Get Moving: With the economy being what it is, flat increments are a reality you need to come to terms with — at least for the next few years. But with some smart financial and career planning, you can reduce your dependence on the annual increment and prepare for a better one. Nikhil Walavalkar and Anumeha Chaturvedi take you through the paces

Life After a Poor Pay Hike

Start Planning your Investments SoonThis cannot be emphasised enough. “If you have limited cash flows it is all the more important to start early,” says Mukund Seshadri, founder partner, MSV Financial Planners. Typically, investment mistakes are made in February-March, in the hurry to save tax. Instead, Seshadri suggests, start investing now, in line with your financial goals and risk profile. Importantly, you can avoid the cash crunch many people face in the last few months of the financial year.

Some investments work better if you spread them across time periods. For example, if you plan to invest in equity linked saving schemes, it is better to start the systematic investment plan now. It also helps you avoid the timing risk, associated with equities: you do not end up investing at one point of time, which may be the peak of equities.

Ask Why the Increment Slipped If a poor increment stems from individual reasons, then seek opinions on what went wrong and perform better.

In such situations, executives tend to have a short-term view of things, says Mohinish Sinha, leadership and talent practice leader at the Hay Group. “Most professionals do not look at their careers as an investment," he says.

Look at Opportunities One has to look at the total reward model and not salary alone to gauge poor increments, says Kaustubh Sonalkar, executive director, people and change practice at PwC. “One has to look at opportunities like flexibility or international assignments to plan the next move,” he says. Professionals should chalk out their career path and voice their concerns to their bosses and HR managers if they feel they have been shortchanged, says Sonalkar.

Sign up for Training ProgrammesIdentifying new learning opportunities or aquiring certain hot skills in the same domain or opting for executive education programmes will build one’s competence and confidence. Undertaking these will ensure that when the times are good, you are more competent and in demand, and in a better position to net a good increment, says Dhruv Desai, HR head at Angel Broking.

Make the Best of Your BonusUse your bonus judiciously, investing the lumpsum to save taxes. If you are risk averse, you can invest it in a bank tax-saving fixed deposit and earn 8.5% interest. If you can take a bit of risk, consider investing in tax-saving funds. Park the lumpsum in a liquid fund or ultra short-term bond fund and sign up for a systematic transfer plan. “You should use your bonus to prepay your high-cost loans,” says Mukund Seshadri.

Restructure Liabilities When the going is good, people don’t care too much about the terms of their loans. But it’s better to re-visit each loan. “If you have many personal loans running along with some credit card outstanding, you can pay them off by taking a loan against property or a top-up loan in addition to your home loan,” says Rajiv Raj. After getting rid of your high-cost loans, you can also consider taking a cash-back credit card. These offer you a discount of up to 5% on your utility bills and fuel expenses.

FINANCIAL PLANNINGA mediocre increment can adversely impact cash flows. “Even if you keep your lifestyle constant, the consumer price inflation at around 10% ensures that your savings go down,” says Vishal Dhawan, founder, Plan Ahead Wealth Advisors. Cut back on discretionary spending. Also remember: every rupee saved is every rupee earned. “You should look at your liabilities – opt for debt consolidation, prepay high-cost loans and use cash-back credit cards,” says Rajiv Raj, co-founder and director, creditvidya.com, a financial literacy and credit counselling portal.

CAREERPLANNINGIncrements are a combined response to an individual’s performance, his or her unit’s performance and the company’s performance. In a slowdown, a poor increment could simply stem from a company’s performance and the business not doing well, says Mark Driscoll, human capital leader at audit and advisory firm PwC. “Just like stocks, investing in your

career will help in creating a value for yourself next year.”

MOHINISH SINHA, Leadership and talent practice leader, Hay Group

Kaustubh Sonalkar, ED, people and change practice, PwC

“Voice concerns to align your plans with what company thinks you should be doing."

ARINDAM

Start planning investments right away

Opt for short-term FDs instead of savings bank a/c

Opt for cash back credit cards

Refinance high-cost debt with low-cost debt

Cut down on discretionary spends such as eating out, entertainment

Make Your Money WorkPoor increments often see you pushing the work limits. But it’s equally important to make your money work harder. “Instead of keeping your funds in a savings bank account, invest in short-term bond funds or fixed deposits, to optimise returns,” says Dhawan.

Seek opinions on what went wrong

Voice your concerns to HR and bosses for aligned plans

Work on challenging assignments

Identifylearning opportunities, and upgrade skills and education

Our English professor in col-lege would say it was the hamar-tia, the Greek word for ‘fatalflaws’ of the hero, that madeShakespeare’s plays so fasci-nating. Othello was jealous.Macbeth was ambitious. Hewould then add with a twinklein his eye that we all have theability to achieve greatness

provided we did not let ourhamartia take over in a mo-ment of weakness. Thisweek’s brouhaha aboutPhaneesh Murthy broughtup the same question. Howcan someone with degreesfrom IIT and IIM not man-age himself better?

A high-profile leader canbecome almost synony-mous with the organisa-tion. Steve Jobs was thepublic face of Apple. Hispersonality impacted Ap-ple’s culture. His obsessionfor design became an inte-gral part of the brand. Theprivate life of a leader is al-ways under a microscope.The lines between the pub-lic persona and private selfblur with success.

Murthy is not the only se-nior leader to have beencharged with inappropriatebehaviour. Nor is he going tobe the only one. Sometimeback, the CFO of Reebok wasaccused of financial fraud.Dominique Strauss-Kahn,the former IMF chief, wasknown to be a capable econo-mist. But what people willremember him for is that hehad to step down from officefor sexually assaulting anemployee in a hotel.

When these indiscretionshappen, they leave a perma-nent stain on the organisa-tion and most certainly onthe office. The snide re-marks on Twitter, jokes onlate night television andcartoons in the daily news-paper become inevitable. Ifyou think failure is hard tohandle, wait till you learnhow to manage success.That is even harder. Fromsports icons to film actors

and media stars, we have nu-merous examples of peoplewho frittered away a lifetime ofachievements because of atemporary lapse of reason.

Roles at the top get more com-plex and the time available to re-act becomes shorter. With eachsuccessive step up the leader-ship ladder, there is an increasein the role that personalityplays in success. As assign-ments become more difficult,leaders must react more fre-quently on instinct, and instinctis driven by personality. Withcoaching and feedback, peoplebecome conscious of their de-railers and learn to managethem. Fatal flaws never go away,they can only be managed.

While assessing candidatesfor leadership roles, it is im-portant to evaluate their val-ues, motivators and prefer-ences. High IQ gets peoplehired. Yet the people who suc-ceed are ones who show bet-ter skills in managing theiremotions and understandingothers’ emotions.

More CEOs have lost jobs be-cause of lapses in conduct andbecause of not poor businessjudgment. Yet, while hiringleaders, very few firms assessthe personality of the candi-date before making him or herjob offers.

The personality of the leaderalso affects the culture of an or-ganisation. Leaders are rolemodels for employees. A leaderwho yells and hurls abuses inmeetings will soon discoverthe rest of organisation mim-icking that behaviour.

In reality, would an organisa-tion choose not to hire a compe-tent leader with a track recordof success simply because hisvalues did not match the cul-ture of the employer?

While people at the juniorlevel have rules, regulationsand their managers to keepthem in check, the people at the top don’t have guard-rails to remind them that theyare human.

There is an ever willinggroup of admirers and syco-phants who make it hard forthe leader to remember thatthe rules that apply to the oth-ers also apply to them. Theydiscover that only after theyhave shown us their fatal flaws.

The author is chief learning of-ficer at Wipro

Hire for Values,and not JustCompetencies

ABHIJIT

BHADURI

In an age when gender diversity tops the agenda

at progressive companies, it is crucial for a work-

place to be free from sexual harassment. Howev-

er, an Oxfam India survey shows 17% of working

women in India have experienced it. The survey,

conducted jointly with the Social and Rural

Research Institute, showed that a majority of

the victims did not resort to any formal action

against the perpetrator. Rica Bhattacharyya

finds out how women professionals can draw

personal boundaries and stop unwanted

advances early on.

Don’t Ignore It1

2

3

4

5

Don’t ignore or laugh off any kind of

unwanted advance. “An unwanted

advance is a form of injustice. You

need to nip it in the bud, otherwise

the person making the advances

might be encouraged,” says Ruchi Sinha, assistant professor at

Indian School of Business and an organisational psychologist.

Listen to your IntuitionPeople often rationalise their gut feeling, says Sinha. “Your

body knows when you should run away and when you

should fight. Listen to it,” she adds. “The earlier such matters

are discussed the better the remedies,” says Ramesh

Mitragotri, chief people officer, Aditya Birla Retail.

Get ToughMost people look for soft targets. Indicate your

lack of tolerance for unwanted advances in cas-

ual conversations. “Speak up, even in a subordi-

nate-employee relationship,” says Mitragotri.

“Make sure the perpetrator knows you’re

not a weak target,” adds Sinha.

Read up on PoliciesEmployees must be aware about the company’s policies on

sexual harassment, so they know who to approach in case of

such an occurrence. “Read the policies to know the support

and mechanism for complaints in such situations,” says Sinha.

Take PrecautionsIt is important to know the culture of the

country, profession and the organisation

you are working with. Also, set the rules

for yourself and be candid on what is ac-

ceptable and what is not. “There is a very

fine line between your defining what is

acceptable and the other person crossing the line,” says Sinha.

Deal With Unwanted Advances at Work

WAYS TO

SHREYA BISWASKOLKATA

A significant 40% of advisory boards fail toact as good mentors and coaches to CEOsand business leadership, or increase the or-ganisation’s effectiveness, develop collabo-rative strategies and provide support toovercome unfamiliar challenges, accordingto a study by Athena Executive Search andConsulting.

At least 29% of the participants in the studyfelt that boards act only when faced with a po-

tentially threatening scenario, rather thanengaging in compliance-building or riskaversion measures. The study, titled, ‘TheChanging Face of Indian Board Rooms andtheir Relevance’, covered over 200 CEOs, com-panies and heads of businesses and aimed atidentifying the changing composition andevolving role of boards in India.

“The problem with most of these boards isin their construct,” says Kiran Karnik, former Nasscom president who is on severaladvisory boards of MNCs and Indian compa-nies. Most businesses, he explains, formboards comprising people who are stal-warts in their fields but have little to dowith the business on whose board they areappointed. “This leaves little room for themto help,” he says .

Agrees Kanwaljit Jawa, MD of Daikin, In-dia, who participated in the survey. “Busi-ness dynamics have changed and you needpeople on boards who have a clear under-standing of the business and can provide

long-term perspective, but in many cases,they can’t,” he says.

Advisory boards, unlike statutory boards,don’t have fiduciary responsibilities like en-suring compliance of rules and regulationsand financial soundness of the organisation.Instead, they are expected to help with strate-gic planning, growth and resource manage-ment and hence require domain experts with experience.

India warmed up to the concept of advisoryboards five to six years ago in the backdrop of

some global and local scamsand a fast-evolving businessenvironment, says RothinBhattacharya, EVP – strate-gy, M&A, marketing, interna-tional business & investor re-lations with HCLInfosystems, who has helpedset up an advisory board forthe firm’s security business.

In the past decade, scan-

dals in organisations like Enron, Worldcom,Shell and back home, Satyam, brought to fo-cus the role of boards. Stakeholders starteddemanding board participation on compli-ance, risks and disaster management, saysthe survey.

“The economic crises have further increasedthe urgency for confidence-building mea-sures,“ adds Sharma, explaining that organi-sations strive for a deeper level of engagementbetween the board and the management.

The study, however, found some boards play-ing a proactive role in other aspects of manag-ing the business. Some 63% of corporates feela board is active in terms of providing busi-ness intelligence, and using its network forbusiness or investment purpose.

Also, organisations have started realisingthe importance of succession planning, and86% of CEOs feel that boards are activelyworking on the issue.

shreya.biswas@timesgroup.com

Advisory Boards Fail to Mentor CEOsAre not proactive and act only

when faced with a potentially

threatening situation,

according to a survey

Boards

provide

business

intelligence

and use

networks for

investments,

say 63% of

corporates

10�THE ECONOMIC TIMES | MUMBAI | TUESDAY | 28 MAY 2013Career & Business Life

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Date & �me of submission of tender 20.06.2013 up to 11.30 hrs.

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