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 ‘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.

1Prepared 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. Kartikeyan, Director – HR at Texas Instruments, India for support for the case 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 : sandeephrm@gmail.com / manjari@iimahd.ernet.in

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 needs of the business units and respond effectively by taking proactive actions.

This structuring enables better communication and support from the line managers.

SHRM Process

The executives in the HR department understand the importance of aligning 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 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.”

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

strategy indicates the importance given by the organisation to the employees 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 closest ally”. This involves clear understanding of the business context and

ability to formulate and implement the people strategy according to business needs. At

TI, HR department is given due significance through representation in top management

team involved in strategy formulation and implementation. The leadership team in India

designs the strategy for the year based on the broader direction provided by the

worldwide team. Representatives of the various business units and functions are part of

this leadership team. Mr. Kartikeyan, Director – HR represents the HR department. He

provides information regarding the organisational context and external market 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 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

department in the top management teams ensures that it gets opportunity 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 are prioritised 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 information for decision-making and the HR staff can devote more time for

managerial and strategically important activities. The critical HR functions 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 improve productivity is outsourcing of operational and administrative jobs. 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), line managers play an active role in recruitment and selection, performance

management systems, employee counselling and training. Ms. Sabari 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 strategy supporting this broader direction. The Director – HR who 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

availability of the required talent in the market, the current state of the campus

recruitment and the strategies played by the competitors. In addition, HR department

consulted concerned authorities at various units and other functions to understand the

required competencies and possible training and development mechanisms 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 followed. The targets were set as performance parameters for the concerned

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

compensation, performance management, training and development and career

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 is enormous growth potential, recruiting is of high strategic importance. 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

organisation intranet. This helps in internal sourcing and employee referrals. 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 organisation invests considerable efforts in training and development of the

employees. It seldom goes aggressively in to the labour market to pick up experienced

employees and hire them based on better pay. This helps in building a committed

workforce that values the work and is rewarded for its association with the organisation

through internal growth opportunities.

The organisation uses rigorous interview standards that help in getting the right kind

of employees with the desired technical proficiency and behavioural match.

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, TI 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 considered, HR department puts in considerable amount of efforts in proactively

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 industry where finding good talent and keeping them is critical, right

compensation management plays a critical role. Ms. Lata Subramanyan, who heads the

compensation and benefits function, feels that it is not just high compensation 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 compensation dynamics in the market. This helps to position the compensation

package according to the market standards.

The organisation takes special efforts to ensure that they don’t loose good employees

due to inadequate compensation. The HR department was even proactive in certain

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 organisation to reduce the impact on the employees. The temporal measures of

reducing benefits were employed to convey the bad business environment to 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 the managers and supervisors to understand the finer aspects of performance

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 training and organisational development initiatives helps in building 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. As the firm operates in high-end technology industry, finding trainers is a

difficult and expensive process. The employees also take the role of trainers in certain

areas. TI worldwide offers numerous e-learning training courses through its internal

website. This helps in getting newer information to each of the individual employees.

The organisational development initiative looks at the major change management and

development interventions. For example the organisation has taken up a series of

leadership development initiatives. This includes leadership focused training

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 leaders in the organisation, lateral hires were made as an intervention. The

organisation also gives impetus to extensive communication strategy to initiate major

changes. Mr. Samir Dhond, who heads the training and organisational development

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.

Supervisory surveys are done occasionally to understand issues in the supervisor-

subordinate 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 to the operation of the organisation. The organisation encourages the 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 employee, is given due importance in the organisation. TI has formulated and

implemented a dual career path option for its employees. The managerial and the

technical career ladders take care of the diverse inclinations of the employees. As the

core of the organisation’s excellence lies in technological competence, the technical

career is a much-coveted one. The entry into the core technical domain is comparatively

difficult and involves an election process through councils and committees and well-

outlined 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 strategy that is followed through the HR 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 level. TI (India) focuses on getting the best candidates at entry level. These

candidates have very little experience and are given extensive training in their respective

areas of interest. Practices are also in line with the strategy of “building human

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

critical factor of success of the HR department. The employees feel that the HR

department is doing a reasonable amount of work in enabling the work processes in the

organisation. Mr. Mohapatra, a programme manager at the TI comments, “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.

However, employees also expect the HR department to be more proactive 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

improvement in terms of execution efficiency”. Also, the process of review of the

internal policies that are set by the HR department is slow. This occasionally causes

confusion and resentment among employees.

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 among the employees. A newsletter ‘TINAMITE’ is published every

quarter and is the voice of TI (India). ‘TINAMITE’ is an active forum for employees to

share their technical knowledge and interesting experiences, take part in contests, and

also get to know about their colleagues featured in each issue. Site meetings are

conducted to convey organisation related information and for collecting feedback. HR

department is also in the process of designing a sound career development process that

can effectively accommodate the growth aspiration of the increasing 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)

Samir Dhond

ASICBSTCMSTC

V. Kartikeyan, Director – HR

Business HR

Lata Subramanyam

Biz ServicesSales

Sanjay Bahn

DSPAECWTBU

Sabari Madappa

Software development organisationSoCOE

Gulshan Walia Joshi

Functional HR

Samir Dhond

T & OD

Lata Subramanyam

Compensation

HR Operations

Sabari Madappa

Sourcing

Daniel Raj

Uday Gaondar Rajesh Raghavan

Figure 2:

TI People Strategy

MISSION

(Why we exist)

Build a human organisation that works together to win in

the market place

STRATEGIC INTENT

(The game we are playing)

Win by

• Getting the best people

• Growing people to be their best

• Challenging and engaging people to give the best

they have to offer

STRATEGY

(How we play the game)

• Great Work

• Great Bosses

• Great RewardsSTRATEGIC RESULTS

(What we will win)

• People that provide a competitive advantage

• Achievement of our business objectives