that our traditional systems give us privilege based on our power + authority. We inherently don't understand this One-Size-Fits-All method. This is also true of most high context cultures, where collectivism is so high that it is possible to easily bring errant individuals to compliance. Where each individual is under the spotlight so that the overall pattern appears perfect.

Your thoughts?

We don't hire a person, we hire a family

If you have worked in an Indian business family (including Reliance),  you would have noticed one or both of these things:
A. When an employee has an issue with the family (finances, child not listening etc) , they come to their manager (bade babu or seth ji), and a loan or a counselling session is arranged pronto. Sometimes, rules are bent to make this happen.
B. When a child graduates, the seth ji or bade babu calls the father and tells them to send the resume. The child is usually absorbed by the company.

You may also have observed this in domestic staff in India. We hire one person, then her relative joins as driver, another relative joins as cleaner, and the family is engaged. In villages, we are aware of entire generations of 2 families engaged in an employment relationship.

We're all in this together

If you come from Western business practices, you have possibly heard of a word - Nepotism. It is viewed as something negative. Something that takes opportunity away from a qualified person and gives it to someone who is friends or family with the decision maker.

So it will surprise you to know that in the Indian style of business, reference is the best qualification a person can have.

This is practised in two ways

A. We don't hire a person. We hire the family. 

During the industrialisation era, industries were built in the middle of nowhere. It was, therefore, important to build townships near the factories also. This led to bonhomie among the families of those working together.
Contrast that with Electronic City in Bangalore, where employees are expected to spend upto 4 hours a day in buses.

Whenever there was a company event, the entire family was invited to it. The manager made it a point to speak to the wives and convey his compliments. When a person got an award, usually, his wife and family were asked to come up to the stage with them to collect that award.
Contrast that with today, when the families go to ONE family day a year and all award functions are usually held without the family in attendance.

B. Other things being equal, we hire someone we know. 

This was EXTREMELY important. This is why the entire social and religious structure of India is based on professions. Each profession was specialised. Training began early, and by the time a person was ready to join the workforce, they had already had over 10,000 hours of real training on it.

Even when education went from vocational to professional (read: 3R and formal schooling based), companies continued to hire from the family pool of employees if possible. When a child graduated, the father came first to Bade Babu to see if a vacancy was available in the same company.

Surat diamond industry labour is always hired from a certain community, and all the families are interlinked. So one individual cannot even dream of stealing and getting away with it.

The family sort of hangs out together

Why was this done? 

I am, of course, only hazarding a guess. 

1. It ensured employment stickiness 

Just like in story telling, we engage as many senses as possible, to make the experience richer for the audience, in employment, we need to ensure stickiness. After work, the person goes back to their family. If the family is also engaged with their employment, the employee's stickiness goes up many notches. The decision to leave is not an individual one. The wife has friends, the kids have friends, the boss's wife knows your wife. Its a complex web that one needs to extricate oneself from. Much harder than a resignation to one boss or even looking out for a job. 

2. Oh, the beauty of reference checks! 

Today, professional organisations struggle to do reference checks. They get identity proofs , they check educational qualifications online. And they still dont get relevant, qualitative information like whether the person has been corrupt or a predator in the past. Has the person demonstrated any domestic violence tendencies? Was he a bully in the previous organisation? 

In this method, which sustained for thousands of years before it became possible to do formal ref checks. A person would only recommend another if they were absolutely certain of their ability to deliver and their integrity. One puts one's personal credibility at stake. Its personal. 

Companies today try to hire through employee referral programs. Some of them are successful. However, in some key points, these programs differ from the Indian method of hiring who we know. 

For starters, the engagement level of the referrer is not so high that they feel that they are staking their personal credibility. Its a purely professional transaction. 

Secondly, the referrer and the referee are usually not allowed to work together, which beats the entire purpose of referring. Why would I want to bring my friends into the company if I can't work with them? 

Conclusion 

Was it the best way to hire? 

We don't know. But unlikely. There is no one best way to do things. We do what works for us. We learn from multiple sources. This is one of them. 

Is it applicable today? 

Depends. On the industry, company, and the organisation culture. 

Should i use it?
Not without adequate checks and balances, and training. Indian business practices cannot be applied piecemeal. They have to be understood deeply, imbibed, practised in everyday life, and then used as a specific method in business. Business empathy comes from personal empathy. We first spend years being empathic in our homes, putting people first. Then, when we listen to an employee, we do that with genuine concern, not to put a tick on the HR checklist.
I leave you with that thought.