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HUMAN RECOURSES MANAGEMENT PROJECT

HRM LIFE CYCLE AT NOKIA STRATEGIC AND OPERATIONAL IMPLICATIONS

Submitted by
Group 11 Section B
Rohan Mishra Riaz Khan Aritra Banerjee Asit Balwantrai Acharya GROUP 11 Page 1 SECTION B

Gajendra Yadav Ravi Kumar Bable Conrad Janong Sooting

CONTENTS
Contents..................................................................................................................................2 BRIEF COMPANY Description...................................................................................................4 Job analysis.............................................................................................................................4 Recruitment and Selection......................................................................................................5 Global Recruiting Principles:.................................................................................................5 Resource Planning Focus......................................................................................................5 Objectives of the global recruitment process: .....................................................................6 Performance Management system at Nokia:...........................................................................6 Goal and objective planning: ...............................................................................................6 Performance evaluation/achievement review .....................................................................6 Training and Development at Nokia:.......................................................................................7 Development assessments at Nokia:...................................................................................7 Identification of development objective............................................................................7 Selection and ordering OF THE assessment......................................................................7 Taking the assessment and receiving 1:1 feedback..........................................................8 Integrate assessment results ...........................................................................................8 Career Management:...............................................................................................................8 INTERNAL JOB MARKET (IJM).................................................................................................8 70/20/10: Organizational Impact due to flexibility............................................................9 70/20/10: ENABLING WORK VIRTUALIZATION...................................................................9 Compensation and BenefitS:.................................................................................................10 Structure of compensation:................................................................................................10 Implication of using the NFF:..............................................................................................11 Benefits..............................................................................................................................11 GROUP 11 Page 2 SECTION B

Summary...............................................................................................................................11 REFERENCES:........................................................................................................................11 EXHIBITS...............................................................................................................................12 EXHIBIT 1: Global Rcruitment Process................................................................................12 EXHIBIT 2: Resource Planning............................................................................................12 EXHIBIT 3: Career Management.........................................................................................13 EXHIBIT 4: Compensation...................................................................................................14

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BRIEF COMPANY DESCRIPTION


Nokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki. Nokia plays a very large role in the economy of Finland; it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) as of 2007, a unique situation for an industrialized country. In recent years, Finns have consistently ranked Nokia as one of the best Finnish brands. The Nokia brand, valued at $29.5 billion, is listed as the eight most valuable global brand in the Interbrand/BusinessWeek Best Global Brands list of 2010 (first non-US company). It is the number one brand in Asia (as of 2007)[18] and Europe (as of 2009), the 41st most admirable company worldwide in Fortune's World's Most Admired Companies list of 2010 (third in Network and Other Communications Equipment, seventh non-US company),and the world's 120th largest company as measured by revenue in Fortune Global 500 list of 2010. (http://en.wikipedia.org/wiki/Nokia)

JOB ANALYSIS
At Nokia, we are committed to connecting people. We combine advanced technology with personalized services that enable people to stay close to what matters to them. Every day, more than 1.3 billion people connect to one another with a Nokia device - from mobile phones to advanced smart phones and high-performance mobile computers. Today, Nokia is integrating its devices with innovative services through Ovi (www.ovi.com), including music, maps, apps, email and more. Nokia's NAVTEQ is a leader in comprehensive digital mapping and navigation services, while Nokia Siemens Networks provides equipment, services and solutions for communications networks globally..(http://jobs.nokia.com/job/Mountain-View-%28Senior%29-Manager,-Intelligence-%E2%80%93-N_American-Competitors-Job/1013992/) The above is the beginning of a job description for a senior manager, Intelligence North American competitors. The description runs for half a page before it mentions the qualifications required for the job. It also lists the primary location of the job, average percentage of time travelling will be required, level of the job, employee status (regular/part time) and so on. The description is a lot smaller for a data integration engineer job (http://jobs.nokia.com/job/Burlington-DataIntegration-Engineer-Job/1160424/) , but it still contains a very appealing description of the core values and mission of the company (same as in the description for a managers job as given above). In all it catches eye immediately. The description for this particular job goes into the technical details of the requirements of the job, which is understandable considering it is a specialists job. And then a list of required qualifications follows. Both the descriptions talk about compensation being competitive and a few of the benefits awarded like medical, dental and paid time off. Join a global company that can challenge you and encourage you to innovate. After all, our days are devoted to developing the potential of mobility. It's your world. At Nokia, you have an extraordinary opportunity to shape it. Our future is your creation. We offer a dynamic learning culture that nurtures openness, transparency, with endless opportunities for competence development. We reward the results of your success. The company clearly leverages its high brand value to attract the best talent, which is augmented by the strong emphasis on career development and dynamic learning environment that it promises the employee would work in.

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There are no easily available information on the methods and approaches adopted to collect job related data by the HR team at Nokia. But few observations from us point towards a low level of employee involvement in the data collection, frequency of data collection and analysis being more than a year at least,

RECRUITMENT AND SELECTION

GLOBAL RECRUITING PRINCIPLES:


The key features of the recruitment process at Nokia are as follows: Global Approach Global landscape Agile Deployment-redeployment of resources where most needed Scalable Modeling for seasonal nature of recruitment Consistent Process fundamentals need to be the same, brand consistency and administrative excellence Simplified Define interfaces to business, reporting lines, resources to front line Execution Speed Focus only on essentials and execution: service levels, process, employer image, talent sourcing, hire quality Fact Driven KPIs, SLAs, cost per hire, etc. Transformation Agent Driving recruiting into strategic capabilities and diversity focus areas, recruiting can be the change agent the gatekeeper Accountability Personal accountability on service levels, quality, follow-through, commitment to build world class recruitment team

The steps involved in the recruitment process are depicted in exhibit 1.

RESOURCE PLANNING FOCUS


The Resourcing Framework and Policy defines the different resourcing options closely. The framework is about applying total resourcing efficiency considerations when making resourcing decisions. The overall goal is to balance the use of own employees and external resources. The policy includes the definitions and practical instructions (e.g. how to use external resources, and what are the limitations).

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Please refer to exhibit 2 for diagrammatical representation of components of workforce maintained at Nokia.

OBJECTIVES OF THE GLOBAL RECRUITMENT PROCESS:


To find competent candidates with potential and person qualifications in line with Nokia's business objectives, requirements of the position and Nokia Values in cost efficient timely manner. To ensure that selected candidates are well-suited for Nokia and the position through proper assessment, reference check and background clearance of the candidates Supports building balanced teams and increasing diversity through recommendation that diverse candidate(s) are included in the interview round. Enables business benefits of diversity including increased innovativeness, customer understanding as well as top talent attraction and retention. Reflects Nokia brand and Nokia employer image and Nokia values from the recruitment communication material to closing the recruitment. Recruitment advertising is consistent and according to guidelines Following the correct global recruitment process in the system is very important and beneficial to all parties. The process is designed to provide fast and efficient recruitment; it saves everybody's time and makes the process smooth and transparent for all the candidates as well. Ensure consistent and seamless experience for all the stakeholders of the process across the globe

PERFORMANCE MANAGEMENT SYSTEM AT NOKIA:


Nokias Performance Management process helps us achieve in aligning individual and company aspirations. It does this by supporting an ongoing dialog between employees and their Managers / Coach encompassing all aspects of performance, development and reward. It aims to create an organization where employees understand and feel attached to their objectives, continually discuss their performance with their Managers / Coach, receive transparent 360 feedback and get rewarded based on the results achieved in accordance with Nokia values. The two main components of performance management at Nokia are: 1. Goals and objective setting 2. Achievement Review

GOAL AND OBJECTIVE PLANNING:


This helps translate Nokia strategy into team and individual employee objectives; and, achievement review measures the performance outcome and results over the previous six months against the agreed objectives.

PERFORMANCE EVALUATION/ACHIEVEMENT REVIEW


This is an annual comprehensive feedback on the overall performance of the employee for the past year, designed specifically to provide input for rewards and recognition.

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Performance Evaluation helps ensure that all employees receive constructive feedback on their performance and development. Through Performance Evaluation the employee gets a positive reinforcement of the strengths, and gets constructive feedback on how to improve performance. Performance evaluation helps both the employee and employer. As an employee: 1. It helps analyze an employees own performance over the last one year, and plan for improvements 2. It helps consolidate and share feedback from key stakeholders with the manager 3. It helps to analyze how the performance outcomes were aligned to the companys values Performance evaluation gives equal weight to both halves of the performance equation: What was achieved How it was achieve The performance management review for the bonus component of the pay happens once every six months, while any yearly hikes in pay is mainly attributed to the base pay, and the reviews are done by the line managers. The base salary review for each country happens in the corresponding financial year (April 1 st to March 31st for India), whereas the review/appraisal for bonus component happens every six months starting January. The employees are measured on what and how of their work in the last year, and the ratings are grouped into bands (above/below expectations for example). For the bonus component of the pay however the ratings are not grouped into bands, and hence for the bonus component the firm uses the actual ratings along with the funding factor to compute the bonus earned by the employee.

TRAINING AND DEVELOPMENT AT NOKIA:


At Nokia a lot of attention is paid to the training and development of its employees. It considers employees as one of its most important assets and it has well laid out plans to meet their needs. Nokia motivates its employees to start their development with themselves as their first step followed by career and these are based on their role in Nokias business. They have well laid out documents on Nokia's career development philosophy, so that employees know what Nokia expects from them and the support that Nokia provides them.

DEVELOPMENT ASSESSMENTS AT NOKIA:


The company encourages self awareness as an important foundation for personal development. The methods used for self assessment are standard well researched methods. The typical development assessment consists of 4 key steps:

IDENTIFICATION OF DEVELOPMENT OBJECTIVE


Clarify as much as possible the reasons and purpose for the assessment, e.g. is it to support individual reflections about career aspirations? Is it to get a better understanding of the leadership strengths and related development areas?

SELECTION AND ORDERING OF THE ASSESSMENT


Currently the following assessment methods for individual contributors are used: o Developmental 360 degrees feedback o MBTI o FIRO-B SECTION B

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The following assessment methods are used for leaders/potential leaders: o 360 Leadership assessment o MBTI o Decision Styles o FIRO-B

TAKING THE ASSESSMENT AND RECEIVING 1:1 FEEDBACK


The employees receive the assessment report in a 1:1 feedback session The company maintains a pool of accredited feedback facilitators. The employees themselves need to find one facilitator before taking assessment test in case of one among MBTI, Belbin and TMP For L360, Firo-B and Decision Styles the feedback facilitator is assigned by the assessment administrator.

INTEGRATE ASSESSMENT RESULTS


The assessment report helps create insights, but insights alone are not sufficient to create behavioral changes. Hence the company ensures that these insights are shared with the manager/team and are used to reform the individual development plan of the employee.

CAREER MANAGEMENT:
In Nokia, the HR team has implemented plans so as to align development of employees towards their career choices, there by infusing a sense of trust towards the company as well as enhancing job satisfaction. (EXHIBIT 3) Career Self Reliance is Nokias Career Development philosophy. It means that The ultimate responsibility for the long term career development of any employee rests with the employee himself and no one else. The role of the manager or coach is to support career development mainly by providing a supportive environment and coaching: helping the employee to recognize and utilize his/her strengths and also agreeing planned career development actions that are executed Nokia aims to provide a stimulating environment and tools that support career development

Nokia creates this environment by: Development discussions and joint efforts through the continuous process of objective setting Promoting a "70/20/10" approach towards development - making every day a learning day by 70 - Identifying challenging experiences/situations/available projects that develop required/desired competencies 20 - Creating self-awareness through assessment and mentoring/coaching relationships 10 - identifying training for a required/desired new skill in order to apply it in your job immediately

INTERNAL JOB MARKET (IJM)

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Nokia recognizes the need to provide not just time but also real opportunities for an employee to seek jobs that excites him/her. The IJM is a portal that helps individuals browse through opportunities in work areas as well as geographical locations so as to seek a change from their current work. On applying, the line manager of the team to which the employee has applied has the discretion to process the employees case further by conducting interviews etc. Once the line manager of the applied to team reaches a decision to agree on the employee inclusion, then the line manager of the present team and that of the applied to team may discuss and agree for the transfer of the employee to the new team. The impact of having such flexibility is increased job satisfaction, motivation among employees, and reduced levels of attrition.

70/20/10: ORGANIZATIONAL IMPACT DUE TO FLEXIBILITY


In the paper titled The Effects of Flexibility in Employee Skills, Employee Behaviors, and Human Resource Practices on Firm Performance by Mousumi Bhattacharya, Donald E.Gibson, and Harold Doty, the authors mention employee behavior flexibility being one of the three components through which HR teams aim to help the firm internalize HR flexibility. As per the paper: Employee behavior flexibility represents adaptable as opposed to routine behaviors; it is the extent to which employees possess a broad repertoire of behavioral scripts that can be adapted to situation-specific demands. Flexibility of employee skills is the number of potential alternative uses to which employee skills can be applied In the paper the authors hypothesize that there is a positive co relation between both these flexibilities and the firms financial strength. Both the hypotheses were supported through statistical analysis applied on data obtained through a survey. Nokias 70/20/10 plan is a step in making use of the following opportunities with respect to optimum use of the available human resources: 1. Providing a platform for people to choose, acquire and demonstrate their skills in multiple fields. 2. It is an opportunity for the firm to develop a pool of employees with broad based skills(employee skills flexibility) . It is actually quite pertinent in case of Nokia, where the firm is slowly changing its stance from purely product developer to solutions provider. In such a customer oriented view of the operations, it is a great advantage not just to have people with broad based skills, but also give them a chance to positively influence the organizations top line. This is the agile approach to maintaining the workforce that we will be seeing about later in this report. 3. With such a flexible plan, the firm is more likely to attract people who are confident of their abilities, want to try out new things, and more often than not are much more performance and target oriented. Such people are also less likely to leave the company, and hence the firm saves recruitment & training costs, and also saves from losing talented workforce to competitors.

70/20/10: ENABLING WORK VIRTUALIZATION


In the article on Virtual and Mobile Work at Nokia (refer.) the authors mention the two main challenges facing Nokia as of 2007 as: the increasing complexities of the work and the increasing virtualization and collaborative nature of the work. This comes as a direct consequence of the high competition and need for fast response in the mobile market, and hence the more recent shift in Nokias operations to more of a solutions provider than an outright product developer. In such air tight competition, having a pool of multi skilled professionals is a direct competitive advantage to Nokia. The 70/20/10 work structure not only helps the firm identify resources for such a pool, but it also increases the level of employee adaptability. This in turn helps decrease the transaction cost of shifting employees from one team to another, and acts as an enabler to the virtual work environment (that the GROUP 11 Page 9 SECTION B

nature of the industry demands). As a result the time that an employee in a new team takes to contribute visibly to the top line decreases.

COMPENSATION AND BENEFITS:


Nokia rewards employees competitively through a global reward framework designed to recognize individual contribution and achievement. In all cases, actual cash compensation is determined by the local labour market and takes into consideration both individual and company performance. (The various types of costs to company are pictorially represented in EXHIBIT 4) Employees are rewarded for good performance, skills and competence development, and for overall company success. These rewards come in a variety of ways, including regular salary, various kinds of incentives, bonuses, career advancement opportunities and other kinds of benefits. An employee's total cash remuneration consists of a combination of the basic salary, and a variable part. The basic salary is set based on market conditions, the demands of the job and on individual competence and performance. The variable part may consist of incentives or bonuses, and other compensation, for example, in the form of overtime pay. Eligibility to an incentive plan will be defined by the content and nature of the employee's job. The incentive/bonus categories are listed below. Nokia Connecting People Bonus Short term Incentive Plans Program/ Project Incentive Plan Team or Production Incentive Plans Achievement Awards Any other as decided by the management from time to time

STRUCTURE OF COMPENSATION:
Nokia follows a pay structure consisting of a fixed and a variable component. The variable component on an average forms about 10-30 percent of the base pay. This is awarded half yearly to the employees and is linked to the performances of individual, company and the team, and it also carries some linkage to the overall customer satisfaction (internal as well as external customer as we will see in the following description of the practice). Nokia follows the 70-20-10 rule in structuring the variable component of the compensation as well (we saw a similar division, only time wise, in career management earlier). The description is as follows: 70% of the variable paid out is directly linked with companys performance in the last half year 20% of the variable component is linked to the performance of the individual, based on the goals set at the beginning of each half year, and corresponding assessment of the performance by the line managers 10% of the variable component is linked with the performance of the team of which the individual is a part of

Besides factoring individual performance based on prior goals set, Nokia performs a statistical analysis of the product/feature under consideration (i.e. the product or feature that the individual is involved in development/enhancement of). The exact parameters taken up for analysis vary with the different life cycle stage that the product/feature is in. For example, if the product has been launched in the last 6 months, then the customers and their tastes form the main part of the survey, and hence all related parameters are taken up for statistical analysis. But in case the product has only just moved in to the testing phase then the testing team would be the internal customers who will form the sample of the survey being performed. Nokia computes a universal factor (applicable to the whole of company for all geographical locations) based on a weighted sum of the different customer satisfaction ratings obtained for products/services. This is called the NFF (Nokia Funding Factor).

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On an average the products/services which hit the market during this period are awarded the highest weight, and the products/services that are still in the development phase are awarded the lowest weight. This is multiplied with whatever rating is obtained by the individual. (Assume variable component is 15% of base pay) If the NFF is more than one this means that the bonus component for this half year would be more than 7.5% of the base pay, and less than one would mean less than 7.5% of the base pay as the bonus component. We will see the implication of using such a factor in the following section.

IMPLICATION OF USING THE NFF:


The use of the NFF clearly points to the fact that Nokia puts great emphasis on the performance as measured by the customers. Also since greater the performance/satisfaction of the customer with respect to the product/feature, greater is the revenue, and hence the name Funding Factor. Hence this gives a valuable option to the company whether to award a bonus in excess of the stipulated average or not. Also since this factor is so objectively measured, the risk of making errors (for example under compensating in success scenario and over compensating in failure/average success scenario) is minimized. Hence Nokia does very well to drive home a point that the employees are unlikely to ever argue on: employee satisfaction will be directly related to customer satisfaction. This results in minimal grievances and higher satisfaction and motivation from the employees.

BENEFITS
In addition to the compensation discussed above Nokia awards its employees the following standard benefits: Provident fund and gratuity Transport Crche Canteen Medical benefit and insurance Health care at centers maintained by Nokia Work from home

SUMMARY
Over the years, Nokia has evolved both organically and inorganically. It has always paid been very receptive of changes in the industry that it operates in, and it has been a strong follower of its goals. To support its corporate strategy, it has undergone three structuring changes in the past six years in order to adapt its business model and culture. This has helped Nokia to be a step ahead of its competitors. The extent of objectivity that the HR team at Nokia follows in all its policies (especially in the case of compensation) helps the firm know its position exactly, links customer satisfaction with employee satisfaction amicably, which in turn reduces attrition and helps keep recruitment costs minimum. The half yearly (worldwide and hence expensive) survey performed by the company in order to award the employees exactly in line with the customer satisfaction, clearly demonstrates the commitment of the firm to be receptive of the customer preferences, the feedback from which helps the company re align faster than its competitors and last but not the least, maintain a high level of objectivity and causality in every decision that it takes.

REFERENCES:

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http://www.donaldegibson.com/files/Effects%20of%20Flexibility_0.pdf http://www.veforum.org/projects/264/Issues/eJOV%20Special%20Issue%20.Limits%20of%20Virtual %20Work.%202007/eJOV_SPI8_Vuorio_Virtual%20and%20Mobile%20Work%20at%20Nokia.pdf

EXHIBITS EXHIBIT 1: GLOBAL RCRUITMENT PROCESS

EXHIBIT 2: RESOURCE PLANNING GROUP 11 Page 12 SECTION B

EXHIBIT 3: CAREER MANAGEMENT

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EXHIBIT 4: COMPENSATION

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