What came first: The chicken or the egg?<\/p>\n
Since the amniotic egg showed up roughly 340-odd million years ago, and the first chicken evolved around 58,000 years ago, at the earliest, it\u2019s safe to bet that the egg came first. So says the Australian Academy of Science.<\/p>\n
But the case under discussion today is a bit more complicated than the egg-and-chicken question.<\/p>\n
Like last week\u2019s column, this one too is about human resources (HR) practices in the financial sector. Note: I am merely narrating the incidents as they unfolded; not saying who\u2019s right and who\u2019s wrong.<\/p>\n
The assistant general manager (AGM)-HR of a large listed housing finance company, in which a public sector bank is a majority stakeholder, claims that on October 26, 2024, he sent an email to the firm\u2019s managing director (MD)\u00a0&\u00a0chief executive officer (CEO) and deputy managing director (DMD), pointing to the alleged influence the mortgage firm\u2019s general manager (GM) had on the recruitment process. Some four-and-a-half hours later, at 7 pm, the company handed over a transfer order to the AGM.<\/p>\n
The AGM claims he was punished for blowing the whistle. The management\u2019s version\u00a0is different: The AGM, being part of the HR department, was aware of his impending transfer, and his email was an attempt to stall it.<\/p>\n
Why was he being transferred? Well, the management\u2019s version is that he was not doing well with the new assignment, and it was felt he should be part of a department where he would be able to deliver. The executive, however, stands by his version, that he\u2019s\u00a0paying the price for resisting a GM\u2019s overarching influence on HR issues.<\/p>\n
I am not privy to any confidential information. I am simply trying to reconstruct what actually happened from different sources, including media reports. This is a listed firm \u2013 one of India\u2019s top 10 mortgage companies, with a loan book of around Rs 38,000 crore. It has 1,178 employees on its rolls, operating through 219 offices across India.<\/p>\n
The “whistleblower”, who had earlier worked as a cluster head and head of the mortgage firm\u2019s branch at Bengaluru, was transferred to its Bengaluru head office on April 22, 2024, as chief manager-HR. This was part of the succession planning in the HR division. He was to be made the new head of the division by April 2025. Joining as chief manager, he has had a tenure of over two decades in the firm. He was chosen for this since he had studied HR long ago.<\/p>\n
He was promoted as AGM-HR in July 2024.<\/p>\n
The executive\u00a0was apparently upset over the alleged influence of a GM over the recruitment and selection of employees.\u00a0He\u00a0felt that the department\u2019s integrity was being compromised.<\/p>\n
Initially, the HR department was accommodating the GM\u2019s requests, but over time, those requests had turned into demands, leading to unwarranted interference in the hiring process, which started affecting the morale of the employees as well as the quality of new recruits. Or, so the AGM felt.<\/p>\n
On August 23 and 24 last year, he, accompanied by two other members of his team, a manager and a deputy manager, informed the MD\u00a0of the firm of their concerns.<\/p>\n
Even before that, on May 29, he claimed to have red-flagged \u201cmalpractices\u201d in the recruitment process.<\/p>\n
What\u2019s the recruitment process in the mortgage firm?<\/p>\n
The candidates\u2019 biodata is sourced from various job portals and recruitment agencies (there are three such agencies). Aspiring candidates can also directly apply. In the second stage, the shortlisted candidates are interviewed virtually. Allegedly, the GM concerned manipulated the marks to \u201cmanage\u201d the selection process. He is also the person who signs off the final offer letters.<\/p>\n
What are the alleged malpractices?<\/p>\n
The allegations are: The GM concerned kept sharing CVs of people he knew well \u2013 his friends and relatives \u2013 and pressuring the recruitment team to shortlist and select them. He would even decide on the locations they would work at after being appointed.<\/p>\n
Most of these successful candidates hail from one particular region of southern India and from the Maharashtra border. The mortgage firm is allegedly treated as a dumping ground for educated, unemployed youth, many of whom are related to employees of the parent bank and the firm.<\/p>\n
When the GM reportedly turned abusive on the phone and started threatening to remove the AGM from the HR department, the executive took it up with the company\u2019s MD and DMD.<\/p>\n
That was on October 26, 2024 \u2013 the day he sent the email and was handed a transfer order. From Bengaluru, the\u00a0AGM\u00a0was transferred to a Hyderabad branch.<\/p>\n
After the transfer, on October 30, his complaint was sent to the board\u2019s audit committee, which appointed another AGM of the inspection department to probe the allegations.<\/p>\n
Early November, the investigating officer mailed a series of questions to the complainant.<\/p>\n
On December 26, almost two months after the allegations were made, the MD, DMD, the investigating officer and the AGM concerned discussed the matter over video conference. At that meeting, all allegations were quashed since nobody testified to his claims.<\/p>\n
At that point, the media as well as the statutory auditors of the mortgage firm took note of the matter.<\/p>\n
Subsequently, another committee was set up with the DMD as the inquiry officer. This time, too, the committee gave a clean chit to the GM.<\/p>\n
Going by the management\u2019s version, the complainant had studied HR long ago, but did not have the expertise in the area in the current context. The management was of the view that he is good at recovering bad loans, and the transfer was to get the best out of him.<\/p>\n
It maintained that there is no link between his letter and his transfer. In fact, he had written the letter to prevent his transfer. Most importantly, it argued that the AGM concerned was part of the appointment process. He had agreed to all appointments, but had later backtracked. The firm has only one GM who oversees almost every division of the business, including HR, but is not directly involved in the recruitment process, the management maintained.<\/p>\n
Even so, a few questions remain. If indeed the executive concerned is not good at HR, why was he sent to handle the department in the first place? Why did he get a promotion (from a chief manager to AGM) within months of getting on the new turf? Why was another AGM appointed to probe the alleged misdeeds by a GM? Why wasn\u2019t the GM concerned kept out of office during the inquiry?<\/p>\n
There are answers to these questions, too. For instance, the AGM who probed the allegations is senior enough for this task since he oversees risk-based internal audits and reports to the board\u2019s audit committee. And since the GM concerned oversees other businesses as well, he could not be kept out of office. Apparently, the second round of probe found that certain appointment-related processes needed to be streamlined, but that there were no malpractices.<\/p>\n
Incidentally, at least three writ petitions related to the company\u2019s HR affairs are currently being heard at three different\u00a0high courts. These pertain to wrongful suspension, termination, and a questionable domestic inquiry process. Then again, the number of such petitions isn\u2019t high for a company of this size. But the question remains, in this case, what came first: The “whistleblowing” complaint or the transfer order?<\/p>\n
More than half of whistleblowing complaints made in 2024 were HR-related, according to a recent survey by Safecall, an outsourced whistleblowing software and services provider. It defines \u201cHR-related complaints\u201d as those that HR could be responsible for resolving, including complaints about bullying, discrimination and unfair treatment. The statistics in Safecall\u2019s annual whistleblowing benchmark report are drawn from its own database of over\u00a0five\u00a0million employees from more than 1,000 organisations worldwide. So, any idea what came first in this case: The chicken or the egg?<\/p>\n
The author, a Consulting Editor of <\/strong>Business Standard,<\/em><\/strong> is a Senior Advisor, Jana Small Finance Bank.<\/strong><\/p>\n This column first appeared in <\/strong>Business Standard<\/em><\/strong><\/p>\n