Human Resource Management in a National Context - Dissertation Example

 Human Resource Management in a National Context Introduction The project aims to explore and bring forth the various factors and determinants which have shaped the human resource management practices in organisations. The nation chosen for the study is India. In doing so, special emphasis has been provided with regards to the economic background of the nation and its influence over the management practices adopted by organisations. The Indian economy depicts a clear picture revealing how structural adjustments in the economy are responsible for and determinant of the evolution of the laws pertaining to human resource management. Research reveals that the economy in India was subjected to a number of structural adjustment programmes since 1991. Primarily liberalization was one of them which opened up the closed economy. The liberalized economy was responsible for creating a competitive environment which required prompt response in order to control and stabilize the sudden turbulence in the economy. It was crucial from both the perspective of organisations as well as the economy on the whole. Human resource management practices play a significant role in enhancing corporate performance (Som, 2008, p.1278). This report seeks to understand the factors which have evolved the role of the human resource departments in organisations in India, with emphasis on the labour laws in organisations. A discussion has also been provided pertaining to the system of education and training, trade unions, the system of collective bargaining and employer organisations. The project also speaks of the present trends and patterns of the human resource management practices in India. It provides a number of data and case studies of different organisations in the nation which highlights the different approaches in HRM. In this regard, the project also discusses the various problems and issues that organisations in the nation have been confronting with. Current patterns and trends in the approach to HRM in India The context of organisational success in India remains deeply rooted in the nation’s history and culture. The value system in society enriched with respect towards elders, the joint-family system, the trend of future savings as well as the British rule in India have impacted the development of the workplaces in India. The large agrarian society embeds the culture of hard work, labour dignity and the concept of sharing of responsibility which accounts for the key components of success of the firms in India. The nation’s democratic governance has enabled the policy makers and financial institutions for setting the foundation for the country’s success (Websu-kat, 2008, p.1). One of the most important points worth mentioning is that there have been huge investments made by the Government of the nation in the field of education and population control. Great investments coupled with assistance from the developed nations of the world have been the major factors in creating the nation’s value propositions in the international market. Together with its own set of strengths and weaknesses the nation is identified as one of the leading emerging economies in the world. It also has entered into trade relations with a number of nations in the world (Websu-kat, 2008, p.1). Few of the major determinants which make the Indian HRM different from the rest of the world are s follows: The culture in India is rooted deeply in its collective values which provides a tendency of maintaining collaboration in the place of work, team work and group activities. The Indian society is also very diverse in terms of religions, culture and traditions. This reflects the ability of the Indians in accepting diversity of thoughts and also working together. In terms of the work culture, long hours of work, perseverance and money requirement are some of the determinants affecting its human resource management policies in the country (Websu-kat, 2008, p.2). A general pattern has been noticed with regards to the extent of government intervention in maintaining employee relations particularly through institutional and legal framework. It is characterised by protective legislations and processes. Governments are also seen to have direct links with the trade unions which are perceived to be in the advantage of the employees. The proliferations of the trade unions are seen to create demarcation issues and also difficulties in coordinating union strategies and policies (Macdonald, 1997, p.15). The general HRM trends in India are like that other developing economies which are in the stage of transition. The advantage is that it can create new legislations and institutions required to suit their needs and requirements for the time. It has the capacity to draw the experience of the industrialized nations ((Macdonald, 1997, p.15)). The trade unions are strongly considered as most important for the identification of the interest of the ‘State’. Some of the rising issues are the changing roles of the trade unions and the emergence of the entrepreneurial and employers interests. There has been a gradual weakening of power of the Labour Ministries which has led to the emergence of difficulties in the establishment of effective industrial relations arrangements. There has also been resurgence in the collective bargaining which has been able to bring about changes in the work organisations in terms of the use of new technologies and attainment of greater and efficiency and enhanced productivity (Macdonald, 1997, p.15). The Institutional Context and its impact on HRM in India The following part of the project highlights on the institutional context that influences the human resource management practices in the country. The major emphasis would be in the different laws pertaining to HRM. The education and training system in the country has also been highlighted in this context. Finally, substantial data has been provided with regards to the emergence of employer organisations, trade union organisations and the collective bargaining structures and company governance. A brief description has been provided to show how each of the above context influences the human resource management practices in organisations of the nation. Trade Unions and employment contracts Among the national institutions, the national labour laws are seen to have the maximum influence over the HRM practices and policies. This pertains to both the local and national organisations. This is particularly understandable because there are as many as 150 central and state laws governing the different aspects of the same at enterprise levels (Storey, 2009, p.439). The two most important laws which dictate the conditions and terms of the workplace are the “Industrial Disputes Act 1947”, “Trade Unions Act 1926” and the “Industrial Employment (Standing Orders) Act 1947” (Storey, 2009, p.439). Unfortunately, even though there has been extensive proliferation of the legislations, the implementations of the same have been particularly weak. Apart from the legislations, the unions have particularly influenced the strategies and policies in the country. Conventionally, they are characterised to have an antagonistic nature. This can be primarily attributed to the heavy political support that they enjoy and also existence of the pro-labour laws. The policies and practices in HRM are also influenced by the training and vocational set-up of the country. Institutes like the “India Society for Training and Development and the HRD Academy” (Storey, 2009, p.439) strongly influence its strategies. The following figure depicts influence of the national institutions on the human resource management practices in India. Figure 1: Influence of national institutions on HRM practices in India (Budhwar & Debrah, 2004, p.82) In the place of work, trade unions are seen to represent countervailing power to the management authority. The country does not have any craft unions. Either the unions are plant based or they are national organisations run locally in the individual states. Their activities are also focussed on meeting the requirements of the immediate members of the plant or the local industry (Tayeb, 2005, p.80). Collective Bargaining Structures The political and socio-legal context is particularly important with regards to the labour regulations and institutions of collective bargaining in a particular country. These factors do not remain static over the time and can enable changes in particular industrial and cultural contexts. In India, collective bargaining plays a vital role in influencing the implementation and choice of the process of human resource management practices. The labour legislations in India particularly try to protect the interest of workers in respect of the organisational rights, unfair labour practices and collective bargaining. Collective agreements is said to be a “contract setting out the terms and conditions of employees in the bargaining unit” (Sharma, 2009, p.153). The legislations pay particular emphasis over employee inequalities, unfair dismissal of employees, though the country’s caste system perpetuates employment inequalities (Wood, 2009, p.264). Regulatory context acts as a mediating variable which limits the arbitrary implementation of the HRM practices undertaken by the MNCs. Collective bargaining coupled with support from the management influences diffusion of the new practices in HRM in organisations (Cooke, 2003, p.191). In the unionized organisations, most of the decisions pertaining to human resource management are influenced by collective bargaining. It generally defines things like the source of recruitment, the hiring criteria, promotions and lay-offs, eligibility for training and other disciplinary practices (Stoner, et al, 2010, p.3.33). An example can be provided in this regard. In a fire department in a community, employment can be denied to a person who remains confined to the wheelchair. In case the very same individual is applying for a desk-job, his employment cannot be denied for the same reason. The laws permit trade unionism and collective bargaining with the objective of protecting the interests of the employees from different hazards in the workplace (Stoner, et al, 2010, p.3.34). Performance Appraisal System and Rewards Virtually performance appraisal systems have evolved in all organisations in India. It is associated with the formulation of human resource practices with regards to the setting of work standards, assessment of the employee’s actual performance in relation to the standards, provision of regular feedback to the employees with the objective of providing the required motivation for work by removing the loopholes and deficiencies and encouraging them to perform above their standards (Varkkey & Dessler, 2009, p.338). The appraising of performance is not only a difficult issue but also an essential one. The human resource management practices equips the supervisors and the HR professionals to rate the performance of the employees. It demands that the supervisors remain familiar with the appraisal techniques and have a thorough understanding of the same. He must also have the ability to remove problems that are likely to cripple appraisals. The HRM policies also ensure and design strategies which make the system of appraisal absolutely fair and just. In this regard, the human resource departments in organisations serve as a policy making and advisory body. The human resource departments provide the necessary assistance and advice regarding the tools of appraisal and their usage. However, the final decisions are left to the division heads. In certain organisations the human resource departments also play the crucial role of preparing the detailed procedures and forms for each department (Varkkey & Dessler, 2009, p.338). Since the time of embracing globalisation, a number of multinational companies have opened businesses in India. They usually enter into joint ventures or try to take over the Indian firms. Many of such joint ventures and take-overs have occurred in the Indian economy previously. This calls for the requirement of team work and collaboration of work. This has driven the need for implementing performance appraisal systems in firms for assisting the managers and the employees to understand the needs of the other’s objectives and expectations. A system of monitoring the systems of appraisals has also evolved to ensure that it is in compliance with the relevant laws and regulations (Varkkey & Dessler, 2009, p.343). Education, Training and Development The vocational training and education set-up is one of those factors which have influenced the HRM practices in India. One of the institutions worth menti9oning is the “Indian Society for Training and Development” (Budhwar & Debrah, 2004, p.83). “The All India Management Association, the National Institute of Industrial Engineering and the HRD Academy” were set up a number of years back. They are meant to provide training to employees belonging to every level of the organisation. In the year 1998, a certain scheme was introduced for the secondary education to be vocationalised. It was launched in schools for classes XII and XI. Under this scheme, as many as 150 numbers of courses were started in six different areas. The areas were agriculture, commerce and business, engineering and technology, paramedical and health and home sciences. These institutions provided educational and academic support to the employees in organisations. The Indian organisations have made regular attempts to emulate the western management patterns. This is because the managers in India are often found to be trained from western nations. Many of the institutes of management are also found to be influenced by the education system prevailing in the west (Budhwar & Debrah, 2004, p.83). However, research reveals that the international institutions have very weak influence on the HRM practices in India. The institutions which are found to be increasingly influencing the HRM practices are the “International Labour Organisation”, (ILO), the “General Agreement on Tariffs and Trade (GATT)” and also the “South Asian Association for Regional Co-operation (SAARC)” (Budhwar & Debrah, 2004, p.83). The Indian HRM strategies and policies are mostly influenced by the ILO. However, in practice, the guidelines provided in ILO are not followed vividly in the Indian organisations. Institutions like the SAARC enhance mutual cooperation in the regions but have little influence over the HRM practices in the country (Budhwar & Debrah, 2004, p.84). Employer Organisations Human resource performance has become increasingly important from the time Indian firms have started diversifying, expanding, and internalizing. The role of human resource management practices has been increasingly trying to increase the effectiveness of employer brands. The historical background leading to the situation has been described as follows. The increasing concern for the welfare of labour was the driving force behind evolution of the HR profession. With the advent of the MNCs the number of employer organisations also began to increase. These are organisations which lease the employees to other organisations. The responsibility of compensation, taxes, and other employee benefits lie with the professional employer organisation. The HRM practise have significantly evolved with regard to protecting the interest of the workers because the employer can hire, fire and even reassign employees as when he wishes (Mondy, 2008, p.13). Case studies of industries (Recent discussions, HRM issues and problems) A number of labour disputes have been witnessed during the recent in both Indian and multinational organisations. One of the recent examples of labour dispute in the Indian context is the occurrence of labour dispute in Jet Airways in 2009. Various representatives from different labour communities, like officers’ associations and trade unions involved themselves in protests and strikes. A number of pilots engaged in strikes which eventually landed numerous passengers in trouble. With the growth of such labour unrest the need for altering the labour laws was felt. Labour reforms were primarily meant to bring about greater protection of employees and removal of labour discontent in organisations (Nagendra & Chowdary, 2009). The year 2009 was marked with the most serious of industrial disasters in India. In December 1984, “tonnes of poisonous methyl-isocyanate gas leaked from the Union Carbide pesticide plant and killed about 4000 people instantly” (Business and Human Rights Resource Centre, 2010, p.3). The firms are increasingly seen to avoiding to take liabilities for the disasters. Such cases triggered the need for greater accountability for the human rights. Under this companies are increasingly asked to show more concern for such disasters and take responsibilities and compensate for the loss. NGOs have recently been seen to be objecting to the trials on young girls of HPV vaccines (Business and Human Rights Resource Centre, 2010, p.3). In 2010, 21 workers had lost their lives in a garment factory called ‘Garib & Garib’. The employers were faced with a lot of pressure from the unions to compensate the workers for the loss. The efforts were successful. However, there are instances which show that employers still remain least concerned for their workers who are met with such disasters (Business and Human Rights Resource Centre, 2010, p.3). Conclusion It is seen the human resource management policies and strategies have gradually changed and evolved over the years. They have been primarily brought about by liberalization and other economic changes which called for protective rights on the part of the employees who were vulnerable to threats and difficulties from the employers. The current patterns of the HRM practices in industries are shaped by the country's cultures and traditions. Government intervention has also played a major role in giving shape to the labour laws and rights of workers. The Government has taken major steps to introduce protective policies and strategies for employees. The Trade Unions Act incorporated in 1926 and the Industrial Disputes Act of 1947 is the major laws incorporated to provide protection for the workers. The laws also make collectible bargaining as an important tool to make the worker's more vocal in establishing their rights before the employers. They are collectively bargain in terms of their working hours, conditions of work, working environment, compensation and other benefits. The laws especially protect the interest of workers in case of hazardous works and during disasters. The system of performance appraisal and reward play a major role in influencing the HRM practise in organisations. They are particularly designed to be fair and without loopholes or errors. The nation has particularly witnessed the emergence of vocational trainings and education set-ups. A number of institutions have emerged which provides training to employees at different levels in the organisation. Finally the labour laws particularly focus on providing protection to the employees employed by the professional employer organisations. Two of the most recent issues pertaining to the implementation and changes in labour laws were the Jet Airways dispute and the gas tragedy in Bhopal. It triggered further intervention on the part of the Government to implement modify the labour legislations to make them more protective towards the workers. Reference Budhwar, P. S. & Debrah, Y. A. 2004. Human Resource Management in Developing Countries. Routledge. Business and Human Rights Resource Centre. 2010. Business & human rights in South Asia – a round-up of recent developments. [Pdf]. Available at: http://www.business-humanrights.org/media/documents/south-asia-regional-briefing-jul-2010.pdf. [Accessed on March 11, 2011]. Cooke, W. N. 2003. Multinational companies and global human resource strategies. Greenwood Publishing Group. Macdonald, D. 1997. Industrial relations and globalization: challenges for employers and their organizations. [Pdf]. Available at: http://www.ilo.org/public/english/dialogue/actemp/downloads/publications/dmirglob.pdf. [Accessed on March 11, 2011]. Mondy, R. W. 2008. Human Resource Management. Pearson Education India. Nagendra, V. M. V. & Chowdary. 2009. Jet Airways’ Labour Dispute: Trade Unions and India’s Labour Conundrum. [Online]. Available at: http://www.ibscdc.org/Case_Studies/HRM/HRM0049.htm. [Accessed on March 12, 2011]. Som, A. (2008). Innovative human resource management and corporate performance in the context of economic liberalization in India. The International Journal of Human Resource Management. Vol. 19, No. 7. [Pdf]. Available at: http://www.ashoksom.com/12-Innovative-HRM-Performance.pdf. [Accessed on March 10, 2011]. Sharma, S. K. 2009. HANDBOOK OF HRM PRACTICES: Management Policies and Practices. Global India Publications. Stoner, J. A. F. 2010. Principles of Management. Pearson Education India. Storey, J. 2009. The Routledge companion to strategic human resource management. Taylor & Francis. Tayeb, M. H. 2005. International human resource management: a multinational company perspective. Oxford University Press. Varkkey, B. & Dessler, G. 2009. Human Resource Management, 11/e. Pearson Education India. Websu-kat. (2008). HRM in India. [Pdf]. Available at: http://www.websukat.com/SMU-Books/Human-Resource-Management/2-HRM-in-India.pdf. [Accessed on March 10, 2011]. Wood, G. 2009. 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