Human Resource Management

India is one of the few countries that can boost of an ancient,

deep rooted and diverse culture. There is an endless diversity in
India starting from its races, languages, religions, arts, and crafts
and customs and traditions. India has been variably described as
“the Mini World”, “the Epitome of the World”, and an “ethnological
museum”. The diversity in India is unique. From the very ancient
times India not only absorbed the foreign cultures into its
composite fold but it managed to spread the rich elements of its
own unique culture in different parts of the culture (Sayeed,
2009).

Introduction to Human Resources

Human resource management (HRM) is a key department in organizations which

handles and manage the day to day functioning of the personnel (Clark, 1993) and is
largely involved with the recruitment, selection, appraisals, compensations and
benefits and the human resource information systems (Rothwell, 2009) The
implication of the human resource concept is that the employees are resources of
the employer. Human capital in an organization is the economic characteristic of the
employee described in terms of their experience, training, intelligence, judgement
which adds to the economic value to the organization (Noe et al, 2004).

Human Resource Management (HRM) is the function within an organization that

focuses on recruitment of, management of, and providing direction for the people
who work in the organization. HRM is the organizational function that deals with the
issues related to people such as compensation, hiring, performance management,
organization development, employee motivation and training (about.com Guide,
online)

With the advent of technology and given the fast pace at which the companies are
going global, management policies are designed in accordance to the global markets
and the need to define human resource management internationally arises. There
are a lot of Multinational companies (MNC) that have opened their offices in India in
the last decade.

International human resource management (IHRM) is the process of procuring,

allocating, and effectively utilising human resources in a multinational corporation
(Fisher et al, 1996)

Imparting of new skills to the current working employees by working in sync with
them is taken care by the Human Resource Development (HRD) which is another
area of the HRM that helps in improving the quality in productivity and in the service
offerings as well. HRD mainly deals with the training and development programme; it
helps in understanding and providing with information for certain special duties and
also upgrades them with knowledge that helps in the long term benefits of the
organization. Training deals with the solutions to solve the immediate needs and is
usually used for short term needs while development programs are aimed for the
long term solutions designed to congregate the potential needs of the organization
(Bogardus,2004 p172).

Human resource activities vary from country to country based on their cultural,
social, economic factors. In this essay the author will be discussing the practices
followed with in the Multinational Companies in India.

Recruitment and Selection

The recruitment process deals with the purpose of searching and obtaining
applications from job seekers. After obtaining the applications, the candidates are
then put through the various stages of the recruitment cycle based on the type of
company/industry the process is being taken up for (Aswathappa, 2007).

The Indian business model lays emphasis on an efficient recruitment process, with a
personal and corporate network supporting a whole approach to identifying just the
right people and ensuring that they are in place to fulfil your requirements (Davies,
2004). The question now arises is that how do the companies reach out to the right
talent? There are few standard procedures that prevail in India for the companies to
reach out to the set target of talent. They are as follows:-

Advertising in newspapers, business and trade journals

Advertising through the recruitment agency

Accessing the data base

Sourcing of candidates from online job sites

Word of mouth or references from known sources (Gupta, 2004)

Once done with the advertising stage, the focus now lies on the selection process
where the candidates are put in through various stages of the process that are
Interviews, Group discussions, IQ tests, psychological tests etcetera. A strong
emphasis is given to the attitude of the person, along with different skills, education
qualifications. General test are conducted to evaluate the general ability, technical
competency, behavioural competence and aptitude (Budhwar, 2010).

The interview round is one of the most basic and conventional round no matter what
the selection process is. Group discussions help in identifying the candidate’s
communication, leadership and initiative qualities while the psychological and IQ test
are done to provide an indication of the personality traits and to check for the
competitive knowledge the candidates possess (Gupta, 2004).

Many of the MNCs’ in India has been successful in adapting the global recruitment
and selection process, compensation of the local employees, with some local
adjustments (Budhwar, 2010).

Training and Development

“Training is a planned process of modifying employee behaviour, attitude and skill

through learning in order to increase the profitability of goal achievement” (Gupta,
2005).Training is designed to help employees perform better in their current job while
development is the far more risky process of helping prepare candidates for new and
more challenging duties. The figure below shows a report on the development
programs of the Indian and American companies. Although both the countries used
high incidences of various development initiatives, the Indian group reported more
extensive use (Cappelli et al, 2010).

In order to excel in the market, companies need to ensure the need to train and
develop their skilled personnel for the better growth of their company. Training and
development programs help the new employees to socialize and mould themselves
in to the organizational culture to help perform their tasks better. With the fast
changing pace of technology employees have to keep abreast with latest skills to
maintain their performance. In order to move up the hierarchy ladder training is
required (Gupta, 2005).

A comparison of the Indian MNCs and affiliates of foreign MNCs in India by Matthew
and Jain’s investigation of the IT sector in India enables a comparison of the way
Indian and foreign multinational corporations affect an organization’s business
culture and the implementation of specific HR functions. They found no evidence of
difference between U.S, European and Indian companies in India in type of HR
practices in major areas of Training and Development (Lawler & Hundley, 2008).

Performance Management

Performance management can be described as a process which is designed to

improve organisational, team, and individual performance within an organisation. It is
a part of the Human resource management (HRM) where in the best of the
performances are extracted from individuals and/or teams working together, which
helps in the organisation as a whole (Dransfield, 2000).

According to Neely et al (1998), Performance management is a cyclical process

aimed at improving performance like achieving the business objectives. Performance
management deals with the measuring of the performance of employees which help
in maximising the performance of employees who perform and to check
underperformers and weed them out to sustain a healthy organisational system.

Performance appraisals (PA) are a major part of the performance management

systems which includes the various coaching and development activities that takes
place as a part of the performance management systems (DeNisi,1996).
Performance appraisals are done to be in command of employees in sync with the
behaviours and productivity of them to the goals of the organization (Krausert, 2009).
The set objectives must be met for the effectiveness of the system and the flow of
the information must connect all the pieces (Mohrman et al 1989).
The figure above shows the phase wise process carried out during the course of the
performance appraisal. Performance appraisal helps in building a stronger
commitment to the organization and improves the job satisfaction level among the
employees which is an efficient process in motivating the work force. It also forms
the basis for the promotion and pay hike among the employees. Performance
appraisal plays a major role in seeking alternative measures to resignations and
terminations, thereby lowering the attrition rate and increasing the retention rate of
the organization. Focal point of performance appraisal is to improve and develop the
employees for the future direction by focussing on continuous improvements which
increases the productivity of the organization (Tanke, 2000).

Job Analysis, Description and Specifications

Job analysis is the process by which data, with regard to each job is systematically
observed and noted. It helps in understanding the nature of the job and the
characteristics or qualifications that are required by the job holder (Saiyadain, 2009).

Job Description usually outlines the minimum requirements of jobs. Although it’s
difficult to give a fully inclusive job description, a job description is useful if it is
presented in a simple and clear manner with explaining all the duties in detail
indicating the degree of authority available to employees to fulfil the requirement of
the job and the supervision that the employee will be subjected to (Saiyadain, 2009).

Job specification specifies the minimum eligibility requirements like qualifications

needed to perform a particular job which includes academic qualifications, personal
qualifications, age and years of experience. A good job specification can help
companies to reduce the recruitment costs (Saiyadain, 2009).

External Sources

Human resource planning in the companies is prejudiced by a number of factors

outside the organization. The planning has to take in to account with the altering
degrees of uncertainty, political, social, economic and technological factors.

Legislative/Political Influences: The government plays an important role for the

companies to forecast their manpower. The Planning Commission, Ministry of
Labour and the Institute of applied Manpower research have made projections from
time to time to project manpower demand and supplies for various skill categories.
The companies are asked to supply their data on their manpower for competence to
execute certain contracts.

Social Factors: In Some states a greater preference is given to employing local

citizens. This is an aftermath of a political decision to reorganise the states of the
Indian Union on linguistic basis. In an economy plagued with high unemployment
rates such a policy is politically manoeuvre at the state level (Saiyadain, 2009)

Economic Factors: The economic factor of the business environment is another

imponderable factor. The prevailing business climate effects the planning because
the future is shaped by the current conditions, productivity level, interest rates,
economic growth, consumer prices, and unemployment rates affecting the business
outlook (Mathis & Jackson, 2010)

Technological Changes: The change in the methods of management techniques and

changes in the production and distribution of products is referred to as technological
changes. With the introduction of Computers, the skill requirements of almost all jobs
have changed substantially (Saiyadain, 2009)

Internal Factors

The Strength and weakness of the organization represents the factors within which
the organization that either create or destroy value. When assessing the internal
environment, managers evaluate the quantity and quality of human resources, HR
practices and the organizational culture (Mathis & Jackson, 2010).The SWOT
analysis forms the basis for the internal environment depicted by the figure below
Source: Mathis & Jackson, 2010 p45

Other Internal Factors

India’s culture, like its history defies simple explanations and broad categorizations.
India is a vast and a complex country characterized by plurality of languages
religions and cultures which refers India with a high context culture. Power distance
GLOBE’s theory of power distance is apt for India as the distance between
management and employees is very high.

Power Distance : P o w e r d i s t a n c e i s a p r i m a r y c a u s e o f i n t e r c u l t u r a l
tensions. In India, we find loads of inequalities at every part of
life. The hierarchy system differs from organization to
organization. Larger the organization, higher the hierarchy system
exists and vice-versa. Tasks are assigned based on status in the
organization using detailed and definitive instructions (Moore,
2006). According to Hofstede, the power distance in India is high
and rated Indian on the scale of 56.5. Therefore, to conclude,
power distance is high in India. This is evident in case of a job
opening where d preference is given to the candidate referred by
the higher authority than the person who has applied without any
reference.
Collectivism/Individualism: Indians used to be relationship
focused. In India, we find family businesses. People believe to
follow the traditional rules set by their ancestors. But the
changing scenario of the current situation and due to emergence
of MNC’s and growth in educational level in individuals’, people
are becoming professionals and moving towards working outside
their family business to have better pay packages and other
benefits. People are ready to move outside their homes and some
even ready to go abroad and adopt the cross-culture scenario to
make a better living. According to Hofstede, the collectivism in
India is high. But now this view of Hofstede is changing in India,
individualism is increasing in India. People are more flexible and
have mobility and freedom to do what they want (Katoch, 2007).
Few of the MNCs combine their selection and training programs in
a collectivistic manner.

U n c e r t a i n t y A v o i d a n c e : Uncertainty Avoidance is the extent to which a society,

organization, or group relies on social norms, rules and procedures to alleviate
unpredictability of future events. Most people lead highly structured lives with few
unexpected events. Indians basically don’t try to take risk as they always have a
savings mind for their future generation. The Indians try to be more securing, which
they believe will save their children and their generation. I n I n d i a , p e o p l e t h i n k
that doing things that are different would not be accepted. They
think it is against the society norms. Everyone wants to be within
the crowd. For instance, dress code at work place. In advertising
agency, employees do not have any dress code. They may wear
formal or informal clothes, as they wish. But at an organization,
one must wear appropriate formal clothing (Chatterji, 2009).

Masculinity/Feminity: Indian business world is ruled be males like

Ambani’s, Tata’s, Birla’s and others. But the ladies ruling into
politics and business started when Late. Shrimati. Indira Gandhi,
the first Indian lady ruled the nation (Oxford Thinking). Also in
terms of business, Sullaja Firodia Motwani, the young lady who is
the Joint Managing Director of Kinetic Engineering Ltd, is
performing effectively in the industry (Dixit, 2002). This shows the
change in culture differences between masculinity and femininity.
Though masculinity still rules, femininity is emerging in India.
According to Hofstede India is a nation of high masculinity and
rated on the scale at 56 but as Indian is modernising and changing
culture, India is moving towards low masculinity. The current
change is leading to a challenge for both, males and females in
the country.

Conclusion:

The Globalisation and the fast changing pace at which things are changing has given
India the edge to enter the list of one of the fast developing nations in the world.
Having a cosmopolitan work atmosphere with all the leading MNCs having their
offices here, the Human Resource Management plays an important role in giving the
companies the policies, procedures, and the way to function while taking care of both
the employees and the employee mutually. It has become one of the most important
departments in the organisations. It is also important in terms of evaluating the
performances of the employees and rewarding them accordingly. However there are
certain internal and external factors that should be taken in to consideration before
making any decision and/or new regulations. Hence to conclude it can be said that
Human resource has emerged as one of the key player in shaping the success of the
organisations globally.

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