Saturday, August 26, 2006

Kiran Mazumdar Shaw on the status of women in Indian companies

Kiran Mazumdar Shaw, CEO of Biocon and India's richest woman, was interviewed by ToI on the occasion of Women's Equality Day. She says the right things for almost all of the interview, but drops this bombshell right at the beginning:

Can you think of financial incentives that government can provide women?

In the corporate world, women in the workplace may be encouraged by:

Extending additional subsidy for new industrial enterprises that employ more than, say, 30 per cent women in their workforce; offering special financial incentives for women entrepreneurs, particularly those from economically poorer sections of society; and offering subsidised vocational training for women from disadvantaged sections seeking self-employment.

The other suggestions are unexceptionable, all right. But, with all due respect to Ms. Mazumdar Shaw, her first suggestion is utter nonsense: "Extending additional subsidy for new industrial enterprises that employ more than, say, 30 per cent women in their workforce".

This suggestion frames the 'problem' in a totally counterproductive way. It takes the current practices (which are atrocious; see below) as a given, and assumes that 'incentives' will somehow get firms to do the right thing.

What we need is for the government to define the norms for fair and non-discriminatory employment practices, and punish the violators. In other words, we expect firms to do the right thing, and punish them for wrong-doing. Just as we punish them, for example, for polluting our rivers, or groundwater, or air. Discriminatory and unfair employment practices are no less corrosive than pollutants in our rivers.

Just how bad are the current corporate practices? In the same interview, Mazumdar Shaw says:

Women find it harder to get jobs than men, even if they are equally or better qualified. And when they manage to find one, they constantly have to contend with sexual discrimination and innuendoes at the workplace. In the organised sector, they are often overlooked for promotions.

In many companies, the glass ceiling is in evidence. [...]

Given the serious nature of these problems, what we need are regulations that (a) give exemplary punishment to companies (and their promoters) for practising discrimination, and (b) mandate disclosure of information such as:

  • number of men and women at different levels of the organization
  • number of complaints of discrimination and harassment filed by the employees in a given year, and how many of these complaints have been resolved.

As they say, sunshine is the best disinfectant.

A lot of HR management theory tells you that, for changing a person's behaviour, reinforcing good behaviour is better than punishing bad behavour. As a five-year old's father, I can tell you that this is sound advice. However, firms are not persons! They -- and their managers -- need clear rules for good, normal, acceptable corporate conduct, and well-defined punishment for violations. This is the way affirmative action is implemented in the US: you are expected to be an equal opportunity employer, and if your employment practices are unfair and discriminatory, well, you don't deserve federal contracts! [See this site.]

Is there any role for incentives in altering firms' behaviour? Sure, there is. Use a rating mechanism to give gold and silver stars to firms that aim for -- and reach -- excellence in fair employment practices. Or, give awards to those firms that keep doing this consistently. Such awards, and gold and silver stars will give the good firms a chance to brag in their advertisements and on their websites. This is the way to go; not some shady bribes in the form of 'financial incentives'.


  1. gammagal said...

    well, I'm not so sure about things being so fair for women in the US. They often come up with legal ways of getting around the discrimination laws..and even though organizations are not people, they are certainly run by people who bring their personalities/cultural biases with them. But, nonetheless, I do agree that it helps to have some of these laws in place, and there are cases every so often where you see a nobel laureate being booted out of a major institution due to sexual discrimination charges..