A 2400-year-old HR Theory that Builds Empires

When we talk about the origins of modern management theory, we often start the curve from F.W. Taylor’s Principles of Scientific Management, authored about a century ago in 1909.

The evolution of the practice of managing people since then has gone through various stages, from Labour Welfare to a more organized form called Personnel Management, then to Human Resource Management, and now, to ever-complex, empathetic, and most-strategic People Management.

Managing human resources or people is mainly based on the edifice of motivation, the stimulus you provide to a person for doing a particular job, and staying loyal to you.

This simple-to-use yet hard-to-master concept of Motivation is utilized in all organizations today, by taking inspiration from various motivation theories, Maslow’s Need Hierarchy Theory (1943) being the most popular of them all.

Now, what if I tell you that there’s a centuries-old management theory that not just discusses the concept of Employee Motivation but also structures a complete HR cycle. This theory was authored about 2400 years ago (yes you read that right!). It holds its relevance even today – and will probably continue to do so forever. The theory is given by India’s pride Chanakya, one of the most advanced and brightest minds known to have ever existed. The theory is:

Sama – Dana – Danda – Bheda

Most of us might have heard this string of words plenty of times before but never really knew what it meant.

It means, 

Collaboration – Reward – Punishment – Separation: The entire HR cycle summed up in 4 words

Here is a short description of each of these four “Upayas”: –

Sama ~ Collaboration: It implies finding the right person for the right job and then ensuring a mutual win-win situation by aligning his or her individual goals with the organizational goals. The employer must make sure that every person in the organization feels like an integral part of the larger team. An efficacious collaboration requires attentive listening. If a person feels that he is understood by the people around him, his problems have ears, and his struggles have supporters, then he will be there for you when you would need him the most. This is the foundation stone of every relationship and any cracks left unfilled during this process can vandalize the whole ecosystem in the future.

Dana ~ Reward: At the end of the day, all conversations boil down to this – the monetary and non-monetary compensations one receives in return for loyal services to an organization. Salary, bonus, increment, promotion, wellness benefits, medical insurance, housing facilities, vehicle, stock options, personal assistant, etc – everything forms a part of Rewards and Benefits. It goes without saying that an underpaid employee would never work to his full potential. Interestingly, studies suggest that even an overpaid employee is a complacent liability for the company. So, it becomes crucial for HR to strike a healthy balance when it comes to Rewards & Benefits of the workforce.

Danda ~ Punishment: Now this serves as a discipline wand, a motivator but of negative nature. While the high-performing employee enjoys the reward, the low-performing faces the brunt of the management in terms of verbal backlash, pay-cuts, demotions, or even expulsion. In every organization, performance appraisals reveal a bell curve of employees’ distribution, where 70% of them are found to be average performers. Fear of Danda ensures that these employees do not deviate towards the category of Non-Performers and continue to match the outcomes with expectations.

Bheda ~ Separation: This involves parting with an employee in the form of voluntary or involuntary retirement, resignation, or expulsion. It is rightly said that change is the only constant. The people, whether you like, love or hate it, cannot work for you forever. They will leave you when a better personal or professional opportunity comes across their way. For HR, it is important to take this pragmatically and ensure that the HR cycle keeps on running smoothly by not shying away to collaborate with new people and focusing a great deal on their training and development.

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These words of wisdom that continue to guide people-managers are the doctrines that helped Chandragupta Maurya build his enormous empire in 300BC. Even today, with the right essence and execution, these can empower each one of us in building our own!

– Savinay Goel (MBA Batch 2020–22)

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