A critical study of human resource management in a particular country - Essay Example

?A critical study of human resource management in a particular country Introduction Globalization has the power to transform economies and market trends across the globe. The effects and the factors contributing to the status of a company or an organization with respect to the global market are varied and differ from country to country. These differences can be clearly noted and visualized in the fields pertaining to the management of any organization. This paper explores the reasons as to how human resource (HR) and employment practices reflect a distinct demarcation in the policies and the values adopted by organizations across geographical boundaries. India presents a diversified market and business economy and the country has proved to be a lucrative market to the entrepreneurs for investment in business. The human resource management (HRM) practices in the country assume interesting dimensions owing to its diversities and complexities existing in the business environment. The study presents an in-depth assessment of the HRM practices in this country. India is considered to be one of the robust and emerging economics in the world. Many companies overseas are considering India as an epicenter for outsourcing jobs. Indian firms are continuously expanding by adopting the corporate strategy, other financial and management aspects in order to buy sell or merge two companies to form an entirely new entity. This is quite evident from the fact that in the year 1997, Indian companies as a whole had bought 34 foreign companies for about $11 billion dollars. This has been possible primarily because of the rise in capital investment and labor force. It is speculated that by the year 2020, India will add 18 million labors which is more than the entire labor population of Germany (Chatterjee, 2007). This huge labor population has called for an entirely new, reformed and an advanced version of HR concepts and practices in India. Institutional context in human resource management – an overview of theories According to the Concise Oxford English Dictionary (2002), an institution is defined as “an official organization with an important role in a country” or “an organization founded for a religious, educational, or social purpose” (Hollinshead, 2009, p24). Globalization has triggered widespread changes in existing institutional structures within economies. The changes in institutional frameworks and governance practices on account of globalization have fuelled debates and controversies regarding the efficacy and viability of such changes. A number of economic theories and concepts have shaped the economic and social order of countries that provide an idealized platform for economic growth and development (Rodrik, 2007). Adam Smith in his works The Wealth of Nations outlined the doctrine of Neo-liberalism in the year 1776. According to this doctrine the market forces have an inherent capacity of allocating and utilizing the resources according to its own desired way which can restrict and endanger the distribution and usage of wealth. The capital and the labor forces should have a freedom of movement; they should have the flexibility to work anywhere (Hollinshead, 2009). Every individual should pursue their self –interest only in rightful way and is accountable for his or her own action. Thus according to Adam Smith, the state should not interfere with the movement or the behavior of the labor or capital. There should be no restrictions on the trade and the economic transactions should be allowed to act freely without any resistance by the government (Abbott, 2008). Neo –corporatist ideology, whose ideas and views are quite contrary to the neo-liberalism focuses on the usage and the importance of the state with regards to meeting the interest of the major and influential social groups who are dealing with the human resources and the capital intensive products and services. According to the theory the uncontrolled and non restricted market forces may generate uneven and unpredictable results. This may give rise to unequal distribution of resources and materials. Nevertheless, this creates an unhealthy economic competition in the market and proves hazardous to the public goods. The market orientation should be managed by general education and the awareness of the elements of the market forces. There should be an active participation by the different groups of society which share the same interest (Hollinshead, 2009). The Marxist ideology deals primarily with capital accumulation and is the main source of inspiration to the socialist movement across the globe. According to this theory, there is nothing to be categorized as political equality and the government always supports and thinks about the economically sound section of the society and hence favors moneyed or the rich section of the society. Thus unemployment and insecurity is predominant in the capitalist society. This also enables the employers to ask more work and pressurize the labors to get more and complex works. Many would simply adhere to the same to avoid the fear of being eliminated (Hollinshead, 2009). These theories have served to explain and understand the economic structure and policies adopted by institutions for effective management of labor force. While such theoretical aspects help in defining and understanding the management practices, the reality is based on a combination of these theories. The subsequent sections provide an assessment of these practices in the Indian context. The Indian context Over many centuries, India has learned and practiced management ideas across the globe. As early as 4500 B.C. to 300 B.C. the records of trade show that India has been absorbing the teachings and the ideas related to the social and public administration ideologies and links. India’s relation with the HRM and its counterpart can be well understood by the fact that the world’s first management book titled ‘Arthashastra’ revealed and underlined many aspects of human resources in the Ancient India. This book was written three millenniums before Christ. This proves the concept of HR inherent in India since a long time. This book presented not only the teachings of human resources management but the notions of the financial aspect of the state, the principles and the guidelines pertaining to the trade and commerce and the management techniques of the people are also laid down. India has a rich diversity of social and cultural structure. Nevertheless, it has been able to learn much from these multiple sources which clearly represented new ideas, philosophy and thinking (Chatterjee, 2007). India has been able to draw inferences and adapted many practices from the learning from around the world. According to Vedantic philosophy which is considered as a holistic wisdom depicts the managerial ideologies at all of the level of organizations. The social value and the culture remains much glued to the teachings and the philosophy of the ancient tradition. They are increasingly proving to be linked with the corporate principles and its corresponding global connectivity. Indian management is influenced and based on the teachings and the findings of the ancient wisdom (Chatterjee, 2007). The recent trend of globalization has given birth to the need of much advanced technical education, media and the trade union culture and foreign investment. This has resulted in many tensions and problem to creep in the Indian financial market. The Indian managerial leaders laid down a logical and structured step by step procedure and practiced the measures of being accountable for any critical issues arising in the organization and to safeguard the problem related to the turnaround cases. The other ongoing challenges are the innovative challenges, implementing the marketing practices and other product planning. India has a trend of demographic uniqueness with regard to the Indian workplace. It is estimated that by 2030, India will have 986 million eligible to work as per the permitted working age is considered (Schuler & Jackson, 2007). This reading is approximately 300 million more than in 2007. Almost half of India’s current population of 1.1 billion people is under 25 years of age; it is pretty evident that Indian workplace is quite dominated by the young generation. Each and every organization in a particular country is more or less guided by a set of rules, values which occupies a place in a person’s mental thoughts and beliefs (Budhwar & Bhatnagar, 2009). Owing to the virtue of globalization, many changes have taken place in terms of the technological advancements, business management, education and communication perspectives which has definitely effected the mindset of the managers , their way of working and business behavior per se. In the early 1990s, a set of changes were observed in the mindsets of the corporate and the HRM practices which occurred as a result of the global requirements followed by changes in the social urgencies and importance. There has been a constant and a steady shift in the demand of the skilled and educated workers. The need and the importance of the HR became prominent in the Indian organizations. In the business sector like the software firms, pharmaceuticals and biotechnology, the role of HR is of profound importance where India is having a global control in the market (Budhwar & Debrah, 2004). Illustration of the main components of Indian HRM trends (Source: Chatterjee, 2007) The above figure represents the main components of the Indian HRM trends. There are four external spheres of HRM namely intellectual, socio cultural, emotional and managerial which are shown in a coordinated manner in an organizational framework. The intellectual sphere has been shown as much affected by the forces of globalization (Chatterjee, 2007). According to Chatterjee and Pearson (2000), when they dealt with 421 senior level Indian managers, traditional Indian values like the respect for seniors, status of a person are not the only areas of focus and attention. Instead work quality, customer service have also formed their place in the mindset of managers and the management which is a definite outcome of globalization. The most important area related to work place is the scope and looking for more opportunities to learn. The other three spheres which are the emotional, socio cultural and the managerial sector are also facing and experiencing profound changes. In the emotional sphere the factors like creativity and innovation to encompass the workplace commitments, corporation and lays much emphasize on effective teamwork. They also envisage the virtue of transparency of behavior, opinion and integrity as also a crucial element in any organizational set up and practices. The managerial sphere depicts the shifting of the mindset of the management and the people. In most of the Indian organizations HRM is considered as closely and effectively linked with the managerial along with technical capability (Gopalan & Rivera, 1997). Industrial relations The Indian Industrial relation can be categorized in two aspects. There is no scope for the union leaders or the union to act as a representative for negotiating between the employers and the employees. In other words the union is not considered or recognized as a mediator for collective bargaining. The government has a vital role to play towards guiding and regulating the industrial relation matters. In India, there is a law pertaining to the formation of a trade union which would comprise of the employees from the work force (Reddy, 1990). The right of exercising the legal power by them to combat any dispute or to resolve any bargaining is not granted by the employers. The base of the Indian industrial relation is the dominance of the political parties in deciding, guiding and forming and funding the trade union parties. They have derived all sort of advantages by creating a place and hold in the trade union groups of the company. The union membership is considered the most popular and corrupted platform to be used by the different political parties. They have time and again generated conflicts among the union members to seek their self interest. During the year 1970, the number of strike increased and consequently the registered number of trade unions rose to at least five times of what it was now till that time. In the 1980’s, owing to a robust economic and political reform movements, the trade union movement took an entirely new turn. Now the trade union was not confined only to the dictatorship of the political parties rather new avenues in the direction of reforming the union outlook and the working were introduced. Many new global thinking and ideas related to the structure and the functioning of the union started to be implemented. Since then the Indian industrial relation started exercising the potentials of the globalize markets (Sen, 2003). The political parties who were reaping surplus benefits from the traditional industrial relation or the personal management also noticed a clear departure from the same. The union started visualizing the positive effects of incorporating new thinking in the labor laws. There has been a change in terms of the intellectual and the qualified thinking across the demographic stretch, which gave birth to the whole new and advanced thinking. The need of the hour is to accommodate some flexibility, and a healthy work culture and systems in the Indian industrial relation. The mental block in the mind of the people and the union is still an obstacle toward any development in this regard (Chatterjee, 2007). Problems and challenges In India, more than 70 percent of the population stays in the urban areas. Globalization has though opened many new avenues for enhancing the job opportunities but in the human resources and industrial context, unemployment is still a major issue (Meredith, 2007). The lack of job opportunities is not confined only to the uneducated or less educated section of people only, many Indian university graduates find it challenging to get a suitable job. There is dirt of job prevailing in the Indian economy. The students have to compromise with the quality of job or with the pay packages. With the call centers job mushrooming up over some few decades, there is some hope for the urban population. However, the rural and the urban poor sector of the communities are still facing the age old bottleneck of getting a job to sustain their living or to aspire to rise to the middle class standard. This has nevertheless, created a social and political tension among the people of India. The outsourced companies or the call centers pays approximately $275 a month which is the lowest paid, whereas most of the Indians still earn about less than $60 a month. Owing to the impact of globalization, there has been a steady rise in the areas of Indian technical services. Consequently the practices, rules and regulation pertaining to the HRM have also witnessed a change (Chatterjee, 2007). The changes are mostly in the policies related to recruitment and retention. The IT industry has helped the private educational institutions to come up in a big way as the colleges and universities offering higher education have not been able to cope up with the meeting demands of the global imperatives. Job hopping is posing as a caveat to the recruitment problem and much so adding up to the problem of HRM. The educated or the cream section of the society has a tendency of jumping across the jobs to get their dream jobs. This trend of turnover is prominent with the graduates with the entry level salaries. The number of graduates and the percentage of turnover are directly proportional to each other (Chatterjee, 2007). They have created a ban to the Indian labor market. This trend is detrimental for the HR sector and has created an imbalance in the Indian job sector. The solution to the same would be the permission being granted to the higher education sectors to be able to operate as their own, in other words the deregulation and the autonomy is granted to be exercised in these sectors. This gap is widening more and more between the university system and the demand for job in the market. Nonetheless this has become a major source of problem in the companies of India. The issue of turnover has been a persistent problem and a major cause of concern for the HR managers in India. In the call centers, attrition is one of the major concerns with the HR. This industry though considerable new in its type has gone through the journey from zero employment to becoming an employer. Most of the people working are the young, well educated and ambitious crowd who just aspires to earn money. Retention policy is the only measure through which this problem of turnover can be taken care off. BPO is a high value adding sector in the Indian economy. The issue of retention poses more challenging than recruiting the young talents to this sector. It is estimated that the attrition rate is about 20 to 25 percent in the BPO industry worth $40 billion. Many companies are trying to implement some attractive and lucrative packages to hold the employees also that the issue of attrition can be taken care off (Chatterjee, 2007). According to Slater (2007), in the traditional customer service jobs or the call center jobs, attrition rate is the highest. This is a place where the young graduates or the people have to spend their nights talking with people of different origin. They have to solve the problems of the irate customers, over the phone. They reach the pint of saturation quite early and in a hope to venture new job they tend to leave the previous one. There is a different type of work in the BPO such as claim processing and accounting where the talking is less and the employees can escape from the so called graveyard shift, finds it more lucrative and comfortable to sustain the job. As a result of which the turnover rate is also low. The HR department has to be in a negotiating phase with the employees at all the point of time, so that the experienced and skilled workers can be retained nicely and smoothly in the company. Conclusion Human resources has come up a long way as a capable section of an organization towards playing an instrumental and a remarkable role in helping their organization grow and flourish. They have being recognized as playing an important role towards achieving the goal of reducing the ill effects and enhancing the positives effects by a company, on the society and environment. This has nevertheless contributed to the success of the global economy and it is now recognized as most important and crucial part towards the global development. In India, the concept and culture of HRM has undergone impressive changes in recent years. Three different perspectives in HRM have now evolved. The global firms are trying to take and adopt to the Indian context, HRM practices and culture is now used extensively in the public sector undertakings, Indian companies have a global outlook. Much emphasis is now laid on following and adhering to the global concepts and practices. India is a land of diversity. The variations in terms of the industry size, business type and culture and different political issues play a prominent role in shaping up the work culture and the set up of the organizations. There are some strict and stringent hierarchal existing in the political and social structures, status quotient and some other similar concepts which are quite prominent and vary widely. Considering all the facts it becomes inevitable for the country to have a robust and developmental HRM which will help in the organizational performance and personal success. References 1. Abott, K. 2008, International and comparative human resource management: Study guide and readings, Deakin University. 2. Budhwar, P.S. & Debrah, Y.A. 2004, Human resource management in developing countries, Routledge. 3. Budhwar, P.S. & Bhatnagar, J. 2009, The changing face of people management in India, Routledge. 4. Chatterjee, S. R. 2007, Human Resource Management in India: ‘Where From’ and ‘Where To?’, Research and Practice in Human Resource Management, 15(2), 92-103. 5. 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Slater, J. 2004, Job-hopping central: Far East Economic Review, 8(1),34. Read More