Case of Texas Instruments

STRATEGIC HUMAN RESOURCE MANAGEMENT: CASE OF TEXAS INSTRUMENTS (INDIA) 1 Background

The Indian arm of Texas Instruments, TI (India) started operating in 1985. TI become the first multinational to set up such a facility in India with TI (India) being one of TI’s largest R&D centres outside the United States. Since then the organisation has grown to more than 900 employees by May 2004. The Indian operation is well recognised through out the global network of TI. This centre has been able to create innovative chip designs and has added value by bringing forth newer and innovative products. TI (India) works in the areas of digital signal processing, analog and mixed signal devices, micro controllers and logic devices. The work is more inclined towards hi-end technology and caters to the needs of the clients who demand faster and radically newer  innovation. The strategy of the organisation is: “Creating “Creating ‘Value’  by producing products and technologies that make us and our customers sustainably different from the competition; Growth by competing in high-growth markets; and  Stability by providing consistently good financial performance.” TI (India) is recognised for its professional HRM. It was ranked as #1 “Great Place to Work” in the survey conducted by the Businessworld and Grow Talent in the year 2003. HR Department

The HR department at TI (India) is managed by nine employees headed by the Director – HR. It has a mix of functional and business structuring. The main functional sub-divisions are compensation, sourcing and training and organisational development. The team manages these sub-divisions and the HR sections of individual business units. 1

Prepared by Sandeep K. Krishnan, student, Fellow Programme in Management and Prof.Manjari Singh, for class discussion only. The authors would like to acknowledge the support of  Mr. V. Kartikeya Kartikeyan, n, Director – HR at Texas Instrum Instruments, ents, India India for support support for the case study. study. The authors would also like to thank the HR department and other employees who spent considerable time with the authors in discussing various issues related to the development of the case. Teaching material of the Indian Institute of Management, Ahmedabad, is prepared as a basis for class discussion. Cases are not designed to present illustrations of either correct or incorrect handling of  administrative problems. Contact email : [email protected] / [email protected]

Figure 1 shows the organisation of the HR department at TI (India). The specific HR  issues and needs of a business unit is taken care by the business HR manager looking after that unit. The organisation of the HR department along the generalist and specialist lines has helped in operational efficiency. This helps HR professionals to understand the specific specific needs of the business units and respond respond effectively effectively by taking taking proactive proactive actions. actions. This structuring enables better communication and suppo rt from the line managers. SHRM Process

The execut executive ivess in the HR departm department ent underst understand and the impor importan tance ce of aligni aligning ng the activities of the department with the business goals. Mr. Kartikeyan, Director – HR  conceptualises the strategic HR as “aligning the people strategy towards the business needs”. He comments that the competitive advantage of Texas Instruments lies in the knowledge base of its highly talented employees. Since the firm operates in an industry where cutting-edge work in the field of technology is done, acquiring and managing talent and is critical. This involves three critical questions: ‘how to get them?’; ‘how to get them to do what they are supposed to do?’; and ‘how to keep them?’. The stated vision of the HR department de partment at TI (India) is “To be a strategic business partner of TI (India) operations in all aspects relating to managing people and human resources. We commit to do this by constantly being a ‘customer-aligned’ organiation and pursuing excellence in all our initiatives and endeavours.” endeavours.” The people strategy of TI (India) is given in Figure 2. The mission of the people strategy is to build an organisation that would help employees to excel in the work place. People strate strategy gy indica indicates tes the import importanc ancee given given by the organi organisat sation ion to the employ employees ees as a strategic competitive resource. The strategy is to get the best people, grow people to be their best, and challenging and engaging people to give the best they have to offer. The  people management at TI is based on the philosophy that ‘Great Leaders’, ‘Great Work’ and ‘Great Rewards’ will make the employees work to the best of their ability for the organisation. The strategic alignment of the HR department aims at striving towards becoming the “CEO’s “CEO’s closes closestt ally” ally”.. This This involv involves es clear clear unders understan tandin ding g of the busine business ss context context and ability to formulate and implement the people strategy according to business needs. At

TI, HR department department is given due significan significance ce through through representat representation ion in top management team involved in strategy formulation and implementation. The leadership team in India desig designs ns the the stra strate tegy gy for for the the year year based based on the the broa broader der dire direct ctio ion n prov provid ided ed by the the worldwide worldwide team. Representat Representatives ives of the various business units and functions functions are part of  this leadership team. Mr. Kartikeyan, Director – HR represents the HR department. He   provi provides des inform informati ation on regard regarding ing the organi organisat sation ional al context context and extern external al market market that that influence the strategy formulation and implementation. The representation of the HR  department ensures that the people related issues are adequately informed. Director – HR  views these avenues as an opportunity opportunity where HR department can add value and take the role as a business partner. He observed, “The representation in these forums reminds that HR has a responsible role to play as a business partner”. Thus the representation of HR  depar departm tment ent in the the top top manag managem ement ent team teamss ensu ensure ress that that it gets gets oppor opportu tuni nity ty to be strategically proactive. The major activities of the HR department are planned according to the overall business strategy for the year. This helps in direct translation of the  business strategy into HR strategy. The key result areas for the HR department that are drawn from the strategy strategy are prioritis prioritised ed annually. annually. The top management provides support in terms of resources for the initiatives of the HR department. The HR department has prioritised its activities and use of resources according to the strategic importance. Most of the activities that are more administrative and operational in nature are either automated or outsourced. The organisation uses HRIS software that helps to reduce the burden of record maintenance. The use of HRIS has helped to get   better better inform informati ation on for decisiondecision-mak making ing and the HR staff staff can devote devote more more time time for  manag manager eria iall and stra strate tegi gica call lly y impor importa tant nt activ activit itie ies. s. The The crit critic ical al HR func functi tion onss like like  performance management are done online. All the employees have online access to their  records through the HRIS. The other major area where the HR department has worked on to impro improve ve product productivi ivity ty is outsou outsourci rcing ng of operati operational onal and admini administr strati ative ve jobs. jobs. This This includes a large chunk of work related to recruitment. The outsourcing has helped to free the resources of HR department and also increase the efficiency of the whole process. The most critical aspect in the success of effective human resource management is the  participation of line managers in the HR processes. In the HR management process at TI (India (India), ), line line manager managerss play play an active active role role in recrui recruitme tment nt and select selection ion,, perfor performa mance nce

managem management ent syste systems, ms, employ employee ee counsel counsellin ling g and traini training. ng. Ms. Sabari Sabari Madappa Madappa,, the  business HR manager for software centre for excellence explains, “The project managers and other line managers give equal importance to the weekly HR meetings as they give to the project related meetings. They show high degree of concern towards the issues related to HR management and participates actively in the HR related activities”.  Illustration of the SHRM Process: For the year 2004, the Indian operation was identified as a potential area of growth for  the wireless business by the TI worldwide team. As this was considered as a major  strategic direction for the Indian operation, the leadership team in India was expected to formulate formulate strategy supporting supporting this broader direction. direction. The Director Director – HR who represents represents the HR department provided information regarding the people sourcing issues associated with the growth of the India centre. He gave a picture of the labour market dynamics and  possible sourcing strategies that can be looked into. The HR department, especially the HR manager concerned with sourcing, collected information that included the data on the avail availabi abili lity ty of the the requ requir ired ed tale talent nt in the the mark market et,, the the curre current nt stat statee of the the campu campuss recruitment and the strategies played by the competitors. In addition, HR department consulted concerned authorities at various units and other functions to understand the requir required ed compete competenci ncies es and possib possible le traini training ng and develop developmen mentt mechani mechanism smss that that are associated with the growth process. Director – HR set the goals for his department regarding sourcing and developing the talent required for implementing the strategy. For  the sourcing of the necessary number of employees for the growth, the HR department (especially the sourcing manager along with the Director – HR) designed the HR strategy to be follow followed. ed. The target targetss were were set as perfor performan mance ce parame parameter terss for the concern concerned ed  professionals and the various initiatives like outsourcing of the recruitment, boosting of  employee referral schemes, etc. were taken to speed up the process of meeting high targets. Meeting the sourcing targets was considered to be the major performance target for the sourcing manager. However, since the sourcing was considered to be a major  strategic objective of the HR department, meeting the target related to the sourcing was also considered to be a performance parameter for the department. Targets were set for  each quarter and reviewed every month. Informal reviews of performance on the set targets were done every week.

HR Sub-Functions

The success of the SHRM lies in integrating the various HR processes towards the common goal. The critical aspect would be the inter-linkages between sub-functions like compen compensa sati tion, on, perfo perform rman ance ce mana managem gement ent,, trai traini ning ng and and deve develo lopm pment ent and and caree career  r  management. The three major divisions of the HR department at TI namely compensation and benefits, training and organisational development and sourcing plays critical role in the HR management effectiveness. Sourcing: As the organisation operates in an industry where quality talent is hard to find and there there is enormou enormouss growth growth potent potential ial,, recrui recruitin ting g is of high high strate strategic gic import importance ance.. The organisation has hired consultants who look after sourcing of potential candidates after  screening the resumes. The business units drive the recruitment at Texas Instruments. Each of the business units puts forth their need for manpower. This is sourced either  through the candidate pool available with the organisation or they look from external sources. The jobs available at each of the business units are announced through the organisati organisation on intranet. intranet. This helps in internal internal sourcing sourcing and employee employee referrals referrals.. Employee Employee referrals are regarded as a major source of recruitment. Fresh candidates are recruited through campus recruitment. Great work and good reputation in the campus has helped it to be one of the most preferred employers in the campuses it visits. The organisation typically adopts the strategy of building its own human resources. The organi organisat sation ion invest investss conside considerab rable le effort effortss in traini training ng and develop developmen mentt of the employees. It seldom goes aggressively in to the labour market to pick up experienced employ employees ees and hire hire them them based based on better better pay. This This helps helps in buildi building ng a commit committed ted workforce workforce that values the work and is rewarded rewarded for its association association with the organisati organisation on through internal growth opportunities. The organisation uses rigorous interview standards that help in getting the right kind of empl employ oyee eess with with the the desi desire red d tech techni nica call prof profic icie ienc ncy y and and beha behavi viou oura rall matc match. h. Advertisements of the vacancies are also published in leading newspapers. This helps in  branding and increasing the public knowledge about the domains of expertise of the organisation.

The line managers help in recruiting the right kind of people they want. As a basic  principle,  principle, TI understands understands that line managers best know the kind of the person they need and HR department should act as a sourcing agent to the business units. As far as this role is conside considered red,, HR departm department ent puts puts in consid considera erable ble amount amount of effort effortss in proact proactive ively ly identifying the manpower needs of the business units and looking for the potential hires through sources like consultants. HR department realises that the use of technology for  hiring process is poor. It is planning to improve online processes for recruitment especially in the areas of accepting the resumes and scanning them electronically. The organisation has also changed the name of the staffing function into sourcing, as basically the role is to provide the business units with potential candidates rather than staffing. Compensation and Rewards: In an indu indust stry ry wher wheree findi finding ng good good tale talent nt and keep keepin ing g them them is crit critic ical, al, righ rightt compensation management plays a critical role. Ms. Lata Subramanyan, who heads the compens compensati ation on and benefi benefits ts functi function, on, feels feels that that it is not just just high high compens compensati ation on that that matters in an organisation like Texas Instruments. According to her, “It is the great work  and satisfaction at work that keeps people here”. The organisation scans the market and fixes its compensation and rewards schemes to the median of ongoing rate. This policy helps to give the employees fair rewards. The structuring of compensation also takes care of linkage to performance of the business and the individuals. The compensation is split in to various components that include a fixed cash component, ESOP, an array of benefits and a variable component that is linked to individual, business unit and organisation  performance. A standard formula is used for calculating the compensation of Texas Instruments worldwide. The HR department interacts with the employees to understand the compen compensat sation ion dynami dynamics cs in the market market.. This This helps helps to posit position ion the compens compensati ation on  package according to the market standards. The organisation takes special efforts to ensure that they don’t loose good employees due to inadequ inadequate ate compen compensat sation ion.. The HR departm department ent was even proact proactive ive in certai certain n situations. For example, sensing that the competitors who have set up new facilities will  be poaching the employees from a certain business unit offering better rewards, HR  managers proactively communicated to the employees and restructured the compensation  packages to meet the challenge posed by the competitors. The organisation also tried to

minimise the impact of business slow down on employees. High degree of cost control was initiated and no pay cuts or downsizing were done. Managing short-term crisis by clearly understanding the business situation and acting towards long-term goals helped the organi organisat sation ion to reduce reduce the impact impact on the employ employees. ees. The tempor temporal al measur measures es of  redu reduci cing ng bene benefi fits ts were were empl employ oyed ed to convey convey the the bad bad busi busines nesss envi enviro ronm nmen entt to the the employees. Individuals who make innovative technological innovation or bring out technology   patents are rewarded heavily by the organisation. TI (India) also holds the record of    brining out most number of technology patents in the country. The organisation also rewards the teams that are recognised for their extraordinary contribution. The teams that have made substantial innovation in their output are given avenues for presenting their  work. The teams making radically new innovations that add significant value to their  units exhibit their outputs to a worldwide audience of TI.  Performance Management: The Key Result Areas (KRAs) are specified for each departments and individuals that are cascaded from the overall strategy of the firm. The software solution that tracks and manages the performance management helps faster and efficient functioning of the same. The tool for performance management helps in setting KRAs, reviewing the progress, getting 360 degree feedback, developing individual development plans and reviewing the career goals and progress. Also since the performance management is a critical function that can determine the employee outputs and morale, training programmes are in place to help help the manager managerss and superv superviso isors rs to underst understand and the finer finer aspect aspectss of perfor performa mance nce appraisal. The importance given to performance appraisal at TI is high. The ranking   process in the performance management helps to identify the top, average and low  performers. The feed back from the performance appraisal is linked to the compensation and training of the individuals. This helps in linking HR processes to the organisational objectives. Training and Organisational Development: The traini training ng and organi organisat sation ional al develop developmen mentt initi initiati atives ves helps helps in buildi building ng the competencies required for the organisation. As the organisation follows a people strategy that is based on building the competencies from within, the impetus on training is high.

The performance appraisal feedback and the associated individual development plan help in identifying the training needs. TI uses considerable internal resources for training  programmes  programmes.. As the firm operates in high-end high-end technology technology industry, industry, finding finding trainers trainers is a difficult and expensive process. The employees also take the role of trainers in certain areas. areas. TI worldw worldwide ide offers offers numero numerous us e-lear e-learnin ning g train training ing courses courses through through its intern internal al website. This helps in getting newer information to each of the individual employees. The organisational development initiative looks at the major change management and developm development ent interv intervent ention ions. s. For exampl examplee the organi organisat sation ion has taken taken up a series series of  lead leader ersh ship ip

deve develo lopm pmen entt

init initia iati tive ves. s.

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 programmes. The organisation also identifies team leaders who have problems in team management and provides leadership training. These initiatives help in strengthening the anchor of ‘Great Leaders’ in the people management model. Also, realising the scarcity of lead leader erss in the the orga organi nisa sati tion on,, late latera rall hire hiress were were made made as an inte interv rven enti tion on.. The The organisation also gives impetus to extensive communication strategy to initiate major  changes changes.. Mr. Mr. Samir Samir Dhond, Dhond, who heads heads the traini training ng and organi organisat sation ional al developm development ent function adds, “We are in the process of setting up a virtual leadership institute and is  planning to have a competency based system in place”. Various team-building interventions are done. This includes review of the individual working in the teams and the overall relationship reviews among the team members. Superv Superviso isory ry survey surveyss are done occasi occasiona onally lly to unders understan tand d issue issuess in the superv superviso isorrsubordinate dynamics. Regular surveys are also done to understand the engagement of  the team members in their respective groups. TI also provides opportunity for employees to take up higher education in the field related related to the operation operation of the organisation. organisation. The organisati organisation on encourages encourages the employees employees to do higher studies in specialised fields in well-known technical institutes like the Indian Institute of Science. The organisation through its “University Program” has also linked up with technical institutions and academia and takes up a role of a facilitator to develop Digital Signal Processing education programmes and courses. Career development: Managing the career development aspiration of the “Texins” – the term used to call a TI employ employee, ee, is given given due impor importan tance ce in the organisat organisation ion.. TI has formulat formulated ed and

implem implemente ented d a dual dual career career path path option option for its employ employees. ees. The manager managerial ial and the technical career ladders take care of the diverse inclinations of the employees. As the core of the organisation’s organisation’s excellence excellence lies in technologica technologicall competence, competence, the technical technical career is a much-coveted one. The entry into the core technical domain is comparatively difficult difficult and involves involves an election election process through councils and committees committees and welloutlined parameters for evaluation. The growth in the technical ladder is challenging to great extend and is highly rewarded. For example at top of the TI technical ladder world wide are the Fellows – who are considered to be the best 2% of the world wide technology leaders of the organisation. Growth in the technical ladder is highly rewarded through peer recognition and opportunities at work. Internal Recognition and Future Directions

TI adopts the innovation innovation strategy strategy that is followed through the HR processes. processes. This innovation strategy boils down to the acronym – “PPASE” – where the letters stands for  Power, Performance, Area, Schedule and Effort respectively. Bringing new products that consume lesser power, area, time of operation and effort, which in turn translate into  better performance, is the corner stone of competitiveness. The competitive advantage of  TI is dependent on the technological innovations brought in terms of its product designs. This requires high degree of training to employees and selecting the best employees at the entry entry level. level. TI (India (India)) focuse focusess on gettin getting g the best best candid candidate atess at entry entry level. level. These These candidates have very little experience and are given extensive training in their respective area areass of inte intere rest st.. Pract Practic ices es are are also also in line line with with the the stra strate tegy gy of “bui “build ldin ing g huma human n resources”. The relationship is based on long-term commitment and the organisation in turn provides good compensation package at par with market trend and a well-defined and promising career path – both in technical and managerial cadres. The satisfaction of the internal customers – employees in other departments is the crit critic ical al fact factor or of succ succes esss of the the HR depa depart rtme ment nt.. The The empl employ oyees ees feel feel that that the the HR  department is doing a reasonable amount of work in enabling the work processes in the orga organi nisa sati tion. on. Mr. Mr. Moha Mohapa patr tra, a, a prog progra ramm mmee manag manager er at the the TI comme comment nts, s, “HR  “HR  department here does not play the policing and controlling role. They play a good role as enabler of employee initiatives. Also they have done a good job by outsourcing some of  the operational and non core activities”. The HR department also understands that to be a

good business partner, they should excel in the duties that are entrusted with them even if  they are very administrative. Howev However er,, empl employ oyees ees also also expec expectt the the HR depa depart rtme ment nt to be more more proac proacti tive ve in understanding the market dynamics and bringing in better practices. For example, an employee commented that although competitors are having better ways of rewarding employees, the HR department is not trying to implement them or working out the  possibility of implementing them. As Mr. Kartikeyan opines, “The HR team is really good at strategising, however when it comes to implementation, there is always scope for  improv improveme ement nt in terms terms of executi execution on effici efficiency ency”. ”. Also, Also, the proces processs of review review of the internal policies that are set by the HR department is slow. This occasionally causes confusion and resentment among employees. e mployees. The HR department also tries to get the employee feedback, as it is core to understand their needs. The HR department facilitates the employee get-together and outings, which help in bonding bonding among the employees. employees. A newsletter newsletter ‘TINAMITE’ ‘TINAMITE’ is published published every quarter quarter and is the voice of TI (India). (India). ‘TINAMITE’ ‘TINAMITE’ is an active active forum for employees employees to share their technical knowledge and interesting experiences, take part in contests, and also also get get to know know abou aboutt thei theirr coll collea eagu gues es feat featur ured ed in each each issu issue. e. Site Site meet meetin ings gs are are conducted conducted to convey organisation organisation related related informati information on and for collecting collecting feedback. HR  department is also in the process of designing a sound career development process that can effe effect ctiv ivel ely y accom accommo moda date te the the grow growth th aspi aspira rati tion on of the the incr increa easi sing ng number number of  employees. Better use of technology for the HR processes is actively pursued. As the organisation is growing, the challenge for the HR department is to keep the culture and morale of the employees going. HR practices and systems are to evolve and  progress according to the needs of growth and innovation.

Figure 1: Organisation of HR Department at TI (India)

V. Kartikeyan, Director – HR 

Business HR 

Samir  Dhond

Lata Subramanyam

Sanjay Bahn

Sabari Madappa

 ASIC   BSTC  MSTC 

 Biz Services Sales

 DSP   AEC  WTBU 

Software development  organisation SoCOE 

Gulshan Walia Joshi

Functional HR 

Samir  Dhond

Lata Subramanyam

T & OD Compensation

Sabari Madappa Sourcing 

 HR Operations

Daniel Raj

Uday Gaondar 

Rajesh Raghavan

Figure 2: TI People Strategy

MISSION

Build a human organisation that works together to win in

(Why we exist)

the market place Win by •

Getting the best people

•

Growing people to be their best

•

Challenging and engaging people to give the best

•

they have to offer  Great Work 

•

Great Bosses

•

STRATEGIC INTENT (The game we are playing)

STRATEGY (How we play the game) STRATEGIC RESULTS

•

Great Rewards People that provide a competitive advantage

(What we will win)

•

Achievement of our business objectives