Behavioral Effects Of Demonetization- Employees & Corporate

Posted by: Sushma Singh

Demonetization is the most aggressive and bold move by Prime Minister Mr. Modi has pave the path to new India - Digital India. Yes past 40 days were struggling for everyone. 

Its a transition phase and adjusting to any sort of change is always uncomfortable in the initial phase. 

HR in every industry is going through almost same employee grievances since past 6 weeks. 
  •  Requests for regular breaks to take care of bank/ ATM visits.
  •  Uninformed leaves.
  •  From ground level even got excuses that they do not have cash to travel through public transport 
  •  Requests for cash salary distribution in new currency. 
  •  Aggressive requests for salary advances. 

Apart from these general request every industry / sector has various type of employment like trainee / interns/ casual/ temporary / contractual which majorly get paid in cash. Their payment disbursement was again a challenge as both the parties employee and employer were not comfortable with bank transactions. 

A set of top management also take part of their salaries in cash against various reimbursement to make their structure tax friendly. Now this demonetization will raise their tax liabilities and HR will be bound to restructure their salaries with new financial year. 

Every organisation maintain parallel economy with in, henceforth All appraisals due for October cycle held back and postponed in many organisation. Also April appraisal will have strong impact on appraisal percentage. 

How HR in organizations can help?
HR can do their bit in promoting a Digital Economy as it is the custodian of managing employees, their expectations & rewards.
HR will need to educate its employees to move to a cash less system and also withdraw only what is essential rather than hoarding cash at home, because money supply is limited and almost rationed at this point of time. HR should conduct joint session with leading on line wallet brands for their employees, emphasizing on training of ground staff on use of on line banking and various benefits wallet brand offering to users. 

I strongly believe that HR department should be completely digitized right from first interaction with candidate for getting personal data filled till his full and final settlement cheque. It will reduce the paper burden across various functions in organisation. Complete digitization will make thing more transparent at every level. 

All HR Transactions from Entry to Exit must be digitized – Recruitment, Appraisals, Recognition & Rewards, Training & Development, Career Movements, Employee Life Cycle Operations, Exit All Payment requests & payments to Employees must be digitized and only paid through Bank Accounts irrespective of the status of the Employee – Fulltime, Part Time, Contract, Corporate, Factory, Sales etc. 

Cash reimbursement should be replaced with E vouchers All transactions like salary advance, reimbursements, salary disbursement should be through only on line banking

Positive changes of demonetization observed in organisation : 

 In a span of 40 days people have now slowly started adopting digital life
  •  Live example is swipe machine and Pay TM installation even at tea counter ( In common cafeteria space of building) selling a cup of tea at only Rs. 7/-. 
  • Off roll employees who were not accepting on roll employment too a void statutory deduction have step forwarded to bear deduction and change their employment now.
Its time for a Change and a new India is awaiting for all of us.

Readers can also connect with me on 
 Twitter:        @sushma2050


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