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Unit 02 - HRM in India - MBA Notes
Master's in Business Administration (MBA001)
Manipal University Jaipur
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Unit 2 HRM in India
Structure: 2 Introduction Objectives 2 HRM in India 2 Changing Role of Human Resource in India 2 Globalisation and Its Impact on HR 2 Summary 2 Glossary 2 Terminal Questions 2 Answers 2 Case Study
2 Introduction
In the previous unit we studied about the concepts and scope of HRM. We also learnt the evolution of the concept of HRM. We have learnt that workforce has evolved from being considered as a commodity to being the most valuable resource in any organisation.
Although ‘Human Resources’ is comparatively a recent management term we can trace the relevance of it to the vedas. In The Bhagavad Gita, Lord Krishna not only makes Arjuna spiritually enlightened, but also teaches him the art of self-management, anger management, stress management, conflict management, transformational leadership, motivation, goal setting and many other aspects which are now essential parts of any HRM curriculum.
After Indian independence, the government resorted to protectionism in order to nurture the country’s fledgling industries. There were very limited job opportunities and having a government job was regarded with high esteem. There was a high degree of loyalty, and therefore, people used to work and retire from the same job. This situation drastically changed after the government liberalized the economy in 1991 and allowed foreign competition. Domestic organizations were forced to raise the bar by improving their products and services to compete with global organizations. More and more of private multinational organisations started setting up
companies in India bringing along with them global HR practices. Also apart from being a global hub of outsourcing, Indian companies are expanding all over the world through mergers and acquisitions.
The critical HR issues today in India are performance management, employee motivation and retention, career and succession planning. In this unit we shall look into the changing role of HR in India and how globalisation has impacted the changes in HR practises.
Objectives: After studying this unit, you should be able to: analyse the concepts of HRM in India describe the changing role of HR in India explain the impact of globalisation and its impact on Indian business
2 HRM in India
The viewpoint of HRM in India has shifted in the last two decades. The economic liberalisation of 1991 has created a massive change in the HRM perspective in India. It not only led to the creation of a very competitive market situation but also in turn forced Indian organisations to think and implement innovative measures to attract and retaining employees.
The Indian workforce is now being globally acknowledged as a dedicated, intelligent and a well-informed workforce. This is the result of the strong foundation provided by the Indian education system at the primary, secondary, technical and at professional levels. It is an undisputed fact that the Indian Institutes of Technology, the National Institutes of Technology and the famed India Institutes of Management are among the world-class institutions to name a few. Quality education and research are encouraged on these campuses and across the country, which mould and contribute to the practices in Indian organisations.
There are arguments that HRM practices in India are a simple extension of the HR practices from the established western organisations and the developed countries. They argue that much of the changes in the employment perspectives in India have changed only after the economic liberalisation. However, there is an equally strong cultural impact on the hiring practices, compensation standards, benefits and statutory benefits,
Indian resource base for hiring and building talent, contributing to the overall gain of the country.
HRM in India however, is not structurally well-researched and hence there is a lack of theoretical information to track and document its progress, unlike the emerged countries, such as the USA and the UK, where the research networks are mature and well established. Research is yet at its infancy in India and there is a lot of dependence on the developed countries in emulating best practices in the way people are hired and managed. Today the organisations of Indian origin have their unique HR strategies that work best for them. Work more and earn more is a common and accepted philosophy at Indian workplaces. Work is respected, revered and almost worshipped in Indian organisations. Benefits are basic yet equitable and adequate. There is a high focus on cash in hand as opposed to benefits and perks.
Self Assessment Questions
State whether the following statements are true or false. 1. HRM in India is structurally well-researched. 2. The tolerance for ambiguity and uncertainty is high in the Indian workforce. 3. Tolerance for diversity is high among Indians and therefore not much HR efforts are needed to practice tolerance towards others points of view. 4. Indian employees require cultural events and activities in the organisation. 5. There is a natural urge for Indian employees to collaborate at the workplace, work in teams and groups with ease.
Activity 1: Prepare a report on how the Indian culture has influenced the HR practices in India. Refer: 1. rphrm.curtin.edu/2007/issue2/india.html 2. f3.htwberlin/Professoren/Arora/discussion_paper/ Foreign_Multinationals_in_India-Dayanand_Arora
2 Changing Role of Human Resource in India
In the previous section, we discussed HRM in India. Let us now discuss about the changing role of HR in India.
The role of HR has undergone several changes in India. From being considered as compliance checking body, human resource managers are now being considered as strategic partners to the organisation. They are involved in all the crucial business decisions made by the company. Their role is not limited to designing the organisational structure to meet the changing market demands, attracting high performing talent, evaluating performance, retaining top talent and also ensuring that employees are motivated and engaged.
The roles that HR in India has to take up have increased. They are the change agents, counselors, motivators, trainers and also the spokeman of the employees.
HRM challenges One of the challenges HR managers face is the issue of upgrading the skill set of employees through training and development. Indian companies are recognising their responsibilities to enhance the employee’s opportunity to develop skills and abilities for full performance within the position and for career advancement.
The fast pace in which the global business environment is changing has kept HR managers in India also on toes. Every little change in the business environment bring along with it subsequent changes in the workforce. This has become a challenge for the HR personnel to handle several complex issues such as attracting the right talent who meets international work standards, designing work teams, creating faster communication patterns, creating innovative employee recognition strategies and devising measures to ensure that the top quality talent is retained.
Managing changes in technology is also one of the challenges that an HR of any organisation in India faces. Technology is changing rapidly, and every day we are witnessing innovative technological advancements. All organisations want to be technologically oriented. They want their employees to aware of the changes and quickly adapt to them. This require the HR personnel to attract the right talent with the required knowledge and
leading role in encouraging Corporate Social Responsibility (CSR) activities at all levels. Companies, such as Wipro, inculcate CSR values amongst its workforce right at the beginning during the induction process. Corporate presentations and keeping employees updated through regular newsletters are the instruments used by HR to keep employees energised about the organisation’s socially responsible initiatives.
Over the last decade, India's vast manpower has played an instrumental role in its economic success story. Indeed, the success of Indian companies is not based on superior access to raw materials or technology or patents, but fundamentally upon human skills. The synergy between the strategic planning and innovative HRM practices will be pivotal as Indian Inc. embarks itself on a global journey.
Self Assessment Questions
- The challenges HR managers face is the issue of upgrading the skill set of employees through ________ in the face of high attrition.
- Most of Indian companies are committed to provide ___________ opportunities for all.
- Human Resource Management has taken a leading role in encouraging ________ activities at all levels.
- Organisations are changing their HR policies to retain their _________.
2 Globalisation and Its Impact on HR
In the previous section, we discussed the changing role of HR in India. Let us now discuss about globalisation and its impact on HR.
The tendency of firms is to extend their sales and/or manufacturing to new markets abroad, and for business everywhere. The one element that is unique about every nation or company is its workforce.
A workforce that is knowledgeable and skilled at doing complex things keeps a company competitive and attracts foreign investment. Well-trained workers attract global corporations, which invest and provide employment opportunities to the workers, which in turn generate additional training and experience.
Technology The most important use of technology in HRM is in an organisation’s Human Resource Information system.
Trends in the nature of work Technological and globalisation trends are in turn producing changes in the nature of jobs and work. Following are a few trends in the nature of work: Information technology and personal computers have allowed companies to relocate operations to locations with lower wages. Increased use of part time and temporary workers.
A service society An enormous shift from manufacturing jobs to service jobs. For service jobs new types of knowledge workers and new HRM method to manage them.
Knowledge work and human capital The distinguishing characteristics of companies today and tomorrow is the growing emphasis on human capital–the knowledge, education, training skills and expertise of a firm's workers. This growing emphasis on education and human capital reflects several social and economic factors. Now companies are relying more on employee’s creativity and skills.
Other trends affecting HRM Equal employment opportunity laws that bar discrimination on the basis of race, age, disability, religion, sex or national origin, have been passed. Virtually all managers are thus now legally bound to uncover and correct instances of discrimination. Mandated health benefits, occupational safety and health requirements. Union-management relations. HR managers have to deal with all these legal constraints.
Workforce diversity Diversity in the field of HRM can be defined as the situation that arises when employees differ from each other in terms of age, gender, ethnicity, education, etc.
- Globalisation of markets.
- New business strategies that require more team work.
- Mergers and alliances that require different corporate cultures to work together.
- The changing labour market.
Self Assessment Questions
- The most important use of technology in HRM is an organisation’s __________.
- Technological and ___________ trends are in turn producing changes in the nature of jobs and work.
- ___________ means establishing a heterogeneous workforce to perform to its potential in an equitable work environment where no member or group of members has an advantage or a disadvantage.
- An enormous shift from manufacturing jobs to _____ is observed in workforce diversity.
2 Summary
Let us recapitulate the important concepts discussed in this unit:
The viewpoint to Human Resource Management in India has shifted in last two decades. Economic liberalisation in 1991 created a hyper- competitive environment.
As international firms entered the Indian market bringing with them innovative and severe competitiveness, Indian companies were forced to adopt and implement innovative changes in their HR practices.
Increasing demand for skilled performers affected the companies to shift focus on attracting and retaining high-performing employees in a competitive marketplace.
Activity 2: Identify three practices in Indian companies that you know of that are specific to the Indian culture. Think of festivals and how they are celebrated in companies.
One of the challenges HR managers face is the issue of upgrading the skill set of employees through training and development,
Most of the Indian companies are committed to provide equal employment opportunities for all.
A workforce that is knowledgeable and skilled at performing complex jobs keeps a company competitive and attracts foreign investment.
Well-trained workers attract global corporations, which invest and provide employment opportunities, which in turn, generate additional training and experience.
2 Glossary
Corporate social responsibility – It is a set of actions of a company that changes business operations to improve, maintain, or mitigate a company’s impact on society and the environment.
Globalisation – The integration of the world’s economies brought about by the rapid improvements in communication and transportation. Globalisation involves the spread of economic, social and cultural ideas across the world, and growing uniformity between different places that result from this spread.
Knowledge Process Outsourcing – Knowledge process outsourcing (KPO) is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost.
Workforce diversity – Differences among recruits and employees in characteristics, such as gender, race, age, religion, cultural background, physical ability, and sexual orientation.
2 Terminal Questions
- Discuss the concept of HRM in India.
- Discuss the impact of changing roles of human resource in India.
- Discuss globalisation and its impact on HR.
2 Case Study
Indian Tech Tries to Retain Top Workers By Jessica MehroinIrani At a time when most IT companies are reducing employee numbers to cut costs, tech majors such as Wipro, TCS and Infosys are re-channelising their manpower. Sabbaticals are more common and people on the bench are being asked to undergo longer and more rigorous training programmes.
Wipro has asked some of its non-billable and skilled employees to move to subsidiary Wipro Infotech on the same pay package as earlier; but they will continue to be on the payrolls of Wipro Technologies.
"These are not under performers, but talented people we don't want to lose. The move to Infotech is currently for a year, and this will give them a chance to be productive" said Pratik Kumar, Wipro Executive Vice President of human resources. This will also help the company in sustaining high utilisation rates.
The other option given to employees, who have been on the bench for over six months, is a special programme which allows them to come to work for 10 days a month, at half their salary. "This allows them to take up certification programmes, work on innovation projects and help in creating question banks for domain specific internal tests" said Kumar. "Once we see an opening for them on a project, we will transfer them immediately."
TCS has also put its benched employees on high-end training programmes in areas such as enterprise resource planning, business intelligence and analytics. "We are building a larger skill set as we would like to be ready when the demand picks up," said a TCS spokesperson. The IT Company has also invited its employees to write research papers on technology that can be used by the company.
Reducing employee numbers for saving costs is a short-term solution, said Nandita Gurjar, head of global HR at Infosys. "When demand picks up, we'll be hiring skill pools at a higher cost; there will also be the cost of extra training. We weed out non-performers, but retain talent even if they are not being utilised currently."
While Infosys has said that 50 employees, at any given point of time, can take a year off and work for an NGO at half their salaries, its peer Wipro has
introduced project rejuvenate where employees, across all levels, can take a year-long sabbatical and pursue their hobbies.
This is not restricted to those on the bench, but also for those working on projects. Even though these people are asked to take a pay cut, it does not matter.
"As long as you get to keep your job and do fun things to de-stress, a pay cut doesn't matter," said a Wipro employee.
Discussion Questions:
- What all strategies are taken by Indian IT companies to retain their talented employees?
(Source: Business Week, Monday, March 30, 2009)
References:
- Fisher, S, and Shaw. (2010).Human Resources Management. New Delhi:Cengage publication.
- K Aswathappa. (2010). Human Resource Management. New Delhi: Tata McGraw Hill.
- Wayne, C. (1998). Managing Human Resource. Irwin/McGraw Hills.
- Durai, P.(2010). Human Resource Management, New Delhi: Pearson Publication.
E-Reference:
- chillibreeze/articles_various/HR-practices-in-Indian- Corporate-510 - (Retrieved on 20th March, 2012)
- managementparadise/forums/articles/6374-changing- role-hr-todays-world-sees-lending-hand-every-other-dept (Retrieved on 20th March, 2012)
- shrm/Research/Articles/Articles/Documents/ 09-0754%20India%20Talent%20Mindset%20Research%20Article- FNL (Retrieved on 20th March, 2012)
Unit 02 - HRM in India - MBA Notes
Course: Master's in Business Administration (MBA001)
University: Manipal University Jaipur
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