Hrm Practice in India

1. Introduction Human resources are the main source of achieving competitive advantage; it can convert resources like money, machine, material and methods in output like product and service. (Tiwari & Saxena, 2012). The opponent can imitate other resources like technology and investment but the human resource are exclusive. In order to develop a sound HRM system, the business should have effective Human Resource Management practices.

HRM practices refer to organizational activities directed at managing the pool of human resources and ensuring that the resources are mployed towards the fulfillment of organizational goals (Schuler & Jackson, 1987). India is one of the largest populated countries of this world. From past two decades, they have changed their economy at a vast progressive speed. To do so they have used this vast population as their prime assets. After deregulation of the government policies at early 90s, many overseas countries were attracted to invest in India due to the accessibility of the labor at a cheap rate.

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This was helpful for India to train up their people. Training at different level was designed to train people at diverse aspects. This practice leads India towards great success in the terms of transforming the labor force. After huge foreign investment towards India, the local firms are bound to practice proper HR practice to remain competitive in the market. Indian companies have realized that in today’s competitive business environment, people with high quality can make all the distinction.

Human resource management now days become a key performer in strategic planning, it has come a long way from conventional HR operations like managing the recruitment process, handling employees’ appraisals. For this reason Infosys CFO T. V. MoahndasPai and Marico CFO MilindSarwatewas were moved to head the human resources (HR) function in their respective companies; Rajiv Dube, CEO of Rallis, left his place to Join as HR chief at automobile major Mahindra & Mahindra. Demand of skilled performers are high, so companies are forced to shift focus recruiting high performing for competitive business environment.

India Inc. is encouraging ‘entrepreneurs’ or employees who have ideas that could potentially become a venture. Companies are vigorously promoting entrepreneurship practice by employees in the organization, for example PepsiCo, NIIT, and Adobe. People often build their knowledge by drawing on their prior knowledge and by trial and error culture. Human Resource Management has taken an important role in encouraging CSR initiatives at all levels. Wipro pounds CSR values amongst its labor force right at the starting of the introduction phase.

Business presentations and keeping employees updated through regular newsletters are the instruments used by HR to keep employees thrilled about the organization’s socially responsible initiatives. Over the last decade, India’s huge manpower has played an active role in its economic success story. Indian organization now a days are adopting on the Job training, production with zero defect and also implementing Total quality instrument in seminal how the firm will react to the competitive surroundings, not the firm.

The success of Indian companies is not based on higher technology, raw materials or patents, but fundamentally upon human expertise. 2. Profile of India According to (Indian Govt, 2012) India is one of the largest countries in the world with the area of 32; 87,263 sq. km. mainly climate of India is tropical monsoonal, although large part of India lies within the trophies it is influenced by the monsoons (Facts bout India, 2012). India has population of India over 1. 21 billion (Wikipedia, 2012). ClA World Fact book report population growth rate of India is 1. 44% estimated in 2011 (CIA, 2012). According CIA fact book real GDP in terms of PPP was $4. 463 trillion growth rate was 7. 8% estimated in 2011 (CIA, 2012). GDP per capita was $1389 in terms of nominal& in terms of PPP it was $3694 (Wikipedia, 2012). lnflation rate of India is estimated 7. 55% on May 2012. Total labor force of India 2011 estimated 487. 6 million and total unemployment rate of India in 2011 was 9. 8% estimated in 2011. CIA report in 2011 India earns $298. 2 billion from exports expend $451 billion for imports.

They export petroleum products, precious stones, machinery, iron and steel, chemicals, vehicles, apparel & import crude oil, precious stones, machinery, fertilizer, iron and steel, chemicals with total value of in 2011. In 2011 India attracted $225 billion FDI in India which ranked 20th among all countries of the world. India FDI abroad was $114. 2 billion on 2011 which ranked 24th among all countries. India achieved good strengths in telecommunication, information technology and other omentous areas such as auto components, chemicals, apparels, pharmaceuticals, and Jewelries.

Moreover FDI policies of India are very attractive to the foreign investors. For these steps we see that India’s FDI growth increased by almost 25% in 2008-2009 fiscal years. In 2006 the World Trade Statistics of the WTO recognized that India was accounts for 1. 5% of world trade (Wikipedia, 2012). Total Land sq. km, Total population 1. 21 Population increase % 1 . 344% Climate Subtropical monsoon. GDP (Growth) & per capita GDP 6. 5% & $1389 nominal, in terms of PP $3694 Inflation rate 7. 55% Total export and Import Export: $298. 2 billion (2011 est. Core export & import items (last 5 years) apparel Import: crude oil, precious stones, machinery, fertilizer, iron and steel, chemicals precious stones, machinery, petroleum products, vehicles iron and steel, chemicals Total employees & Unemployment rate 487. 6 million & 9. 8% Foreign investment At home $225 billion At abroad:$114. 2 billion Foreign investment (last 5 years) Telecommunication, information technology, auto components, chemicals, apparels, pharmaceuticals, and Jewelries are main sectors. WTO recognized that India was accounts for 1. 5% of world trade. 3.

Factor affective HRM practices in India a. National culture and industrialization l. External factor A. Labor union The age of Indian labor union is more than 150 years. VS Rama Rou stated that the aspect of labor union in India has been accelerated with the creation of All India Trade Union congress (AITUC) in 1920. There is different political and nonpolitical labor union in India that may cross well over hundred. These labor unions fight for the right of the working class in India who might have been exploited more than the present days if these unions were not present.

Developing in the field of employee elation is well practiced in the western countries, but there is a scarcity of using it in the developing countries like India (Cappelli, 1995). There was an 11 days strike by the Aircraft Technicians Association with regards to the delayed payment of the salaries by Air India. Another big step by the labor union to regain the worker’s right is discussed by Jason Overdorf in his article. He said that many big Indian companies along with some multinationals like Maruti-Suzuki, Nokia and Voltas have faced some big strikes because of corrupt labor policies followed by the companies.

In this article it is said that these big companies are trying to exploit the worker in whatever policy they can and some paying them less than the average national income. The black hole of hiring contractual worker has being exploited by not giving them proper benefit as they intend to get. According to India Knowledge there are many layoffs and closures going on in Indian organization but they are not reported because of too many small businesses are popping up and workers are accepting this exploitation quietly because of extremely competitive work environment.

There were uge financial losses because of labor strikes and unrest. On November 5, 2009 there was a 45 days strike called by the workers of Rico Automotive. It was supported by different other workers in other areas with the calling of sympathy strike. Such shutdown that lasts more than a month caused huge breakdown in profit-loss reported by different major Medias all over the country. B. Labor Laws India is one of the world’s largest sources of labor. This huge labor forces require caring for proper growth and development so that they can contribute towards the economy of the country.

But according to Riteshmaity. om in its article “Does labor laws of India needs a change” Indian labor law is disorganized and old. The Industrial Disputes Act, 1947, which has been antiquated, is still considered in the court in terms of legal battles. A big glitch Exists in India’s labor law. One of the laws is if any organization has more than hundred employees, then it has to take government permission to lay off employees. The writer said in this article that this law has not been followed properly by some organization while it hampers the growth of different manufacturing industries.

Industrialists simply don’t want to surrender heir lay off rights and so they don’t go for an expansion when there is a chance. For this law India has reprimanded itself from huge industrial growth. Especially in garments industry where entrepreneurs want to hire employees in a temporary basis when demand is rising but want to lay them off after the demand shock. Although this kind of law is actually intended to protect the employees so that the companies cannot fire employees at their sweet will, it should have a provision for the companies to enter into different types of contract with the employees.

There are still huge percentage of able group who couldn’t or haven’t Joined the manufacturing industries because of different difficulties such as discrimination, low wage rate, exploitation of overtime etc. In his article he referred that although strict, Indian labor law is exploited in many small cases which remain idle in the eyes of the Government. In recent times serious considerations in given by the Indian Government to develop human resources in India (Sparrow and Budhwar, 1997). C.

Socio Political issues: The socio economic condition of India is not good news for most of the part of the provinces except some. There are not many good Jobs available for the blue collar workers. Most of the blue collars are underpaid while their counterpart management gets a good sum of money. In the blog it is said that if commodity prices keeps on rising while people are getting lower pay, Indian people will engage in revolt causing an unhealthy political situation in the country. There are also many political influences in getting into some prestigious Job.

According to the Times of people are paying good sum of money to the HR people or the consultancy firms tied up with companies for Job related recruitment to get a good Job. Some MNCs are also in the list of this; so the corruption level has gone at a high level for the country. These unethical activities heavily affect the companies’ performance afterwards. Indian is a fastest growing market today and hosting many major foreign companies of the world, so they must develop their socio political situation as soon as possible .

D. Technological issue Corporate India has changed a lot since the introduction of internet and mobile technologies. The most of the big organizations like Tata, Reliance etc. use technology to manage the human resource of the organization more effectively and efficiently he performance of every employee in different tracks. Technology has helped so many firms to renovate their HR strategies without having to construct them from the scratch. Now even the attendance record can be done automatically through technology.

HRIS software has been useful to Judge an employee’s performance while minimizing any kind of bias. Through proper server integration the data can be shared in different department so that now individual employee can check out their own performance on a daily basis- indicated in the article “Identifying trends in technology Is crucial for HR”. Through technology business people now can link with each other very easily. There is different social networking service for business people like LinkedIn. E. Business environment India has world’s second largest population and it has a big land.

Because of these reasons there are huge possibilities and business opportunities in India. Unfortunately because of India’s Jingoism has cut out many big opportunities. Still they have proven a big rise by themselves and this strategy worked like a magic for India. Now India is one of the most powerful forces in the world. As business is xpanding in India so does the workforce. Many companies are trying to attain multinational standards. So they have adopted many western techniques of managing human resources. Now-a-days many big Indian companies include Assessment Centre.

In a graduate program selection process is rigorous so does the training process after selection. II. Internal factor a. Country management style In the country management style context, Valverdeet et al. (2006) explained that HRM is not Just only sole responsibility of Hr department but also there are other agents like line managers and general employees. But earlier that India is an extremely hierarchical society (arguably the most hierarchical in the world) and this, clearly, has a blow on Indian management style.

It is vital that the manager in India act like a boss and he is the boss. The position of manager needs a certain amount of role- playing from the boss and a certain amount of admiring behavior from his dominate the organization by the historical conventions of the caste system. First, unlike other countries, Indian companies are largely led by family promoters. Indian entrepreneur stay in the business till the end as like the US organization. In India, it is also a norm for the promoters’ children to inherit the business, which is less common in the US or other western countries.

The legacy issues are much stronger here than in any other country. India has diversities on a continent and unities of a civilization . But at the same time, Indian promoters also recognize the need for professional managers. India, therefore, has a situation of both promoters and professional managers running a business and working seamlessly with each other. This is clearly visible in family-promoted Indian conglomerates such as the Tata, Birla, Mittal, etc. It’s not that Indian managers are inherently more creative than their counterparts elsewhere.

But they work in a complex environment which has an influence of red tape. They, therefore, have to be nimble footed to be able to move with a constantly- changing and evolving policy framework, low quality of infrastructure that reduces smooth flow of physical and financial capital, corruption, bureaucratic procedures that increase cost. b. Hidden factor of management style There are some hidden factors in Indian country management style. According to the hat cultural block was the biggest impediment faced by the country against globalization.

India is a country of man people and many races. There is pragmatism, flexibility, ability to work in a difficult operating environment, knowledge of English and democratic values, ability to work in mixed environments with promoters, etc. These are the important facets in The Indian Way of management. In India the notion of time is different in India. This is a real cultural shock for many; it is true even for higher Indian management, and the importance of “focusing on people issues over process issues”. In the west, company affairs are never mixed with personal issues.

On the other hand, in India, employee’s personal issues are considered as very important. Another important characteristic of Indians is they complete their task at the eleventh hour and rush the work. The Indian management style is still being explored and developed. We havent yet identified a typical style of Indian management. For example, the Japanese style of management had Total Quality Management, or Just in Time Management, etc. In India we dont really have any such commonalities across geographies or across different companies. B.

Government business relationship with Business sector Misquitta described that the first Prime Minister of India, Jawaharlal Nehru, the innermost fgure in Independent India, believed in Democratic Socialism where downsizing of the private sectors were not allowed . He rhetorically admonished the private sector business but inwardly reveled in accommodating them because with the help of private sector India has achieved its independence. But as in the recent the benefit of the employees rule was first implemented by the house of Tata’s, while the government was way behind of Tata’s.

In the recent years, the Government has confidence in the private sector and so government provides to them the best of infrastructural amenities through the Public Sector enterprises. Moreover the brain drain form India to other country has stopped and due to the American recent political meltdown the reverse brain drain is in progress. India is a booming economy and has many opportunities to shine as a sun. Students of India are eager to Join many modern fields like management, media, engineering, biotechnology, advanced information technology; management studies culinary arts, hospitality.

There are a large number of students are coming but even they cannot fill up the challenging position in Indian industry and business landscape. According to Indian government always welcomes foreign direct Investment, form the year 2000 and on words is has increased dramatically, which has boomed Indian economy. 4. Existing HRM practices of India. a. Recruit and selection process India is a very large country and has so many firms. Recruit and selection process does vary from firms to firms and changes a lot. Hr practices of the local Indian firm differ a lot from the hr practices of a multinational firm.

That’s why a generic hr practice of overall Indian is discussed here. In India Resumes of the applicants are closely scrutinizes to identify successful work experiences, career stability and, most importantly, enrollment in relevant graduate classes, certification, etc. Such academic achievements are considered by the employer as benchmark of the potential applicant. The cultural dimension of future orientation can be linked with the emphasis on learning and education . In the Indian work environment, especially for middle and upper-level Jobs Employee referrals and succession planning are major.

Indian culture is very collectivist and manager hires and promotes employees whom they know. Loyalty and retention are the byproducts of these staffing practices. For entry-level positions employment testing is also common. Potential employees will be subject to meticulous math, analytical and communications tests to find out high- potential learners. The reliability of the hiring process can be increased by having such cognitive information. Cultural dimension of uncertainty avoidance is associated with these extensive testing.

In India, the sheer magnitude and size of online recruiting is influenced by Western tandard. About 10,000 entry-level positions annually on average by the large Indian companies recruit, so this huge numbers of resume is a staffing nightmare for testing authenticity and relevance. Indian Job advertisements often indicate educational qualifications and age requirements for potential Jobs. Indian companies are use branding in their recruitment process. The status-minded Indian employees like to work for organization that have a name and are well-recognized in work environment and society.

Therefore, newspaper advertisements often provide thorough company information. Subsequently, the employee is considered the “brand” and conduct During the hiring process Personal questions are often asked. Questions about family background, marital status, caste and will be asked during the interview or on an application form. The caste is very important for recruiting in India. There are about 3000 caste in India and each one is considered as a social unit . Employers regularly distinguish on the basis of caste, which in India is easily recognizable by the first and last names.

Recent educational certifications, degrees and certificates are verified or not are asked from applicants during the interview process. Personal questions like planning to start a family are also asked to the married female applicants. Typical new hire gives the highest education level of the typical new employee Extra selection test refers to the use of additional selection procedures beyond background reviews, skills tests and personal interviews,. Incentive-based variable pay refers to the presence of any incentive pay program other than standard merit pay.

Orientation period refers to the hours a new employee spends in training before beginning work. Employee Involvement refers to the percentage of employees nvolved in group problem-solving, quality circles, or other similar activity. Human Resources practices in India are almost traditional and it is imperative to remodel them to fit the changing needs, aspiration and behavior patterns of the skilled personnel. Lack of research and case studies are conducted on the career development framework. There is almost no career architecture in Indian business environment.

Besides the structured process also lacks to handle business in a way that is not people dependant. In India there is lack of expert and experienced HR manpower, most of them are ushed up a do not have such capabilities to cope up what they really need to do. b. Training and development process According to Indian organizations spend quite a bit of money on training is very valued in India because it is considered an extension of academic learning. This also relates the cultural dimension with the future orientation of the Job environment, which makes employees seek maximum form of learning to have steady marketable skills.

For Indian employees, training creates loyalty to the company. For entry-level employees, there is almost no connection as to what they do in their workplace with hat they taught in graduate school. Therefore organizations conduct entry-level training, which focuses on soft skills such as effective communications, team programs in India are longer in duration and more extensive. The training for entry level employees is about 12 months, depending on the size of the organization. 60 and 120 hours are the average annual corporate training hours.

The best organization in providing training is Infosys, with an annual training budget of about $145 million. The training duration of Entry-level Infosys employees spend about four weeks on initial training. Organizations often pair with both well-known local and international universities to provide a solid continuing education for their employees. Training is considered as a future orientation and these are given below, Education is tremendously valued, and training is a conservatory of it. Entry point training programs is about 3 t012 months of orientation.

All employees must conduct ongoing training programs. Development programs for promoting involve training. In Indian organizations In-house training centers are a common feature Learning principles of the employees start with general concepts and move toward exact equest Deductive learning method in training is known as “top-down approach”. c. Promotion practices in India Promotion is development of the employees in both their Job responsibilities and benefits. As globalization affects the whole world, Indian Job promotion has upgraded a lot since 1950.

For big companies like Tata or some MNCs the employees get regular appraisal. Although some biases and errors are present but it is present in all the organization. The Indian culture is a socialist culture and they prefer collectivism. So in this case Indian management tends to promote their close ones more likely. With a high power distance rating and high uncertainty avoidance rating, promotion in Indian companies depends largely on how you abide by your bosses even though they may be wrong. That means you Just cannot argue with them so freely like it is in European or western countries.

According to times of India it is not easy to appraise someone Sometimes giving promotion to someone is not that easy. There can be a lot of confrontation for a selection of an employee for performance. For example: some employees’ performance is so close and the skills and basic traits are also close that rating them relatively is hard. The Judgmental approach is used in performance evaluation. Still Judgments can vary widely from people to people. So there is always a question of fairness when it comes to performance evaluation. Dr. C. P.

Manohar in his Journal named “Promotion policies in Indian railway’ has noted that in some cases wrong people are entering in wrong position . That leads to inefficiency which the ultimate customer has to pay off. He has also identified that horizontal promotion is mostly seen in Departmental promotions and inter- departmental Job appraisals are generally vertical in nature. While writing this ournal the author has made a survey on which criteria the promotion should be made. He saw that most of the people have rated merit and seniority with the support of personal behavior and proper interaction.

In the Journal “Manager Support predicts turnover of professionals in India” the authors have noted that not always it has to be a major promotion to motivate the So managers should always remind the employees of their day to day achievements. Here Hl= Greater manager support results in the higher the level of intrinsic rewards. H2= Greater the experience of intrinsic rewards results in greater perceived career ccomplishment by an employee. H3=The greater the knowledge of manager, the greater the perceived career accomplishment by an employee.

H4= Positive perception about career progression results in lower turnover of employees. H5= Better managerial support lower turnover H6= Better managerial support increases employees’ personal commitment Generally for entry level position promotions are faster in India. People in India go for low salary in their first Job so they require higher raise during promotion. For blue color workers the scenario is not so comfortable. The blue color workers keep on orking overtime still without any see in pay raise. There is no promotion system in those sections.

Moreover the blue color workers work under a contract and during the contract there is generally no promotion system unless explicitly mentioned. The Indian Job society is turning to the contractual workers more and more as economy of the world sees a larger fall. As contractual workers are increasing the promotion practices are being blunt in some organizations, because contractual workers need not have to promote that much like a permanent workers. Still you will see a ompany’s quoting different performance appraisal system and managers have to eventually fill up the appraisal form regardless of employment type.

Big companies are practicing these appraisal and promotion system more often and they are using these as a tool to battle for efficiency. Indian companies now know that a promotion will boost up the employee morale thus making him more productive in the work. So they are trying to use it to their advantage. Sometimes it is seen that a rank is given to an employee rather than a raise in pay. That system works when the company has to cut the cost but still keep the employees motivated. Because when it is a question for cost cutting, it is not good news for the employees.

Employees get discouraged hearing the word of cost cutting. A promotion means more responsibility on the shoulder. So with a promotion there must be a training and development session to inform the employees about their new responsibilities and how they can perform it. There can be training session regarding the new Job of the employees after the promotion. Without these sessions the employees may be unclear about their new job and they may underperform. That will eventually undergrad the main focus of the promotion. Promotion in the mid-high level position is generally done internally in India.

It is because Indian organizations believe that their internal employees would be better fit for those positions and if they are given that rank they will perform much better and will become loyal to the company. So getting a mid-high level position new Job is not very easy in India unless you have some strong internal reference. But still some companies are practicing outsourcing the employees from outside to a higher rank. In India there are lots of Job hopping tendency in the people, because people see Job hopping as a mean toa promotion. It is true that Job

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