HRM Status in India

8/4/2019 HRM Status in India

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HRM Status In India


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Definition Of HRM

Human Resource Management is to "ensure that at alltimes the business is correctly staffed by the rightnumber of people with the skills relevant to the businessneeds"


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Functions of HR

MANAGERIAL

FUNCTIONSPlanning

Organising

Directing

Controlling

OPERATIVE FUNCTIONS

StaffingDevelopment

Compensation

Motivation

MaintenanceIntegration


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IN ABSENCE OF GOOD HRM, PEOPLEARE:-

under valued

under trained

under utilized

poorly motivated

perform well below their true capability


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HRM in India

The HRM practices in Indian Organizations are no doubtunique. The cultural impact on the hiring practices,compensation standards, benefits and statutory governance,performance linked rewards and payouts and the general day

to day management practices through in-step withinternational HRM practices have a flavor their own. HRMin India is not structurally well-researched and hence a lackof theoretical information to track and document itsprogress, unlike in the emerged countries like US, UK.

Research is yet at its infancy in India.


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Distinction B/W India HRM And GlobalHRM

The Indian culture is one that is deeply rooted in its societaland collectivistic values providing for a natural urge tocollaborate at the workplace, work in teams and groups andachievements.

The diversity that is seen in the Indian society w.r.t. diversereligions and states are reflected in the ability of the Indianand the Indian corporate to tolerate diversity of thinking &working together without inhibition.

Work culture wise, hard work, long working hours and needto earn money impact the HRM policies.


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Availability of a educated mass of different caliber ofknowledge and skill allow the country to undertake differentnature of work beginning with lower skilled activities such asBPOs & moving up the value curve to far more advancedactivities as KPOs

Compensation costs as still a competitive advantage for Indiamaking it a preferred business location the world over.


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SCOPE OF HR IN INDIA

One very important trend in the recent times has been thegrowth of human resource outsourcing. HR outsourcing isthe outsourcing of peripheral but necessary administrativetasks such as payroll, benefits, education/training, recruiting

personnel, administration, to realize economies of scale andachieve standardization of services.


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Rapidly changing market dynamics and global competitivepressures have caused organizations to spend more timefocusing on their core business. Organizations are fastrealizing that they can't be all things to all people. Socompanies now, be it a software company, a service provideror a manufacturing firm, decide what they are good at andoutsource everything else, i.e., focus on their core

competency, and let someone else do the rest in a moreefficient and cost-effective manner


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As a result, human resources outsourcing is becomingincreasingly prevalent. The number of companiesoutsourcing HR activities continues to rise, and the scopeof outsourced HR activities continues to expand. HR

outsourcing can happen in HR functions, like payrolladministration (producing checks, handling taxes, dealingwith sick-time and vacations), employee benefits (Health,Medical, Life insurance, Cafeteria, etc), human resource

management (hiring and firing, background interviews,exit interviews and wage reviews), risk management, etc.Outsourcing has become a common response to managepeople and technology resources strategically, enhance

services, and manage costs more effectively.


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Looking at India

Background Information

History and Societal Background

Dealing with Bureaucracy

Unfamiliarity and Cultural DistanceCulture Dimensions and Profile

Staffing

Recruitment and Selection of Host Country Nationals (HCN)

Compensation

Training and Development

Implications for Multinationals


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Background Information

Population of 973.5 million

Fifth largest country

Post independence Import-substitution policy

Low cost of Indian labor/ low level of productivity

Competitive with technically qualified, softwareprofessionals.


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History and Societal Background

British colony for 100 years.

Great national leader: Mahatma Gandhi.

Gandhi introduced the concept of non-violence protest.

The Indian social system is dominated by a caste system.

Four specific castes; Brahmins, Khastriyas, Vaishyas,Shudras.

Created distinct labor categories.

Associated status differences


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Dealing with Bureaucracy

Ninth most corrupt country in the world.

Pervasive corruption linked to excessive control andunfulfilled demand

Red tape

Widespread tax evasion

Possible Solution:

Establish international joint ventures (IJV) with a partnerwho knows the business and the bureaucracy, one with theright connections.


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Unfamiliarity And CulturalDifferences

I.J. Sharma in The Culture Context of Indian Managers,states:

An average Indian manager represents a plausible picture of theaverage Indians resistance for change, his willingness to

delegate but unwillingness to accept authority, his fear of takingan independent decision, his possessive attitude towards hisinferiors and his abject surrender to his superiors, his strictobservance of rituals and his disregard of them in practice, hispreaching of high morals against personal immorality, and his

near-desperate efforts at maintaining the status quo whiletalking of change.


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Definition of Cultural Dimensions

Power distance: The degree to which organizations andsocieties accept power.

Institutional collectivism: The degree to which

organizational and institutional practices encouragecollective action.

In-group collectivism: The degree to which individualsin societies reflect collectivist behavior.

Uncertainty avoidance: The degree to whichorganizations and societies avoid uncertainty by relyingon practices and procedures.

Performance orientation: The degree to which uppermanagement in organizations and leaders in societies


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Cultural Profile

q Power distance:

q India: 5.47 (rank 16).

q Morocco : 5.80 (highest score).

q Institutional collectivism:

q India : 4.38 (rank 25).

q Sweden: 5.22 (highest score).

q In-group collectivism:


q Philippines: 6.36 (highest score).

q Uncertainty avoidance:


q Switzerland: 5.37 (highest score


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Staffing

In complex cultural context like India, it may be moreadvantageous to use local managers.

Indian manager knows more than an expatriate managercould learn in years on the job;

Avoids extra costs associated with relocating expatriates;

Reluctance of many Western managers to live in India;

Ensures continuity of management as HCNs are likely to staylonger in the position; and

Creates higher morale among HCNs due to a perceived careerpath.


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Recruitment and Selection of HCNs

Careful selection of workforce is important

Using an IJV can assist in identifying a suitable workforce

IJV may use existing human resources of the local partner

The Industrial Dispute Act

Dismissals and layoffs are difficult


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Compensation

Foreign multinationals find it difficult to retain high-qualitylocal staff because of the economic liberalization in the early1990s.

A shortage of skilled people is due to a rapid rise in foreignand local investments.

Preconditions to retain experienced staff includes continuouspay increases and commitment to improve workingconditions.

Pressure on minimum wage level.


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Training and Development

Expatriate training in negotiation and conflict resolutionskills is advocated to enable them to cope with, and resolve,the unexpected issues inherent in the Indian context and IJVsituation.

Multinational may provide extensive training programs forlocal staff to address low labor productivity.

Introduction of new production equipment and concepts,such as quality management, require additional training.


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Implications for Multinationals

Suggestions:

Include local staff and practices in building a performance-based work culture in Indian operations.

Choose a skill-based approach to improve labor productivityand better performance.

Hire quality HCNs rather than employing expatriates.

Include staff training and development.

HRM Status in India

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