Sirajuddin Aziz
All organisations, whether in the private or public sector, sport a common slogan: “Human Resources are our best asset.” Is this true, or a fallacy? Or is it a mere cliché? Regrettably, in several organisations, this is just a claim and rarely a reality.
Work ethics and the culture of a society have a direct impact on the human resources of an entity, and on a wider spectrum, the country. We, as a society, have developed our own nuances to the principles relating to the importance of human resources based on our cultural traditions of not challenging the status quo. Dissidents are generally not appreciated for holding divergent views. The mindset of the owners/management is often one of die-hard control.
The command and control aspect is again dictated by tradition, especially in businesses owned by families, or “Seths”.
The mental state of the management, driven by the owners, is one of surrender, while the owners feel that the vision and mission of the entity should remain their exclusive domain. Since the entrepreneur takes on the risk of deploying capital, it is generally felt that they would operate the business with greater responsibility than “hired management”.
In such organisations, governance standards relating to HR are usually relegated to being unimportant. In fact, there is visible disdain for good HR practices. Owner-operated entities in the business history of our nation stand out as remarkably well-managed institutions. However, the concentration of ownership leads to the concentration of wealth, which gives rise to class differences and monopolistic behaviours, ultimately harming HR governance.
This scenario is not sustainable. Our infamous 22 families once faced the wrath of socialism in South Asia during the 1970s. Post-nationalisation, these families splintered into smaller units, requiring them to adjust their stance towards human capital development. HR in family-owned businesses is handled very differently from that in “corporate institutions”, where ownership and management are separate.
There are still Seth-owned organisations in Pakistan where HR remains enslaved to ownership’s whims, displaying despotic, irrational practices. Talent is often suppressed. I’ve heard remarks like, “We want HR that does the work—they aren’t required to think.” Owners believe thinking is their prerogative, not management’s. As a result, the HR function cannot manifest in its full dimension.
In corporate organisations, both listed and unlisted, HR tends to have a pronounced role, as ownership is more distributed. Even majority stakeholders are bound by governance codes, which emphasise the management of human resources. This necessitates a comprehensive HR framework.
Currently, every corporate board must have a sub-committee on Human Resources. Compliance requires organisations to have well-documented HR policies covering daily operations, recruitment, retention, remuneration, succession planning, learning and development, code of conduct, and disciplinary processes. Even indifferent management must maintain such documents, if only for optics.
HR policy should be accessible to all. Yet, some organisations hide it. In one case, the Board-approved HR policy was found not with the CHRO, but in the Chairman’s drawer. In organisations with transparent policies, staff benefit directly, improving both output and morale.
The culture of an organisation is the responsibility of the CEO, CHRO, and senior management. If they violate HR policies, corporate culture is reduced to lip service. Co-workers quickly notice inconsistencies.
Human Resources must remain close to the CEO. Without buy-in from leadership, sustainable human capital development is unlikely. Productivity directly reflects the quality of human resources. Profits are the result of people’s efforts.
Hiring is a critical function. The process must be transparent, free from nepotism. CEOs must form interview panels themselves, selecting trained individuals. Interviewing is both a science and an art.
On a national level, we need to address our poor education indicators. With less than 1% of the budget allocated to education and over 25 million children out of school, the situation is dire. In an age of AI and digital tools, human capital demand is only growing. Getting these children into schools must be a priority.
The development of human capital and the adoption of best practices must remain the responsibility of both the State and private enterprise.
The writer is a Senior Banker & Freelance Columnist.
