“Employees first” is the most important cultural value that former HCL Technologies’ CEO Vineet Nayar believed would help the company to grow. While most managers think a customer’s satisfaction should come first, Nayar’s philosophy is that employee satisfaction needs to be the top priority. As one of the largest companies in India, HCL provides various IT products and services such as laptops, custom software development tools, and technology consultations. Though it is a large company, its work environment is not as fun and quirky as that of a start-up. So attracting and retaining talent is one of its biggest challenges.

Part of the “employee first” philosophy is a no-layoff policy, which is difficult to uphold especially during an economic downturn. During the global financial crisis (2007–2011), HCL had an excess of employees and had to suspend raises. However, it kept its promise and did not lay off any employees. However, as the economy picked up, HCL employees looked to competitors for better job offers. After losing 22 percent of its workforce in the first quarter of 2010, HCL finally started to monitor its employee satisfaction levels.

It is fitting that the New Delhi-based company, headquartered in the world’s largest democracy, attempts a radical experiment in workplace democracy. Nayar was committed to creating a company where the job of company leaders is to enable people to find their own destiny by gravitating to their strengths. During his tenure, Nayar had pioneered a culture in which employees were always first. So what did he do? Part of the cultural initiative looked at the organization’s structure. HCL inverted its organizational structure and placed more power in the hands of frontline employees especially those in direct contact with customers and clients. It increased its investment in employee development and improved communication through greater transparency.

Employees were encouraged to communicate directly with Nayar. Through a forum called U&I (You and I), Nayar fielded more than a hundred questions from employees every week. “I threw open the door and invited criticism,” he said. However, the signature piece of the company’s cultural mission was what HCL called “trust pay.” In contrast to the industry standard, in which the average employee’s pay is 30 percent variable, HCL decided to pay higher fixed salaries and reduce the variable component. Although in other settings, businesses may elect to focus more on the variable component such as commission on sales rather than fixed pay, HCL’s focus was on fixed salaries or what is called “trust pay”. By increasing the fixed component of salaries, HCL aims to give its employees a higher guaranteed pay, which in turn reduces uncertainty for employees. Fixed salaries is an important component that HCL employee value in HCL’s culture, and is, therefore, emphasized more by the company to keep improve employees satisfaction and minimize attrition. Did the unique “employees first” culture at HCL Technologies attract unique employees?

Rajeev Sawhney, HCL’s former European president, would say it did. Using Slumdog Millionaire, a movie that won the 2009 Academy Award for Best Picture, as a parallel, he said the movie is a reflection of India. It shows the adversity that creates the desire in people to reach out and create. With each adversity, there is a greater desire to reach out and do something more. Sawhney said that entrepreneurialism is a key value of the HCL culture.

DISCUSSION QUESTIONS

1. What is your impression of the “employees first” culture at HCL Technologies? Explain whether this culture can be equally effective in other organizations.

2. How did organizational behavior help Vineet Nayar lead his company? Did it also help supervisors at HCL?

3. What do you think of HCL’s approach during the global recession where it retained all employees but did not provide any raises? Would you do anything differently?

4. Design an employee attitude survey for the HCL employees.