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TATA MOTORS’ TALENT MANAGEMENT FAST TRACK SELECTION SCHEME (B): PAST PERSPECTIVE

Dr. Tripti Singh, Ritu Waila and Dr. Gayatri Phadke wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.

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Copyright © 2015, Richard Ivey School of Business Foundation Version: 2015-07-03

A CHANCE MEETING

Tata Motors Limited’s senior vice-president and chief human resources officer Prabir Jha’s participation

in the human resources (HR) leaders’ conference had been planned much in advance, but it could not

have come at a better time. The name of the next keynote speaker, Visty Banaji, caught Prabir’s attention.

As Tata Motors’ past HR head, Visty had conceptualized and overseen the implementation of the fast

track selection scheme, known as the executive selection scheme (ESS), way back in the late 1980s.

During the break, Prabir approached Visty. After exchanging pleasantries, Prabir cut to the chase,

Mr. Banaji, this chance meeting seems like a portent of fate. While I am still learning and

discovering the challenges in my 10 months of working at Tata Motors, very clearly, the number

one challenge is really about talent. And, you will agree, at Tata Motors no talk of talent

management is complete without the fast track selection scheme (FTSS). I understand it began

under your guidance?

With a twinkle in his eye, Visty said, “Ah, you are referring to my baby! Well, well, well. I will be happy

to talk about it.” Glancing at his watch, he continued, “It is so close to my heart but I am not sure I can

remember all the details. It was called ESS (executive selection scheme) back then. How much time do

you have?”

Prabir studied Visty’s face for a moment, wondering how to press for more. “I realize I have caught you

off guard. Let’s do this,” suggested Prabir, “Let’s check our calendars and meet up soon, say next week? I

am keen to hear you talk about your baby,” smiled Prabir. “Will that work for you?”

“Yes, that should be fine,” agreed Visty. “And please, refer to me as Visty,” he smiled.

BRIDGING THE OLD WITH THE NEW

Two weeks later, Prabir walked into restaurant and waved to Visty, who was already seated. “Thank you

so much for this, Visty,” said Prabir, “I really appreciate you taking time out of your busy schedule.”

Page 2

Seated with Visty were two other gentlemen — V.K. Verma and K.R. Sreenivasan. “Prabir, I took the

liberty of inviting my ex-colleagues from Tata Motors — Mr. V.K. Verma and Mr. K.R. Sreenivasan. I

credit a lot of work that went into ESS to these two.” Prabir was touched by how much Visty still cared

about the FTSS program. “That’s wonderful, nice to meet you,” he said.

Appreciating that they were pressed for time, Prabir got to the point. He explained his concern over the

talent shortage dilemma faced by Tata Motors and his pressing need to revamp the talent management

strategy. This meeting, he hoped, would help him to better understand the key objectives ESS was meant

to address in 1991. Looking back in time would give him the much needed insight to help align FTSS to

the changing business environment at Tata Motors.

LIKE A GAME OF CHESS?

With an affable smile, Prabir added, “I am sure you gentlemen enjoy a game of chess.” Having caught

their attention, he continued,

Don’t worry, I have not called you here to play. I am trying to use it as an analogy to get my point

across. You will agree that the rules of chess are not very difficult to understand, nor is it difficult

to master the elementary moves. But can it be played using the same set of strategies every time?

Even experts are boggled by its sheer complexity. Doesn’t it take time and experience to adapt to

every game, every player, every new move?

He continued,

I am hoping to leverage on our collective experiences to help me derive the best from FTSS. I

look on you to help me fathom the complexities associated with running a high potential program.

The business challenges of the automobile sector have changed dramatically leading to an

exponential rise in opportunities and scarcity of talented people to fill these positions. Our need is

for more and more quality talent. But at the same time, there are more jobs chasing lesser people

causing employees to jump jobs. Does it sound similar to your predicament when you began

FTSS?

“Well, a yes and a no,” replied Visty.

I hope you don’t mind if I refer to it as ESS. That is how I remember it best. You are right when

you say that ESS came into existence to identify and nurture quality talent. But it differs from

your need because we never designed it for the masses. It was meant as a niche program meant to

spot and groom a select few. I hope I am making myself clear.

There was a collective nod from Verma and Sreenivasan, but Prabir looked confused.

TURN ADVERSITY INTO OPPORTUNITY

Visty was the first one to speak,

To help you relate to the context, I speak of an era, pre liberalization. Protected economy and

import restrictions favoured Tata Motors’ market leadership position till the 90s. We were

thriving in a seller’s market. But despite being one of the biggest engineering companies in India,

Page 3 we were unable to retain our young engineers who were leaving in droves. And this came as a

huge bolt for us because the culture of those times could almost be described as a cradle to grave

kind of employment. And why were we so concerned? For one, we believed in developing our

own managers by supporting their growth within the organization. Almost all of Tata Motors’ top

management had built up their careers within the company. It was rare for managers to join the

ranks from outside. Losing these engineers meant losing our future leaders!

“And what was prompting the engineers to leave?” asked Prabir.

Verma filled in, “Most of these young engineers were quitting in pursuit of what they perceived to be a

passport to a better life — a master’s degree in business administration or career options abroad.”

Visty continued,

Our second challenge was our steep hierarchy. I don’t suppose much of that would have changed

even now, but, if I remember correctly, management at Tata Motors consisted of nine hierarchical

levels, excluding the plant head. The promotion policy required a minimum of three years in a

grade. With a hierarchy this steep and promotions every three years, it would take even the most

capable GET [graduate engineer trainee] anywhere between 30 to 35 years to become the plant

head!

And this brings me to our third challenge — because of the promotion policy, the average age of

senior leaders in the executive grade was in the low 50s. With the retirement age set at 60, Tata

Motors had the benefit of their leadership for only a few years. Further, we were anticipating a

wave of future retirements which would complicate the leadership crisis even further. I could

clearly see the writing on the wall. Something drastic had to be done fast.

Sreenivasan interjected,

If I may add, what we also realized was that new positions like sales and marketing would gain

importance in the coming years. What you have to recognize is that our culture was dominated by

engineers. In a company proud of its engineering expertise, sales and marketing didn’t even exist.

We were quite inward looking, if I can use that term.

Verma summarized,

So in short, the retention and culture constraints faced by us precluded our looking outside, and

prevented us from using the conventional promotion system. The solution, we believed, bordered

down to our finding a methodology to accelerate the career path of high potential employees and

groom them early on to drive future growth. They would be the future of the organization ready

to fill in the shoes of retiring executives — something on the lines of polishing our diamonds in

the rough.

He smiled.

“Hmmm . . . your earlier statement now makes better sense to me. Your objective was to create a fitting

alternative to an MBA. ESS was born with the objective of plugging the leak,” said Prabir.

“Right on,” said Visty excitedly. “That’s how it all began.”

Page 4

GENESIS OF THE EXECUTIVE SELECTION SCHEME (ESS)

Visty went on to explain how they envisioned a highly sought-after prestigious program to select and

groom future leaders, provide them opportunities for professional growth and use that pool of talent as an

organization resource. The selection process would be rigorous, training inputs would be best in class and

development roles would be challenging. These handpicked individuals would be given a three to four

grade promotion to TM5 grade (one grade below the executive grade) and placed in high visibility

projects. Their progress would be tracked and necessary guidance in the form of coaching would be

provided to groom them as future leaders.

“Wow! It must have been a revolutionary thought considering the culture back then!” exclaimed Prabir.

The three gentlemen looked at each other and smiled. Visty continued, “Absolutely! In a hierarchy-ridden

organization like Tata Motors, to justify what was tantamount to a 10 to 15-year lead was absolutely

unheard of!”

Sreenivasan added, “We were under tremendous pressure. It was the first time anyone was attempting this

and we had to be absolutely sure that our selection scheme was mature enough to predict this high a jump.

You can imagine the cultural shock of having a 28-year-old in the management team!”

Visty paused for effect and added, “The question was, how would we successfully bring about this

transformation in our organization without having a revolution on our hands?”

Ordering another round of coffee, Sreenivasan said, “We had to be absolutely certain we were making the

right decision. Our proposal had to be viewed as fair, unbiased and well-founded. Also, one major victory

for us was the 100 per cent acceptance by the senior leadership team. In a way, it was good we had their

blessings.” He smiled.

“I am sure an endorsement from that level helped in a big way. Otherwise the general outlook to any HR

initiative is caution. We in HR are notorious for being too tactical and not in touch with reality,” joked

Prabir.

Verma then went on to explain how, amongst the three of them, they scoured every article, every research

paper and any books they could lay their hands on to help with designing the nuts and bolts of a high

potential identification program. With the big picture nailed down, they began working out the smaller

pieces of the ESS puzzle.

“We looked at it as a two-step process — 1) robust, objective selection process and 2) focused

development plan,” said Verma.

“Mind you, there was no guidance available. It was the first time somebody was attempting something

this ambitious,” added Visty.

“I am sure you must have dwelled on a lot of questions at this stage,” Prabir said.

“Exactly,” volunteered Sreenivasan. “Our biggest dilemma was defining the methodology to separate the

wheat from the chaff. We could not bank solely on performance ratings as it is common knowledge that

success at one level does not guarantee success at higher levels.”

Page 5

Visty interjected,

I am reminded of a very simple analogy. If you have seen someone ride a tricycle, can you say

that they will be successful in riding a bicycle? It does not naturally follow, you see what I mean?

Our approach was to conduct some form of potential assessment, a systematic and relatively

objective process in which individuals being considered for promotion are given tryouts to see

how well they can perform at a higher level of responsibility. And after a lot of research, the

assessment centre methodology seemed to fit perfectly with our needs.

He then went on to elaborate on how there were no off-the-shelf solutions available in those days. They

had to create a customized program in-house based on literature available in journals and books. Visty

added,

Assessment centres (AC) were unheard of in India back then, and we could not afford expensive

consultants from abroad. Anyways, you know what happens with off-the-shelf; you create

workarounds and make compromises with the program. In the end, you’re not really getting what

you wanted. However, we did go to SHL London [SHL Talent Measurement in London,

England] to get trained on AC methodology. But that was after the first round. The first round

was all in-house.

“How did you narrow down on the criteria for selection?” asked Prabir.

“We knew which level of employees we were looking to retain. So an employee less than 30 years of age

in the TM2 to TM4 grade with a minimum of two-year work experience is whom we targeted,” said

Verma.

“And what competencies did you define for a successful candidate?” interrupted Prabir.

“Again, we did have a broad idea of our ideal candidate based on interactions with the senior leadership

team.”

“And why place a cutoff at age 30? An opportunity of this magnitude was made available to aspiring

employees for the first time. Wasn’t it unfair to employees over 30 year’s age?” enquired Prabir.

“At the time our focus was on creating a viable alternative to the MBA, which was the career channel we

were pitching against. However, we did realize that placing an age cutoff was not relevant and got rid of it

after the first round,” replied Sreenivasan.

“I am sure after all this talking you would appreciate something to drink. How about another round of

coffee?” asked Prabir.

THE SELECTION PROCESS

The next few minutes were spent in small talk. Getting back to the topic, Prabir said,

This year we have modified the selection process a bit. We had a record number of applicants.

Instead of having all candidates go through the group discussion, we kept the written test as our

first cutoff. What intrigues me is the written test. How did you decide on the test pattern? On

.

Page 6 what basis was weightage assigned to different sections. And were the test papers validated? How

did you decide on the difficulty level of the questions?” (See Exhibit 1.)

“I see where you are coming from, Prabir,” said Visty. He continued,

I don’t quite remember all the details, but simply put, we were the custodians of the program.

Internally we took it upon ourselves to create the test papers. As far as validity is concerned,

many a time we saw validation of our selection instruments in the kind of people we identified

and the kind of work they have continued to do. Outstandingly brilliant people — so refreshingly

inspiring even for me.”

Sreenivasan nodded in agreement. “Gosh, I still remember all the people who came up through ESS. I

remember wondering to myself if these same people would ever have been spotted in the routine way of

things!”

“That is absolutely amazing! But you know, remembering all the successful candidates was possible

because of the small numbers. Today, our needs are much bigger,” said Prabir.

Visty shook his head.

I am glad you brought this up. ESS catered beautifully to the requirement of our time. I think I

mentioned this to you earlier too. The program was never designed for numbers but for quality. It

was meant to be a retention and development tool for our brightest engineers who were leaving to

pursue an MBA. At no stage did we allow the pull of demand or supply to pressurize us into

diluting the stringent selection criteria. In fact, one particular year we had only one employee who

made the cut. We didn’t relax our rules even then.”

“But the cost of running this program! How did you justify it?” Prabir grimaced.

Visty said,

Prabir, we were walking on a very thin line. It was important to maintain a balance. Can you

imagine the drastic effect of one misstep? The credibility of the program would be permanently

corroded! Face it, we were not running a management training institute. We wanted to select the

best — someone who was capable of rising to the top.”

Saying this, Visty paused. He could sense that this was a breakthrough moment for Prabir. Tata Motors’

talent needs today were worlds apart from the early 90s. What impact would that have on FTSS today?

Visty asked,

It is not like the thought of pipeline adequacy never crossed our mind. The fact is by the time I

left Tata Motors in the late 90s, the number of candidates selected had definitely begun to

dwindle. This was obviously because in the initial years, it was the entire reservoir. But tell me

Prabir, does that mean we should dilute our standards?

Prabir didn’t think so.

I agree diluting our standards would be a huge mistake — almost fatal to the program. And HR

need not rely solely on one niche program. Like at Tata Motors, we have varied channels for

Page 7 growth. But all other concerns remaining the same, our need today is completely different — we

not only want quality but also quantity. And correct me if I am wrong, but the need today is even

more for functional experts than general management.”

He explained to them how Tata Motors now had various other career progression avenues. For example,

FTSS comprised three schemes:

1. Executive Selection Scheme (ESS) — Focus on general management competencies for placement in any functional area. Promotion to TM5 grade.

2. Operations Managers Scheme (OMS) — Focus on operations management competencies for placement in plant-based functional areas. Promotion to TM4 grade.

3. Commercial Managers Scheme (CMS) — Focus on commercial management competencies for placement in sales and marketing areas. Promotion to TM4 grade.

He added that there were other schemes such as the technical specialist scheme for technical employees,

development centres and talent pool.

While he was still talking, Visty interjected,

Think about it, Prabir. The automobile sector is recognized as immensely hierarchical as

compared to other industries. In the various schemes you just mentioned, have you created a

hierarchy there? In a way, you are telling the employees who want to grow in operations or sales

and marketing that you are not as good. You do not deserve to be placed on the same level as

general managers?

THE DEVELOPMENT PROCESS

Prabir was still thinking about what Visty had just spoken when Verma said, “Our next big challenge was

to prepare these 20-something-year-olds as future leaders. We made it mandatory for them to move out of

their functions and sometimes even units. Our idea was to remove them from their comfort zone and

muscle-build their experience by cross-functional moves.”

Sreenivasan added,

Not only did this expose the fast trackers to a macro view of the company and its business

environment but it also helped them develop professional networks. Further, we made sure that

the candidates proved themselves under real conditions by assigning them critical live projects.

This gave them the opportunity to gain confidence in making big decisions.

Visty added,

Another side benefit of this was that placing the candidate in functions that were looked down

upon brought respect for those functions. For example, sales function was not considered very

important. Being an engineering-focused company, the perception was that we made a great

product, what does it take to sell it? The only way to overcome that resistance was to pick the best

and place them there. This helped to develop a network and a respect for functions which were

otherwise looked down upon. We banked on this networking.”

.

Page 8

“How were the assignments selected? Were they matched with the candidate’s skill gaps?” asked Prabir.

“No, we gave them a choice of assignments and discussed with them their aspirations,” said Sreenivasan.

“And didn’t you fear losing a functional expert by displacing him / her from his / her core skill?” asked

Prabir.

Visty answered this emphatically,

You are quite right, that was the standard tendency of most manufacturing companies. We lose a

great designer. We lose a wonderful production guy. But ESS was not designed to develop

specialists. That is the greatness of this scheme. We were able to get people who would have

never been released otherwise. To me those were the telltale signs of success of this scheme.

“Hmm . . . ,” thought Prabir, “So this is why the emphasis of selection was not on technical expertise.”

“Prabir, we were plugging the risk of losing this employee to an MBA institute where he / she would have

anyways moved to general management role,” said Verma.

“Forgive me for constantly playing the role of a devil’s advocate, but it is important I understand this in

every aspect,” joked Prabir. “Were you, unknowingly, creating clones of current top management?”

Visty played along,

Well, that is up for debate. Anyways, HRs involvement didn’t end there. The training

assignments were personally tracked by the three of us. When I visited any of the locations, one

of my definite ports of call would be to meet with people on assignments. The level of attention

they got was also special. They got very good assignments and visibility. We would obviously

play up their achievements at the right forums and compliment them in front of their bosses. So

that was all part of the visibility game.

“Really!” Prabir exclaimed. “But maybe that was possible because the numbers were still so small. Do

you think, when the room got crowded you would still be able to give that personalized attention?”

“Absolutely!” remarked Visty. “They are your stars. You have to put that investment in them!”

‘We were also involved in their appraisals till they got into EG grade and the next level. So irrespective of

where the person was, in a way, we were their informal mentors. Corporate HR would keep track of what

they were doing, what problems they faced and intervene with their bosses if needed,” said Sreenivasan.

“Yes,” agreed Prabir. “Let’s not forget the human side of FTSS. Regardless of their success, these

employees will have challenges and may not feel comfortable sharing their true concerns about their

ability to perform at the next level. It will benefit the organization to give them this support.”

Visty said,

And if I may add, the FTSS program should not end with giving the candidate a three to four

levels jump. If you think that now he / she should stay content for the next 12 years, you are sadly

mistaken. This employee is now on an upward trajectory. But, practically speaking, I don’t think

Page 9 that pace can continue forever. Boredom, complacency or frustration is bound to set in. A

successful program should anticipate this and have provisions to counter it. How to do it is open

to debate.”

“This is very insightful feedback, Visty. Striking the right balance between handholding and letting an

FTSS develop on his own is hard but vital,” replied Prabir.

EMPLOYEES ON THE OTHER END OF THE FTSS LADDER

Prabir asked,

Another often overlooked population is the employees who have failed the selection. Especially

when you are so transparent about who is a high potential and who is not, you also have to

prepare for the disappointment of those not selected. They would include employees who may

have missed the mark by a whisker. What steps did you take to cope with their disillusionment?

Sreenivasan replied,

I am so glad you asked this. Like they say in HR, the averages are the ones who will stay in a

company longer. We chose transparency in communication with employees who were not

selected and it was important how we broke it to them. I used to personally manage that

announcement. . . . one of my greatest feelings with this scheme, which I treasure, is the people

who were being explained that they hadn’t made it came up to me after the selection to say that

they had gained something out of this and would try again when the next opportunity came up. I

have also heard from them that the people we had chosen were really the right guys.”

Sreenivasan also mentioned that HR kept track of the career paths of employees who had reached the

penultimate round. Though informally, HR made sure that these employees received better opportunities

and higher responsibilities.

“What I gather is that a lot of the informal interactions came out of your own personal commitment to the

program. It would be interesting to know how this would have changed over the years. Does that sense of

ownership still exist? If not, do we have processes in place to ensure that these loose ends are tied,”

wondered Prabir.

Prabir thanked the gentlemen for their time. The information Visty, Verma and Sreenivasan had so

candidly volunteered had given him the much-needed perspective on FTSS. Mumbai traffic was moving

at a snail’s pace but Prabir did not seem to mind. His mind was preoccupied trying to absorb all that he

had heard. What was he taking away from this meeting? Where was FTSS failing to deliver in today’s

time?

Page 10

EXHIBIT 1: HOW ESS HAS EVOLVED OVER THE YEARS

Institutionalized in 1991, the executive selection scheme is now over 20 years old. The scheme has undergone the following few changes over the years but still retains its original concept and mission:

1. The scheme has been extended to include five Tata Motors subsidiaries — TML Drivelines, TML

Distribution Co., TAL Manufacturing Solutions, Tata Marcopolo India Ltd. and Concorde Motors India

Ltd.

2. The name has been changed to fast track selection scheme (FTSS) in 2008-09 and has three components:

• Executive Selection Scheme (ESS): This focuses on general management competencies and

is suitable for placement in any functional area. • Operations Managers Scheme (OMS): This focuses on operations management competencies

and is suitable for placement in plant-based functional areas. • Commercial Managers Scheme (CMS): This focuses on commercial management

competencies and is suitable for placement in sales & marketing areas.

3. The eligibility criterion has been relaxed to include TM1 grade in 2008-09. The age criterion has been

completely removed. The minimum work experience required has been relaxed to one year

experience within the company.

4. The phases in the selection process are the same but group discussion has been moved to Phase 2 along with the power interview.

5. Post-selection promotion for ESS candidates is still TM5. But for the new streams — OMS and CMS

– the post-selection promotion is to TM4 grade.

6. The duration and number of rotational assignments have been reduced to two rotational assignments

of six months each followed by two months in corporate social responsibility. Earlier, there were four

rotations of three months each.

7. Enhanced development support is provided to the candidate under a mentorship initiative called Anchor Me.

Source: Compilation based on discussion with current and past process owners of the fast track selection scheme at Tata Motors.

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