Janalakshmi Financial Services' HR Dilemma
V. S. Radhakrishan, CEO of Janalakshmi Financial Services, one of India's largest urban microfinance organizations, was facing an HR dilemma. The sales force at JFS's biggest division, Retail Financial Services, which focused on the distribution of small group-based loans, was experiencing declining productivity, and a high and above-market attrition rate. Radhakrishnan knew that as a microfinance institution, JFS's success rested on the performance of its salespeople. He had directed HR to undertake a thorough review of the existing salesforce compensation scheme, and devise changes that would both inculcate a performance-oriented culture, and lower the attrition rate. He had also asked HR to find ways to align the incentives of salespeople with the firm's social mission of serving the urban poor. HR had proposed several changes to compensation policy, but Radhakrishnan was unconvinced about many of the recommendations. He needed to make quick decisions; he had to present his views on HR policy changes to the company's board of directors in a few hours.