Questions:

1. Was it a good idea to hire Rain? What challenges did she face when joining the
company?
2. If you were Rain, how would you prioritize when tackling these management
problems in the next year?

Please Help, I will rate 5 stars and will put a good comment!

Transcribed Image Text:

HR Management Before Rain s Joining Until July 2007, the company did not have any human resources department, but had only two employees using part of their time to handle basic HR tasks. By end-2009, the HR department grew to have 8 staff. In 2010, JD.com commissioned a HR consulting firm to look into improving the company s HR practices. However, at the end of the two-year contract, JD.com s headcount almost quadrupled, calling for reviews and adjustments of the consultancy s recommendations. Recruitment JD.com s HR department shouldered heavy workload for recruiting two groups of employees: 1) warehouse and delivery staff; and 2) e-commerce management talents. Although the emerging e-commerce sector had attracted and developed more and more talents, the sector s evolution made talent shortage persist. For instance, when online stores added product categories and other services, they demanded versatile talents with leadership potentials and competencies required by the new businesses. Rapidly growing JD.com found it difficult to recruit the ideal candidates. Training and Development General Staff There were some trainings for basic skills, but not for competencies specific for various job categories. Management Team The company s internal management had not geared up enough to match its rapid growth in both scale and complexity. Under the pressure of achieving high business performance, JD.com s long-service managers were forced to focus on immediate results rather than the company s overall long-term outlook. Moreover, they had been so occupied that they were not able to devote to sharpening their leadership skills or acquiring competencies required by new businesses. Although Richard recognized this problem, he also had not had spare energy to seriously think about how to build a systematic talent pipeline. Nevertheless, in 2007, the company attempted to address this issue by recruiting two management trainees. Richard spent time to talk with them and to watch their progresses. In the following years, JD.com continued to recruit a few management trainees every year. HR Information System In 2010, when the company had about seven thousand employees with seven hundred job positions, the HR department had not implemented any HR enterprise resource planning (ERP) system, and just used the Excel software to calculate and record salary payment. Then, the company installed a software for salary payment, but it would reach its limit when the company s headcount continued to multiple. Employee Care Program Although an employee care program existed, resources for it were limited. Hence, it was basic and had not incorporated any company-specific features. In addition, the company maintained a standard benefits package without customizing it for different job ranks or categories. Compensation Structure Warehouse and Delivery Staff The company allowed managers in different cities to decide the salary for local delivery employees, and did not centrally factor cross-city differences in costs of living into its nationwide compensation structure. Management Team Remuneration of long-service managers or executives at JD.com was below market rate. In the start-up stage, the company was unable to offer high salary, but gave out bonus when its performance was exceptional. Still, JD.com was able to attract management talents who saw the growth potential of the e-commerce sector and the company. Some of them were even willing to lower their salary to join in. As more and more newcomers arrived, their salary, usually at market rate, sometimes surpassed that of their supervisors. For highly demanded talents like those hunted from the financial industry, such problem of reversed supervisor-subordinate pay level was even more common and serious. One senior manager commented, These long-service managers were actually very capable; and had grown with the company. Although the company regularly raised their salary, such increases did not catch up with the market rate. Another senior manager noted, The company has not yet had a job ranking scheme to guide whether a newcomer should join as a manager or director. The decision is often subjective. Furthermore, these newcomers might not be perfect candidates, and often needed time to adapt to the company and to figure out how to deal with its increasingly complex business issues. This led to a morale-hurting perception of unfairness among underpaid long-service supervisors. A senior manager complained, If my subordinates were better paid than me, they should be more competent and bring more value to the company than me. Performance Evaluation and Incentive Schemes Around 2010, the company unprecedentedly conducted performance review every month to stimulate growth. Such frequency was much higher than industry average. At that time, mistakenly thinking that the purpose was to calculate and payout bonus to balance the salary differences among employees, some managers did not do an objective performance evaluation. Such reviews were not linked to the benefits, or trainings and promotions. Thus, high-performers complained that the evaluation outcomes were not fair; their contribution was not recognized; and there was favoritism. Corporate Culture and Values The company trained all newcomers to respect its values. Richard also repeatedly stressed at meetings that JD.com would not allow anyone with opposing values to stay, even if they delivered outstanding performance. Nevertheless, as these newcomers joined, they brought in additional values and cultural elements, as well as the associated work styles. When the company was smaller, the staff behaved according to these corporate values because of Richard s personal influence through shouting slogans together and initiating communications with employees, etc. But as the company grew further, it had not reflected upon how to articulate these values and turn them into employee behaviors. Facing these influential newcomer executives, JD.com s founding executives were concerned about the possible dilution of the company s original values, especially if Richard would be less and less in touch with every manager or employee in the future. Top Management Team Richard s Leadership Style When Richard was leading his founding executives to overcome countless hurdles during the start-up stage, he always required his team to fully execute his ideas. As the company grew, Richard still required his team to quickly fulfill his special requests. Being very diligent, Richard presided nearly every morning meeting with dozens of executives to listen to their business reports and to plan accordingly. When his executives did not instantly understand his visionary ideas, Richard-being straightforward- sometimes harshly criticized these executives, making them feel anxious and embarrassed. Clashes between Long-service and Newcomer Executives By hiring numerous executives from outside, Richard had over 20 executives directly reporting to him. In 2011, JD.com added a new layer of CxOs with highly qualified candidates from renowned local companies and foreign MNCs. These CxOs reported to Richard while the other executives reported to the CxOs of their respective functions. These newcomer executives despised many old practices of the company. Some chose to resign, while others determined to change these practices, creating tensions with the long-service executives. Some of the founding executives also chose to quit because they worried about the increasing pressure from the company s evolution and the subsequent loss of Richard confidence in them. Challenges Facing Rain Rain and Richard were classmates of an executive program in business school. Because of their different career backgrounds-one working for a US-listed MNC and the other founded a local company, they stayed with their respective communities and did not interact much. Richard was determined to hire Rain because of her working experiences and English proficiency. Although Richard was taciturn at school, he approached Rain four times within seven months. Being impressed by Richard s sincerity, Rain decided to join JD.com. But UTStarcom s board chairman tried to make her stay, explaining that heading JD.com s human resources department was not a wise choice. First, the drastic change from a legal counsel to a CHO would be risky. Second, JD.com had become infamous for its high turnover of executives. However, Rain started to feel that she was as little as a bolt in a large corporate machine. She commented, In an MNC, you only need to do the job well and follow its rhythm. But in a local private company, there are far more development opportunities. Rain was allured to the immense potential of JD.com, thinking that it would give her the stage to realize her career goals. Moreover, because she was pleasant and communicative, she was eager to experience the people-oriented nature of HR. In fact, even though JD.com was losing over a billion Chinese Yuan in 2012 and was rumored to be running out of capital, the company persisted to develop its business. Although Rain was not sure about the outcome, she was thrilled by the huge challenges facing her, which were like changing tires of a racing car on the high-speed track. When Rain joined JD.com in August 2012 as its third HR department head, the department had never had a strong voice in the company, even though its staff strength had further grown to 280 people. Rain was clear that the accumulated HR problems were interrelated, and needed a thoroughly thought-out plan for reform. Not only had she needed to shape her working relation with Richard and her role among the CxOs, she also needed employees acceptance of the reforms. More importantly, because the foreseeable growth of the company would involve incubation of new businesses, the HR reforms should adapt to the evolution of the organizational structure and capabilities. Without previous experiences in HR management, Rain was thinking about how to proceed. HR Management Before Rain s Joining Until July 2007, the company did not have any human resources department, but had only two employees using part of their time to handle basic HR tasks. By end-2009, the HR department grew to have 8 staff. In 2010, JD.com commissioned a HR consulting firm to look into improving the company s HR practices. However, at the end of the two-year contract, JD.com s headcount almost quadrupled, calling for reviews and adjustments of the consultancy s recommendations. Recruitment JD.com s HR department shouldered heavy workload for recruiting two groups of employees: 1) warehouse and delivery staff; and 2) e-commerce management talents. Although the emerging e-commerce sector had attracted and developed more and more talents, the sector s evolution made talent shortage persist. For instance, when online stores added product categories and other services, they demanded versatile talents with leadership potentials and competencies required by the new businesses. Rapidly growing JD.com found it difficult to recruit the ideal candidates. Training and Development General Staff There were some trainings for basic skills, but not for competencies specific for various job categories. Management Team The company s internal management had not geared up enough to match its rapid growth in both scale and complexity. Under the pressure of achieving high business performance, JD.com s long-service managers were forced to focus on immediate results rather than the company s overall long-term outlook. Moreover, they had been so occupied that they were not able to devote to sharpening their leadership skills or acquiring competencies required by new businesses. Although Richard recognized this problem, he also had not had spare energy to seriously think about how to build a systematic talent pipeline. Nevertheless, in 2007, the company attempted to address this issue by recruiting two management trainees. Richard spent time to talk with them and to watch their progresses. In the following years, JD.com continued to recruit a few management trainees every year. HR Information System In 2010, when the company had about seven thousand employees with seven hundred job positions, the HR department had not implemented any HR enterprise resource planning (ERP) system, and just used the Excel software to calculate and record salary payment. Then, the company installed a software for salary payment, but it would reach its limit when the company s headcount continued to multiple. Employee Care Program Although an employee care program existed, resources for it were limited. Hence, it was basic and had not incorporated any company-specific features. In addition, the company maintained a standard benefits package without customizing it for different job ranks or categories. Compensation Structure Warehouse and Delivery Staff The company allowed managers in different cities to decide the salary for local delivery employees, and did not centrally factor cross-city differences in costs of living into its nationwide compensation structure. Management Team Remuneration of long-service managers or executives at JD.com was below market rate. In the start-up stage, the company was unable to offer high salary, but gave out bonus when its performance was exceptional. Still, JD.com was able to attract management talents who saw the growth potential of the e-commerce sector and the company. Some of them were even willing to lower their salary to join in. As more and more newcomers arrived, their salary, usually at market rate, sometimes surpassed that of their supervisors. For highly demanded talents like those hunted from the financial industry, such problem of reversed supervisor-subordinate pay level was even more common and serious. One senior manager commented, These long-service managers were actually very capable; and had grown with the company. Although the company regularly raised their salary, such increases did not catch up with the market rate. Another senior manager noted, The company has not yet had a job ranking scheme to guide whether a newcomer should join as a manager or director. The decision is often subjective. Furthermore, these newcomers might not be perfect candidates, and often needed time to adapt to the company and to figure out how to deal with its increasingly complex business issues. This led to a morale-hurting perception of unfairness among underpaid long-service supervisors. A senior manager complained, If my subordinates were better paid than me, they should be more competent and bring more value to the company than me. Performance Evaluation and Incentive Schemes Around 2010, the company unprecedentedly conducted performance review every month to stimulate growth. Such frequency was much higher than industry average. At that time, mistakenly thinking that the purpose was to calculate and payout bonus to balance the salary differences among employees, some managers did not do an objective performance evaluation. Such reviews were not linked to the benefits, or trainings and promotions. Thus, high-performers complained that the evaluation outcomes were not fair; their contribution was not recognized; and there was favoritism. Corporate Culture and Values The company trained all newcomers to respect its values. Richard also repeatedly stressed at meetings that JD.com would not allow anyone with opposing values to stay, even if they delivered outstanding performance. Nevertheless, as these newcomers joined, they brought in additional values and cultural elements, as well as the associated work styles. When the company was smaller, the staff behaved according to these corporate values because of Richard s personal influence through shouting slogans together and initiating communications with employees, etc. But as the company grew further, it had not reflected upon how to articulate these values and turn them into employee behaviors. Facing these influential newcomer executives, JD.com s founding executives were concerned about the possible dilution of the company s original values, especially if Richard would be less and less in touch with every manager or employee in the future. Top Management Team Richard s Leadership Style When Richard was leading his founding executives to overcome countless hurdles during the start-up stage, he always required his team to fully execute his ideas. As the company grew, Richard still required his team to quickly fulfill his special requests. Being very diligent, Richard presided nearly every morning meeting with dozens of executives to listen to their business reports and to plan accordingly. When his executives did not instantly understand his visionary ideas, Richard-being straightforward- sometimes harshly criticized these executives, making them feel anxious and embarrassed. Clashes between Long-service and Newcomer Executives By hiring numerous executives from outside, Richard had over 20 executives directly reporting to him. In 2011, JD.com added a new layer of CxOs with highly qualified candidates from renowned local companies and foreign MNCs. These CxOs reported to Richard while the other executives reported to the CxOs of their respective functions. These newcomer executives despised many old practices of the company. Some chose to resign, while others determined to change these practices, creating tensions with the long-service executives. Some of the founding executives also chose to quit because they worried about the increasing pressure from the company s evolution and the subsequent loss of Richard confidence in them. Challenges Facing Rain Rain and Richard were classmates of an executive program in business school. Because of their different career backgrounds-one working for a US-listed MNC and the other founded a local company, they stayed with their respective communities and did not interact much. Richard was determined to hire Rain because of her working experiences and English proficiency. Although Richard was taciturn at school, he approached Rain four times within seven months. Being impressed by Richard s sincerity, Rain decided to join JD.com. But UTStarcom s board chairman tried to make her stay, explaining that heading JD.com s human resources department was not a wise choice. First, the drastic change from a legal counsel to a CHO would be risky. Second, JD.com had become infamous for its high turnover of executives. However, Rain started to feel that she was as little as a bolt in a large corporate machine. She commented, In an MNC, you only need to do the job well and follow its rhythm. But in a local private company, there are far more development opportunities. Rain was allured to the immense potential of JD.com, thinking that it would give her the stage to realize her career goals. Moreover, because she was pleasant and communicative, she was eager to experience the people-oriented nature of HR. In fact, even though JD.com was losing over a billion Chinese Yuan in 2012 and was rumored to be running out of capital, the company persisted to develop its business. Although Rain was not sure about the outcome, she was thrilled by the huge challenges facing her, which were like changing tires of a racing car on the high-speed track. When Rain joined JD.com in August 2012 as its third HR department head, the department had never had a strong voice in the company, even though its staff strength had further grown to 280 people. Rain was clear that the accumulated HR problems were interrelated, and needed a thoroughly thought-out plan for reform. Not only had she needed to shape her working relation with Richard and her role among the CxOs, she also needed employees acceptance of the reforms. More importantly, because the foreseeable growth of the company would involve incubation of new businesses, the HR reforms should adapt to the evolution of the organizational structure and capabilities. Without previous experiences in HR management, Rain was thinking about how to proceed.

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