Organizational Behavior – II :

GA – 5
FabIndia: Weaving Ideology and
Values through Human Resources

Academic Group 36 – Devanshi H (184) | Mayank W (201)

Rahul S (214) | Saakshi N (220) |
Sriram V (231)
What are the strategic business objectives of FabIndia? To what extent does the HR Interventions adopted by Fabindia support / align itself to
attaining those business objectives?

Strategic business objectives

They are those that translate long-term organizational goals into specific projects and purposes that can be accomplished effectively. It makes the Company’s mission more
usable for the management.
Fabindia’s mission was to keep traditional Indian crafts alive and do business, make profit and be answerable to it’s stakeholders. This was further distilled into maintaining
interest in the artisans it employs, providing them a market and direct link to that and upholding customer satisfaction.

The Strategic business objectives and the HR interventions to support them are:

Establishing Community Owned

Companies (COCs)
It gave the artisans a sense of
ownership of their work and greater
decision making rights made their
links to market more impactful and
meaningful.
Identifying Centres of Excellence
(COE)
It set the tone for employee spirit and
store performance. It also encouraged
other stores to strive and attain
brilliant new levels of quantifiable
performances.
Employee- artisan relations
HR practices play a big role here by
placing major emphasis on finding
ideological fits- be it by putting them
through behavioural event interviews
pre-placement, to reminding them at
induction and orientation that the
products they are selling serves as a
preserve of Indian traditional crafts,
to finally including these qualitative
factors in appraisal and assessment
programmes several months down
the line. This serves its mission of
being accountable to all its
stakeholders- owners and employees,
artisans, customers.
Encouraging Entrepreneurship
HR department encourages
entrepreneurship among employees
by offering them senior positions at
COCs. This serves its mission of
translating “a passion for our business
into satisfying careers”
Change in Hiring Policies
Hiring women workers in top
positions brings sensitivity to the
business
Providing stake in business
With over 70% of its employees
having some stake in the business,
their level of commitment and
accountability increases and hence
they put larger emphasis on the
bigger picture- their sustenance
depends on customers appreciating
traditional Indian crafts and artisans
continuing to make it. Thus its
business model of satisfying all
stakeholders becomes self-sufficient:
the employees themselves work to
link these together.
 Which of the HR practices truly qualifies as being “strategic” in securing their business objectives?
For the HR practices to qualify as bring truly strategic, they have to be implemented with a long term focus on achieving the business objectives. On
these lines the strategic HR practices would be:
Hiring for Ideological fit
FabIndia is committed to hiring individuals who are aligned with their vision and
respect the products built by the artisans. They need their employees to value
the work they are doing, and the work they are selling. This is a strategic practice
as these employees would ideally move to higher positions in the organization,
and making them believe in the company ethos would prove to be extremely
difficult.
As these organizational values are tested by integrating them with the
assessment programs, especially at the senior entry level, it would be tough for a
senior level executive to perform well if the ideological fit is missing. FabIndia has
made this process keeping their long term strategy and objectives in mind, with
even a safe-guard of six-month probation and a mid-term review feedback built
into their process to weed out hiring mistakes.
Employees as Owners
One of the clear mandates of FabIndia is The company is here to do business, to
make money and is answerable to its shareholders and employees. FabIndia gave
shares to its employees, thus creating a strong interest in the employees to see
the company do well while creating wealth for them to make them feel invested
in the success of the organization.
Establishment of Centres of Excellence (COEs)
FabIndia used a unique strategy to get the employees interested in getting
trained and using these practices in the shop floor to drive the bottom line of the
company. They identified four stores across the country and named them COEs
based on their brilliant performance on a set of measures. They publicised these
stores and showered them with attention, training, prioritisation and special
treatment.
Other stores were quick to notice this and also understood better training
translated into better sales which in-turn meant higher incentives. Thus the
demand for training increased. This was a brilliant strategic move in the HR space
as companies usually have a problem in getting the employees interested in
receiving the training but this move made the trainings a pull factor as opposed
to the push factors they previously were.
Expressing entrepreneurial culture through COCs
Existing employees are offered the opportunity to join the COCs at a senior level.
These locations are available in the second and third tier cities. Through this
initiative FabIndia promises a good growth opportunity to its employees as
otherwise they would have taken years to be responsible for such a unit. This
also ensured a continuous drive towards creating value for the shareholders and
maintaining operations in those cities with the most hard-working employees
rooting for the success of the company.

After having looked at this from the 7 S framework, we do believe that there is a strategic fit between the approach of the HR and the business
objectives. Below is our verification for the same for FabIndia:
Structure: One of the key stakeholders
for FabIndia were individual artisans.
To make sure their interest is kept
alive, FabIndia facilitated setting up of
Community owned Companies (CoCs)
that function like aggregators and
empower them in decision making. It
also gave its employees opportunities
to become a part of the senior
management in these CoCs. In its
organizational structure, FabIndia also
wanted more responsible and
motivated people, and it achieved this
by giving shares to almost 70% of its
employees across all levels.
Hard S
View on “Strategic fit” between approach of HR and Business
Systems: HR systems and practices like
Behavioural Event interviews for
hiring, assessment programmes,
probation & review process and the
focus on growth from within through
IJPs help them in attracting,
developing and retaining the right
talent that will help in the strategic
implementation of its goals
Strategy: The expansion strategy of
FabIndia includes adding 300 small
format stores in 111 cities of the
country. For this it will need to attract
capable and qualified talent that fits in
with the ideology of the strong artisan
connect. “Hiring for Ideological Fit” is a
step in this direction
Staff: Majority of the staff of FabIndia
is on its rolls, and it does not believe
strongly in contracted workforce. It
also promotes equal opportunity
employment and supports careers for
women at leadership levels
Shared Values: Based on the feedback
and experience of employees FabIndia
has identified seven shared or core
values like honesty, transparency,
fairness in intent etc. The HR team
revisits these values on the shop floor
every six months
Soft S
Style: Style refers to the leadership
approach of top managers and also
how the employees present
themselves to the outside world.
Driven and Responsible are the values
that FabIndia tries to inculcate in all its
employees.
Skills: By establishing COEs and
publicising stores with better
performance and higher sales,
FabIndia made training a pull factor
instead of a push factor.
 What more could have FabIndia done?

Restructuring Gap Analysis

Restructure the HR department to Frequently perform gap analysis to
accommodate more specialists for detect shortcomings of the HR
roles like Learning and Development, department in terms of proper
to meet the increasing requirements assessment of human capital supply
of the growing workforces and demand

High Performance Work

Increasing team size Systems
Implement high performance work
Increasing the team size of HR systems – which is a combination of
dept to increase the ratio of HR to HR practices and processes that
staff from 1:125 maximize employee knowledge, skill,
commitment and flexibility, to achieve
its expansion goals effectively
Thank You !