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Vishwadeep Khatri

Hammurabi Code

Hammurabi code was a social law that was instituted around 18th Century BC lived a King named Hammurabi. One of the principle in the code is to have 'one's own skin in the game' so that there is no motivation to cheat or cut corners. This has been inspired by the harsh punishments (like an eye for an eye) that were dolled out in case someone cut corners

 

An application-oriented question on the topic along with responses can be seen below. The best answer was provided by Pradeepan Sekar, Senthilkumar G, Selva Mariappan Subramanian

 

Applause for all the respondents - Pradeepan Sekar, Senthilkumar G, Kishan Raval, Selva Mariappan Subramanian, Ram Kumar Chaudhary, Krutibas Biswal, Himanshu Pathak, Pitchai Bharathwaj, Ajay Sharma, Raj Saxena, Satyajit Das, Tushar Maradwar

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Q 263. Hammurabi Code - one of the first law ever written suggests to have one's own skin in the game thus entrusting a moral obligation for fair play. Highlight some of the innovative ways of implementing such moral obligation in an organization?

 

 

Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday.

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HAMMURABI CODE:

 

Hammurabi is the king who ruled from 1792 to 1750 BC in the middle east. The king, Hammuarbi enacted the code in 7.5 Feet Stele stone. It consists of 282 laws describing scaled punishments such as “an eye for an eye, a tooth for a tooth” based on the social groups and consequences of the committed mistakes. This code was found in 1901 and translation in to publication happened in 1902.

 

Hammurabi code is described as “the first code of conduct” which was passed about 4000 years ago. Being the King, who is leader of civilians, he was concerned about the welfare of people which is clearly depicted through his laws.

 

Hammurabi had taught few lessons through his code to the modern business leaders. It has featured some progressive precepts such as minimum wage’s law, innocent until proven guilty, fairness about graded punishment (Famous saying “an eye for an eye, a tooth for a tooth”). His codes of conduct are considered impossibly harsh and authoritative, but most leaders describe his concern as motivation towards the wellbeing of the society and his own civilians.

 

Hammurabi Code – skin in the game.

 

Mainlining the accountability

According to law number 232, if a Babylonian builder built a house with under quality materials which will apparently result in collapsing of the house will leads to death of owner, then builder will be put to death too. Builders build the Babylonian houses with high quality, because builders knew the consequences as default.

 

Risk Evaluation:

The King, Hammurabi encourage the builders to build the houses with more margin of safety to make the structure rigid not only during the predictable situations such as wind, storm, and rain but also in unpredictable situations like earthquake.

 

Incentive Management:

Builders are incented to build with better margin of safety but not cut the corners to pocket more money to the owners.

 

His code which is suggesting to have “one’s own skin in the game” thus entrusting a moral obligation for fair play, addresses the Business leaders of today to mainline the individual accountability, communicating the standards, Incentive management, Risk Management.

 

The issues concerned by the King Hammurabi are often the issues of modern business leaders. Now a days, Organizations are engaging the leaders to find the way of

 

1.   How to maintain employee accountability,

2.   Improving the Quality of execution,

3.   How to drive incentive system,

4.   Defining performance measure with clear KPI,

5.   Rewarding and Reprimanding – its not about punishment, about improvement,

6.   Employee fairness – Sustaining the employee’s morality.

 

 

Ways of Implanting the idea of having one’s own skin in an organization:

1.   Clear roles & Individual Accountability:

a.   When the roles and responsibility of the employees are ambiguous, people struggle to be accountable. Clear definition of the role through work instructions and SOP become a necessity.

b.   Measurable KPI with fair quotient of weightage.

c.    Assigning responsibility to the individuals with clear definition of his role.

d.   Removing confusions such as who is doing what, when, and how makes the person accountable for the successful execution and paves a way for success

 

2.   Team formation and owning the process:

a.   Form, Norm, Storm and perform as four stages of team formation. Leaders play an important responsibility to achieve the fourth stage of team formation.

b.   When team feels truly accountable, they will storm on the gaps, learn new roles and processes, teach to each other, find a way, bring synergy and makes more efficient team.

c.    Each member of the team will become responsible to seek information, give feedback and receive feedback and point out mistakes when it is needed.

 

3.   Autonomous and independent decision making:

a.   Listen to the multiple solutions and brainstorm, most of the problems will have multiple solution.

b.   Improve upon the team’s ideas, rather than imposing your own thoughts.

c.    Give them the freedom and support.

d.   By providing them the rights to take decision, team will increase their skills, confidence, and ownership.

 

 

4.   Communicating the standards:

Standard Operating Procedures:

SOPs are the documents which describes the actions to be taken under several circumstances, it also lays who, what, when and where for the important actions. It provides clear and concise guidelines.

SOP should be the document which is serving at higher level and the detailed instruction should be described in work instructions. The SOPs should be clear, simple, concise and continuously updated. Otherwise it results in instruction creep.

 

5.   Risk evaluation:

a.   Encourage people in assessing the possible failures of the process, get suggested on solutions to overcome the worst-case scenario.

b.   Engage the operational excellence or Business analyst in identifying the areas of risk and scope of improvement.

 

6.   Incentive Management:

a.   Incentive should not drive the process to fulfil what had been described.

b.   Fairness of evaluation is more important to keep employee’s morality high.

c.    Employee should be incented for their additional inputs, their creative and innovative initiatives.

 

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Q 263. Hammurabi Code - one of the first law ever written suggests to have one's own skin in the game thus entrusting a moral obligation for fair play. Highlight some of the innovative ways of implementing such moral obligation in an organization?

 

Hammurabi Code:

 

The code of Hammurabi is a Legal and Ethical Science and well-preserved Babylonian code of law of ancient Mesopotamia, dated to about 1754 BC, the 6th Babylonian King Hammurabi endorsed the code and it is one of the very oldest texts of significant length in the world. It consists of 282 laws with scaled penalties adjusting “an eye for an eye”.

 

Eye for an Eye:

 

If Someone does X, then Y will happen, the simple example is the “Eye for an Eye” principle. In that Case, the rule was that punishment must be exactly equal to the crime irrespective of gender.  The law of twelve tables of Rome simply prescribed the particular penalties for particular crimes.

The actual meaning of the principle “Eye for an Eye” is that a person who has been injured by another person returns the criminal action to the originator in compensation or that an expert does so on behalf of the injured individual. The root principle of this law is to provide reasonable payback to the convicts.

 

Hammurabi Code History:

 

Hammurabi ruled from 1792 to 1750 BC according to the middle chronology, at the head of the stone slab is Hammurabi who feared God, he received the law from Shamash (Sun God, God of Justice, morality and truth and the Queen of Heaven). Hammurabi bring about the rule of righteousness in the land, to destroy the wicked and the evil-doers so that the strong should not harm the weak. Totally 282 laws were agreed in 44 columns and 28 paragraphs in an organized way and one of the oldest writings, some follow along the rules of “an eye for an eye”.

image.png.8e9f0defcd46887157b7929eb9d4e175.png

 

Hammurabi Law Codes may cover the following Laws:

 

The following laws may cover Hammurabi codes and also innovative ways of implementing laws in an organization.

1)     Economic Provisions (Prices, Tariffs, Trade, Commerce)

2)     Contract & Liability Law (Contracts, Terms and Liabilities)

3)     Family Law (Marriage and Divorce)

4)     Children Law

5)     Criminal Law (Assault, Theft)

6)     Civil Law (Slavery, Dept)

 

The code of Hammurabi was trying to attain the following:

1.     Equality

2.     Partiality

3.     Consistency

4.     Damages

5.     Retribution

6.     Biases

 

Laws covered:

 

The respective Laws covered such subject as:

1.     Slander

2.     Fraud

3.     Slavery and Status of slaves as property

4.     The duties of workers

5.     Theft

6.     Trade

7.     Liability

8.     Divorce

9.     Adultery

10.   Perjury

 

Innovative ways of implementing Hammurabi code in an organization:

 

The following simple flowchart provides innovative ways of implementing such moral obligation in an organization.

 

 image.png.1985f9ecbf01e7d4eb4cad05ece01f94.png

 

 

 

Steps 1: Corporate HR – Policy and Diversity & Inclusiveness (Harassment & Discrimination), Corporate Finance, Corporate Strategy/HSE/Security/Risk & Corporate Legal, Ethics & Behavior team together to incorporate Hammurabi codes after considering each subjects of law covered.

 

Step 2: The respective Hammurabi Codes and Law reviewed by respective team as mentioned in Step 1.

 

Steps 3: The respective laws covered for such subjects reviewed by respective team as mentioned in Step 1. The respective solutions and Performance measures reviewed by respective team before implementing Hammurabi Law codes in an Organization.

Solution Evaluation: The following key tasks, purpose and respective inputs may consider during Hammurabi Laws code evaluation. Continuous data output of a well controlled process with controlled inputs are likely to follow a Normal Distribution.

i)                   Measure Solution Performance (Inputs: Business Objective, Implemented Solution)

ii)                 Analyze Performance Measure (Inputs: Potential Value, Solution Performance Measures)

iii)               Assess Solution Limitations (Inputs: Implemented Solution, Solution Performance Analysis)

iv)               Assess Enterprise Limitations (Inputs: Current State Description, Implemented or Constructed Solution, Solution Performance Analysis)

v)                 Recommend Actions to Increase Solutions Value. (Inputs: Enterprise Limitation, Solution Limitation)

 

Step 4: Comply and Declaration would be done by all Employees/Contractors/Vendors. (Once in a 6 months or a year)

 

Step 5: The final output as mentioned in the flow process flow chart, greater performance and high-quality results can be accomplished from respective organization.

The above innovative and easy ways of implementing Hammurabi codes, Laws and Subjects are provided for respective team to review in any organization. Team need to deeply review and evaluate the solution before implementation. The respective employees will comply & declared once in a year accordingly.

 

 

References:

https://en.wikipedia.org/wiki/Code_of_Hammurabi

https://www.iiba.org/

 

Thanks and Regards,

Senthilkumar Ganesan,

Email: senthillak@gmail.com

Mobile: +91-7598124052

 

 

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 Hammurabi CODE is  well-preserved Babylonian code of law of ancient Mesopotamia

SO ITS ONE FOR ONE  

 

EYE FOR AN EYE

 

 

it means if you broke the bone to someone than your enmeshment would be to broke your one  of the bone 

in MNC also this law is used for some instances like if ypu login late than you have to do extra hours 

if you give absent than u have to work in weekend 

Also everyone should be treated as equal (use Heijunka: work load balancing) & No BIAS treatment

 

SO every one is responsible for their own action and they have equal reaction also like KPI based Quarterly payout its the example of whatever you in quarter accordingly you will get paid not more not less

 

EYE for an EYE

 

PEOPLE GET PAID ON THEIR PERFORMANCE AND NO BIAS EQUALITY FOLLOWED IN SALES OPERATIONS

 

PEOPLE GET PAID MORE IF THEY HAVE HIGH SATISFACTION NUMBERS 

 

ADVISOR PUT ON PERFORMANCE IMPROVEMENT PLAN IF NOT DONE WELL SO CUTTING IN SALARY 

 

IF YOU STEAL THE DATA FROM COMPANY THAN COMPANY HAS RIGHT TO STEAL YOUR JOB FROM YOU 

 

IF YOU HAVE HIGH SATISFACTION FROM CLIENT YOU WILL HAVE HIGH CHANCE TO GET PROMOTION

 

 

QUIZ                      What was Hammurabi’s code, and what was its  purpose in ancient Babylonia? What does the expr...

 

 

 

 

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Hammurabi Code - one of the first law ever written suggests to have one's own skin in the game thus entrusting a moral obligation for fair play. Highlight some of the innovative ways of implementing such moral obligation in an organization?

To govern the people under his kingdom so called Mesopotamian society, the king Babylonian (reign 1792-1750 B.C.) enacted set of rules or laws which was referred as the Code of Hammurabi. This code was the first law code and it dictates varying level of punishments to the crimes and also rewards for the wide range of workers. In the code of Hammurabi there are nearly 282 laws which

includes criminal law, family law, civil law, economic standards. The code was derived from the basic principle of “an eye for an eye”, a tooth for a tooth” which may be the fundamental rule of any law but it is applicable to all classes.

Most of the laws are relevant to today’s organisational leadership practices.

 

Law#48 Debt for the loan:

If anyone owes a debt for a loan and in the year end he did not gained profit from his business then, he can be spared for the obligations for that year.

organisations suffering loss of revenue during this covid 19 can be given loan moratorium.

Law#53 Liability:

 If anyone who is not able to keep his assert in basic primary condition and it harms others then it may be sold out to others and the amount may be divided among others who are affected.

This is applicable to organization who can’t able to afford Wages to their workers then the organization was undertaken by someone else to make it under proper functional one.

 

Law#104 Trade:

Policy of exchanging receipts.

Applying this to an organization they must follow the government rules. It is helpful for the government in case of tax return. The transactions are properly maintained as billed one.

 

Law #265 Fraud:

Any loss to the owner is returned by 10 times more as a punishment.

This law is applicable to the fraud activities taken place in an organization. The same person has to continue his job with minimum wage for some duration. Duration is applicable according to the loss amount.

 Law #42  The duties of workers:

If the worker did not work for his wage then owner has the rights to give more works to him.

If anyone did not work on his deliverable and it goes beyond due dates then the organization should take necessary action against the employee.

Law# 221& 224 Rewards:

If a surgeon cures his disease then the patient has to repay as a reward to the surgeon.

Organization has to divide some portion of the profit among the employee’s and should give them as a reward as a part of appreciation of employee.

Law #5 Judgements:

If a judgement is wrong or there is an error and it be through his own fault then he should pay 12 times as a fine.

If any wrong decision is made by an individual in the organization then he has to sell some of his shares to others

Law #275,276,277 rental properties:

If anyone hired a thing from owner he has to pay rent on daily basis.

Businesses are under obligation to pay the rent for the assets they do not own but they use to earn the revenue

Law #261 Exchange policy

If anyone hires sheep, he shall repay in amount of corn as rent.

Organizations can exchange their goods among themselves for the shared services.

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Hammurabi Code : Set of 282 first ever written law in ~ 2000 BC initiated by King of Babylonia. These laws were codified to drive discipline,equality,fairness, resolve disputes as civilization started to urbanize. Law averaged from moderate to extreme when compared to current law for driving civil society; it was also early start of evidence/witness based judiciary.

 

Some of the way in which Hammurabi Code can be adapted to current organization culture to drive/correct behavior are , in some shape and form this is already happening 

 

1. Balancing the equation between Sales Vs Delivery : Sales need to balance commitment to customers based on current capability of Delivery and cost structure. Example - linking deal commissions to actual profitability of client and length of stay

 

2. Aligning HR policy Vs Market Reality : HR policies and practices typically are renewed/refreshed basis extreme events rather then on an ongoing basis to keep pace with market conditions. Example - linking the delivery performance in balance scorecard of HR function to ensure alignment of HR policy to delivery like entry level talent criteria to the talent required by delivery for projects

 

3. Driving the culture of honoring commitment : Multiple leaders and colleagues are bound to make commitments during the normal course of their work day; some of these commitments roll up into larger commitments like while building/proposing solutions. We typically detach post commitment and when we re-engage once the solution comes to delivery stage colleagues start backing/providing caveats to their earlier commitments. This can be addressed via Say/Do ratio metric

 

4. Being responsive : Organization structure, bureaucracy,hierarchy and culture slows down the responsiveness of the organization. Especially from support functions like IT, Finance, HR. There can Uber kind of rating of employees on their responsiveness, when the same set of employees reach out for assistance they get prioritized basis their rating

  

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Who was Hammurabi? –

 

Hammurabi was born Circa 1810 BC in Babylon Morden day Iraq . The lasting contribution of Hammurabi on Babylonian society was a set of laws written on 12 stones and displayed publicly for all to see. He died circa 1750 BC in Babylon. His master creation is Hammurabi’s’ code of Law. Another notable accomplishment was his expansion of city state Babylon to unite southern Mesopotamia. He created one of the first and consistent law codes

 

The law is – an eye for an eye and a tooth for a tooth.

 

The code of Hammurabi sought to organise people’s responsibility to each other.

 

The king of Babylonian complied 282 laws that categorises 3 important concepts for organisation – 1) Accountability 2) Incentives and 3) Reciprocity.

 

Accountability:

 

He recognised the value of having “skin in the game”. The literal meaning is having people to honour the agreement is to hold the parties accountable. When the parties to an agreement have their real skin into the game they care more about outcomes and fairness

 

Incentives

 

 Aligning incentives for Babylonian contractors per the law contractor couldn’t get away with minimum quality structures and standards rather contractors could be incentivised to make the structure sturdy and a predictable condition which can protect against high wind and earthquake.

 

He understood Risk of Risk. Public well-being is difficult when people are cheating each other. The recent scandal in Wells Fargo would have been much less by implementing Babylon’s code where employee has created fake accounts to increase sales quota. people’s sense of risk when it comes to their own skins is calibrated.

 

Reciprocity

 

Communicating relevant standards is the most innovative feature of the code of law. The aim was to make the code easy to understand from a priest to a regular citizen. He had all the rules in a clay tablets and ensure it distributed across the kingdom. Organization should emulate Hammurabi code to communicate standards

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Hammurabi Code, prime purpose was to use political powers to create common bonds amongst diverse group of people in the society. It included what we today call Criminal and civil laws.

 

King Hammurabi, who ruled Middle east from 1792 to 1750 BC created 282 laws describing scaled punishments and enacted these codes in a 7.5 Feet Stele stone. The principles he laid out over 4000 years ago in Mesopotamia were known to be amongst the first code of conduct in the history. Some of these Laws made then were harsh but in some ways were remarkably modern. Hammurabi, although was far more authoritarian against today’s CEO , it is also true that he was considered as the first servant leader in the history.

Some of the Punishments include - If some-one is caught committing robbery, then he shall be put to death. If a man knocks-off the teeth of someone, his teeth shall be knocked out. If a man strike a free-born woman so that she lose her unborn child, he will pay ten shekels for her loss.

Important concepts of vital interest to CEOs today includes accountability, incentives, and reciprocity.

 

Accountability:  As the metaphor says , being “Skin in the game” , Hammurabi recognized the value and essence of the same. He understood that it is must to have defined accountabilities for people to honour their commitments.  

 

Aligning Incentives: The Code of Hammurabi was one of the first attempts to align incentives. It discouraged contractors using minimum quality of materials and standards they could get away with. Contractors were incentivized to build in a factor of safety whereas were given strict punishments in case of any failures.

 

Managing Risk: One of the first attempts again to manage varied sorts of risks in the societies. Hammurabi understood that well-being of the society was difficult when people are cheating each other, and structures were failing. He created these codes to manage risks and produce results for the benefit of the entire society.

 

Communicating the Standards: Communication in the simplest possible form (No legal complexities, jargons and arcane languages) was one of the most innovative features of Hammurabi’s code which is extremely relevant in current scenario also. The objective was to make it so sample as it could be understood from priests to ordinary citizens. He also put these rules on clay tablets and had them distributed throughout the kingdom.

 

Presumption of Innocence (Minimize Type 1 Error)- The Code of Hammurabi includes many harsh punishments, sometimes demanding the removal of the guilty party’s tongue, hands, breasts, eye or ear. But these codes are also considered as one of the earliest examples of an accused person being considered innocent until proven guilty

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We can look at two simple ideas of the modern organisation management

 

- The ESOP . WIih staggered vesting periods, it ensures longevity and contribution to the organization. Caders that have more influence on the firms performance and growth, may have more stake that motivates too.

 

- The Incentives/Variable Pay: Though part of CTC, most understand that the component of Individual and Company performance for the period. 

 

The others are mostly regulated by bodies like SEBI, ensuring that there is a control on exercising for those with deeper Inside knowledge of the company's performance.

 

 

 

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“If a man put out the eye of another man, his eye shall be put out” -Hammurabi

 

The Hammurabi code is the oldest written legal code by the king of Babylon, Hammurabi, who ruled over 42 years from 1792BC to 1750BC. The Hammurabi code is a collection of 282 rules to meet the justice for the standards of business interactions, fines and punishments. It was written over a black stone, finger shaped as shown below in figure (sourced from History.com)

image.png.fad7df539c08ac3f1bb6707ee9bdb08c.png

This code is earliest written law ever known (shown below in pic, sourced from history.com)

Hammurabi code was carved to enforce a moral obligation for fair play over the single 4 ton weighed black stone. On the top, there is carving of standing Hammurabi receiving the law from the seated Shamash, Babylonian god of justice. Rest of the stone is divided into columns with script carved over there.

image.png.1ff3a95dd967075b2d4b73c0f9625ee7.png

 

Hammurabi’s Code serves the earliest example of laws of retribution and sometimes known as “an eye for an eye.”

 

The Code includes many harsh punishments, as demanding the removal of the guilty person’s tongue, hands, eye or ear. This is also an earliest example of “an accused is innocent until proven guilty”.

 

The 282 rules are in the “if-then” form. For example, if a man steals an ox, then he has to pay back 30 times of its value. It outlines different standards of justice for the three classes of the society, the propertied class, middle class and the slaves.

 

A doctor’s fee for curing a severe wound would be 10 silver coins for a propertied man, five for a middle class man and two for a slave. Penalties for mal-practicing  the rules: a doctor who killed a propertied patient would have his hands cut off, while only financial punishment  was required if the victim was a slave.

 

The code also includes the earliest construction laws, designed to align the incentives of builder and occupants to ensure that builders create safe homes

 

If a builder makes a house for a man whose construction is not good, and then the same house collapses and causes the death of the owner, that builder shall be life penalized.

 

If the house collapses and the son of the owner is succumbed to death then the builder’s son would also be put to death.

 

If the house collapses and the slave of the owner is dead then builder shall give to the house owner slave of equal value.

 

If the property is destroyed, then the builder shall restore whatever damages.

Doctors get respect and promotions if they do their jobs fairly and also risk heavy penalties for medical mal-practicing. With the exception of experiments in which patients are fully informed of and consent to the risks, doctors don’t get a free pass for taking risks that cause harm to patients.

 

The same goes for military and security personnel. They get honor and promotions if they succeed and the severe disincentive of shame when they fail.

 

Hammurabi and his advisors were unconcerned with complex laws and legalese. Instead, they wanted the Code to produce results and to be understandable by everyone.

 

When we align incentives of everyone in both positive and negative ways, we create a system that takes care of itself. The little extra profit that builders can generate is same as the bonus system in some of today’s industries. It rewards those who take unwise risks, trick their customers, and harm other people for their own benefit. Hammurabi’s code of system had the opposite effect, it merged the interests of the person getting paid and the person paying. Rather than the builder being motivated to earn as much profit as possible and the homeowner being motivated to get a safe house, they both shared the latter goal.

 

The Code illustrates the efficacy of using self-preservation as an incentive. We feel safer in airplanes that are flown by a person and not by a machine because, in part, we believe that pilots want to protect their own lives along with ours.

This code can be formalized in today’s industries also to entrust the moral obligations and discipline.

 

Areas where it can fetch desired results

 

1-    HR policies- if a person is not following the SOP deliberately, then he shall be punished with suspension or termination.

2-    Banking sector- If someone misuse the details of a customer or leaks the data, then he shall be punished with termination. Or shall be handover to police.

3-    Manufacturing industry- if someone is not obeying his customer, then he shall not get any promotion or bonus.

4-    Service industry- if someone is not providing the quality service then he should be penalized with shame.

5-    Marketing industry- If any company making the false promises and marketing the fake benefits of the product they are selling, then the company shall be shut down.

6-    Education sector- If any school or college is charging excessive fees (unfair fees structure) then the school or college shall be barred.

7-    Sports- If a sports person found guilty of doping or using unfair means to win the game. Then he shall be banned from sports for lifetime.

8-    Sales and marketing- If a team leader is promoting the unfair practices then he shall be terminated.

9-    Medical industry- if a doctor is mal-practicing, then his license shall be cancelled.

10- Judiciary- if an advocate is favoring serving the wrong facts then his license shall be cancelled.

11- Administration- If an Officer is found involved in corruption then he shall be terminated and put in jail.

12- Food supply chain- If fruits and vegetable producer is found to use chemicals hazardous to human health. Then he shall be punished with life imprisonment.

These are the few areas where implementation of such code is required to create a moral obligation to build trust between people, employees of an organization, and strengthen the customer supplier relationship.

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Hammurabi Code

Hammurabi codes complied 282 laws that categorizes three signification concepts.

-          Accountability

-          Incentives

-          Manage Risk and Communication Principles

 

Accountability: - Hammurabi put more focus on value of having “Skin in the Game”. When he mentioned skin in the game means existentially accountability of involved parties. And this help parties to give more focus on result and impartiality.

Innovative way of someone accountable:-  

-          Bankers who approves loan will be penalized if the borrower becomes defaulter with same values which left to pay by borrower.

-          Warranty of product replacement under limited period – if the product got faulty within defined ageing then the supplier has to repair/replace it.

Incentives: - Hammurabi rules are the first attempt to align incentives in history. Their objective was very clear to give incentive to quality product and no incentive to poor quality. Product has to be made with best quality with predicting the worst conditions. (ie. Bad weather, earthquake, Financial situations)

Innovative way of Incentive:-  

-          Incentive could be only paid once the borrower pays minimum 12 installation of his loan. And also it could be tenure based.

-          Incentive could be based on the criticality of Job as well, like Security personnel’s working in completely different/severe condition could be paid better than other security personnel’s working in normal weather conditions. Comparison could be done between Security personnel’s working in Laddak vs Punjab boarder

 

Risk Management: - Hammurabi rules put more stress of covering risk of risk, meaning put extensive focus on Safety measures. They focus on the customer awareness and customer learning. This awareness and knowledge help to minimize risk.

Innovative way of Risk Management:-  

-          Seller has to organize an awareness program with buyers and make aware with all kind risk or safety measures. This makes buyer having good awareness about product and risk with product.

 

Communication principles: - Hammurabi focused on simple communication, he believes that communication has to so simple that from Priest to a common citizen should understand clearly. His focus to make it simple by avoiding lawful complexity and difficult languages.

Innovative way of Communication Principles:-  

-          To make communication standard use Visual effect this helps to make better understanding.

-          Communication has to be more picture and it helps to avoid statements/languages barriers.

 

 

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Hammurabi, the ruler of Babylon, is best known for the development of a collection of laws known as the Code of Hammurabi, which was used to regulate Sumerian society. He collected 282 case laws e.g. prices, tariffs, trade, commerce, marriage and many more including the penalties for the offenders according to the status and situation of the offender and displaying at 12 huge monolithic stone carvings. These laws are to be considered to be the first written legal decisions by the historians.

 

Out of 282 laws one of the laws suggests to have one's own skin in the game thus entrusting a moral obligation for fair play and it refers to the moral duty of citizens to obey the laws of their state. In cases of peace time or in war like situation a citizen should be faithful towards his land and king on willingly.

 

 The ways of implementing such moral obligation in an organization:

1.      Code of ethics should public to the employees

2.      Try to conduct more and transparent dialogue with stakeholders

3.      Employees should get the statement of commitments from the management.

4.     Assignment of persons or committees to ensure that these ethics or moral obligation are complying with the system

5.       Look that employees are adequately performing at the organizational system

6.      There should be regular reviews

7.       There should be continuous improvement at the organizational system

 

Mechanisms for implementation of such moral obligation are as follows:

1. Publish Code of conduct;

2. Provide training initiatives,

3. Create interest for HRM practices;

4. Leadership modeling,

5. Ethics committees, etc.

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Hammurabi was sixth king of Babylonia, he was the first person who formulated history’s first code of conduct. He compiled 282 laws which explains about commercial interactions , set fines and punishments to meet the requirements of justice, this code was carved onto a massive finger shaped black stone pillar.

These laws categorizes into following important concepts which is important to implement for an organisation in Today’s era also,

 

Maintain accountability
Align incentives 
Manage risk
Communicate the standards.
 
Maintain Accountability:  As per Hammurabi’s law number 232,” if a builder built a house with low grade material which resulted in death of owner because of collapsed of house then builder will be put to death”. Due to this harsh consequences of the law builder built house with quality material and put attention to its detail.

 So learning from this law is that for any agreement both parties involvement (real skin in game) with agreed terms and condition is must to get desired outcome and fairness.

In today’s era SLA(Service level agreement), sign on contract by both parties,  are innovative way to maintain accountability , where both parties are equal responsible to achieve target with terms and condition.

 
Align incentives: In this category of code, Hammurabi attempts to align incentives, which discouraged contractors from building structures with the minimum quality of materials and standards. There was simply no incentive to justify cutting corners by giving risk of collapse. Rather, contractors would be incented to build in a margin of safety to make the structure sturdy against not only predictable conditions such as high winds but random events such as earthquakes.

In today’s scenario TCO (Total cost ownership) and end to end contract are innovative way to implement this in an organization.

 

Managing Risk :This code focuses on how to manage risk of risk. This code encouraged vendors to build in wide margins of safety for the benefit of the parties and the community. The Code regulated “buyer beware” nature of many asymmetric transactions.

   In today’s scenario many financial systems do not incentivize the parties to create wide margins of safety.        Safety and Quality is inbuilt in base price of product.

 

Communicating the Standards:To communicate standard Hammurabi put the rules on clay tablets and distributed them throughout the kingdom it will be accessible to everyone easily.

In today’s scenarios innovative way to communicate standard are following it should be part of following

Induction Training at time of Joining for employee
Visual display at common place i.e. Office area, canteen, Training hall etc.
Mail communication.

Company magazine

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All answers have very interesting takes on how Hammurabi's Code is relevant in the organizations today. Kudos to all of you!

 

There are three winners for this question because of their depth in explaining the code and how organizations' will be able to implement it - Pradeepan Sekar, Senthilkumar G and Selva Mariappan Subramanian

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