DEC. 22, 2002
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Two Slab
Income Tax

The Kelkar panel, constituted to reform India's direct taxes, has reopened the tax debate-and at the individual level as well. Should we simplify the thicket of codifications that pass as tax laws? And why should tax calculations be so complicated as to necessitate tax lawyers? Should we move to a two-slab system? A report.


Dying Differentiation
This festive season has seen discount upon discount. Prices that seemed too low to go any lower have fallen further. Brands that prided themselves in price consistency (among the consistent values that constitute a brand) have abandoned their resistance. Whatever happened to good old brand differentiation?

More Net Specials
Business Today,  November 24, 2002
 
 
Stressed, And Loving It
Is stress really such a bad thing? When times are tough, it can often get people to perform a whole lot better.

Where does de-stressing end and complacency begin? Some three years ago, Anil Arora, 35, was heading BPL's Chandigarh branch, and thought he was doing just fine. Then, he switched to LG-and found himself stretched to near exhaustion. Targets. Week after week, month after month, relentlessly, sleeplessly and breathlessly. Did he give up? No. In a year and a half, sales were up 300 per cent. Today, he has national charge of LG frost-free refrigerators, which are going great guns too-selling, ironically, on the brand's health platform.

No contradiction there, feels Yasho V. Verma, Vice President, HR & MS, LG Electronics India Ltd. Arora is stressed, but not stressed-out-because business is good, which also means that his job's future is secure. This, says Verma, is because of the work environment the company creates. An environment of ceaseless effort, with all the stress that goes with it.

It's about striving, not strife. And it works.

Great feats of innovation often result from what is called 'creative tension'

Good Stress-Or Eustress
Stress is not always unhealthy. It has a healthy component called 'eustress'-the opposite of distress. ''Though the dividing line is thin,'' explains Dr Sanjay Chugh, a leading Delhi-based psychiatrist, ''if companies can use this effectively, they can optimise their hr capacity.'' In fact, the results of a study published in the February 2002 issue of the journal Psychophysiology show that people push themselves, when given a challenge accompanied by such incentives as money or status, to the limits of their ability.

Setting stiff targets and then providing operational freedom is one method. "We encourage people to come up with new ways of doing things, and they are experimenting all the time,'' says Sunil Kishore, Vice President (HR), Coca-Cola India (CCI). His reasoning: "If you empower people, they will put stress on themselves, and this in turn increases performance.'' It helps to have the jaws of a big ugly reptile called 'failure' snapping at one's ankles.

There are other mechanisms too. Bharti, for instance, prefers to use a relatively flat organisational structure. There are just four tiers: the CEO, vice presidents, deputy general managers and then the frontline. This way, each position must assume utmost responsibility. It's high stress, but it works.

Internal competition can also play a big role in creating positive stress. Take CCI's 'Summer Thunder' programme earlier this year-a competition between five of its regions. People had fun, but also went nuts trying to meet volume targets. Positive stress was at work.

LG, on the other hand, has a reward system designed to encourage this sort of self-motivation. Performance bonuses, going up to an unbelievable 800 per cent, are given every six to eight months. Where does the stress come in? It's a comparative system, and people find themselves under stress to perform well, or risk ignominy. The logic: if the market is highly competitive, so should the company be, even within. And this forces people to keep themselves whirring at high-energy levels. Stressful? Yes. Like any achievement.

Reliance operates on self-set goals. ''The only way to get someone to overperform is to give them complete freedom, make them set goals for themselves,'' says Tony Jesudasan, Senior Executive Vice President, Reliance. But that doesn't mean one can get away setting relaxed goals. Reliance's culture, as set by the late Dhirubhai Ambani himself, is a 'stretch' one, where deadlines are brought forward every now and then. When Reliance commissioned Bechtel to build its refinery at Jamnagar, Bechtel said it would take 36 months, 12 months less than the world standard. But Reliance figured it could do the job alone in 30 months flat. Could Bechtel match that? It did, and this has become the new world standard.

It's all about thinking bigger, aiming higher, striving harder. Stretch targets, explains Madhavi Misra, Consultant, Hewitt Associates, "act as an enabler to raise the bar on employee performance". They also bring the 'failure' line closer. And it's well known that the biggest source of stress is fear. The fear of getting axed. Nothing concentrates the mind better.

Still, A Balance
Yet, stress imposition can prove counter-productive. Sameer Raja spent his youth 'maxing' exams, and scorching an IIT-IIM trail of self-driven brilliance. By his second year at a multinational company, he had turned deeply cynical. He didn't like being 'slave-driven' anymore, and developed misgivings about what counted as 'performance', and what did not. When he left, the company lost a good strategic mind.

That leads us to another important point. Positive stress turns negative if it injures a person's physiology and does little for his or her self-esteem. ''To ensure creative stress,'' says Ishan Mehta, Vice President (HR), East India Hotels, ''the management needs to egg you on to achieve, support you and give you recognition. If it comes from hierarchy pressure, then it is negative stress and causes a burnout."

The carrot and stick balance varies. But both are needed. Some analysts believe that great feats of innovation often come from 'creative tension'-inherent in, say, trying to rein two forces pulling in opposite directions. So there could be the pull of positive reinforcement and the tug of job-loss fear, working simultaneously.

Much, as always, depends on the person at the top. ''It is common for people to leave organisations because of their superiors,'' says Jagdeep Khandpur, Director (HR), Bharti. A high-energy CEO can get his company striving to move at the pace he sets. A gregarious CEO can engage key performers personally to motivate them. Good leadership is sometimes all it takes.

Some of the world's smartest people have come up with brainwaves under excruciating pressure. Andy Grove's life story offers a stark lesson in how it can send one's grey cells into overdrive. As a young boy, he once offered to fix an electric circuit-without knowing a thing about it-to save his skin. Luckily, the electricity failed. He grew to create Intel, a company that strives to generate more and more computer processing value. To be needed. By the market. Always. Great feats of innovation often result from what is called 'creative tension'

 

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