human resource management notes 2

7/28/2019 Human Resource Management Notes 2

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Unit 2: HRM in India

Structure:

2.1 Introduction

Objectives

2.2 HRM in India

SAQs

2.3 Human Relations Movement

SAQs

2.4 Scope of HR in India

2.5 Summary

2.6 TQs

2.7 Answers to SAQs and TQs

2.1 Introduction

The Indian story for organizational success is one that is deeply rooted in its history and

culture. The Indian value system rich with respect for elders, joint family system, saving for

the future and the British rule along with the freedom struggle have strongly impacted the

shaping of the Indian workplace. The largely agrarian nature of the countrys wealth builds

hard work, dignity for labour and shared responsibility as key components of the success of

the Indian firm even today. The role of the countrys democratic governance framework

enabled policy makers and the financial institutions to set the stage for Indias success.

Leading from the front has been the unparallel investment made by the government in the

area of education and the control of population. This together with the assistance from the

developed country helped the country create its own value proposition globally. Unique in its

strengths and its weaknesses India today is identified as among the leading emerging

economic in the world sharing space with larger countries (both in size and scope) like

Russia, China and Brazil. India continues to climb the curve of success even after 60 years of

independence, with symbiotic trade relations with almost every other country in the world.

Objective:

History of Indian concepts in HRM


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How is it unique from the rest of the world

2.2 HRM in India

As it stands today the Indian organization could not have hoped for more. Viewed from the

global perspective, in addition to being strategically positioned on the corporate world map as

a low-cost, highly skilled destination, the Indian corporate is emerging as a base for

committed and intelligent and a very knowledgeable workforce. This has been achieved by

the help of a strong foundation provided by the Indian education system at the primary,

secondary and the technical as well as professional level. It is undisputed that the Indian

Institute of Technology, the National Institute of Technology and the famed India Institute of

Management are among the world-class institutions to talk about. Quality education and

research are encouraged on these campuses and across the country, which mould and

contribute to the practices in Indian organizations.

The HRM practices in Indian organizations are by no doubt unique. 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 though in-step

with international HRM practices have a flavour their own. We will discuss a few distinct

differentiators that make India HRM different from global HRM trends and patterns:

The Indian culture is one that is deeply rooted in its societal and collectivistic values

providing for a natural urge to collaborate at the workplace, work in teams and groups

and achieve.

The diversity that is seen in the Indian society w.r.t. diverse religions and states are

reflected in the ability of the Indian and the Indian corporate to tolerate diversity of

thinking and working together without inhibitions

Work culture-wise, the hard work, long working hours, perseverance and the need to

earn money impact the HRM policies

Availability of a educated mass of different calibre of knowledge and skill allows the

country to undertake different nature of work beginning with lower skilled activities

such as BPOs(Business Process Outsourcing) and moving up the value curve to far

more advanced activities as KPOs (Knowledge Process Outsourcing).

Compensation costs as still a competitive advantage for India making it a preferred

business location the world over.


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Current trend in the over populated urban part of the country are quickly fading out to

tire 2 and tire 3 cities and town where the cost of living and wage levels are not as

competitive, further expanding the Indian resource base for hiring and building talent,

contributing to the overall gain of the country.

HRM in India however is not structurally well-researched and hence a lack of theoretical

information to track and document its progress, unlike in the emerged countries likes the

USA and the UK. Research is yet at its infancy in India and there is a lot of dependence on

the emerged countries in emulating best practices in the way people are hired and managed.

Today the organizations of Indian origin have their unique HR strategies that work best for

them. Work more and earn more is a common and accepted philosophy at the Indian

workplace. Work is respected and revered and almost worshipped in Indian organizations.

Benefits are basic yet equitable and adequate. There is a high focus on cash in hand as

opposed to benefits and perks.

Our statutory and legal frameworks, as a result, are a lot more liberal and less restrictive as

compared to the emerged countries. An open society drives openness at the workplace and

hypocrisy is largely discouraged, leading to well structured policies and processes that drive

workplace behaviour. Diversity for India is a challenge very different from its existence in

the rest of the world. Diversity initiatives in India drive gender diversity and disability

diversity awareness.

Self Assessment Questions I

2.3 Human Relations Movement

1. In India diversity is a concern because we are very conservative and a closed

society (True / False)2. India is gaining importance because of the quality as well as the cheap cost of

living (True / False)3. Our legal framework is very advanced, allowing for foreign companies to work

easily in India (True / False)


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Kautilya provides a systematic treatment of management of human resources as early as 4th

century B.C. in his treatise titled "Artha-Shastra". As it has been described in the book, there

prevailed logical procedures and principles in respect of labour organizations such as Shreni

or guild system and co-operative sector. The wages were paid strictly in terms of quantity and

quality of work turned out and punishment were imposed for unnecessarily delaying the work

or spoiling it. The Government used to take active interest in the operation of both public and

private sector enterprises and provided well-enunciated procedures to regulate employer-

employee relationship. Kautilya provides an excellent discussion on staffing and personnel

management embracing job descriptions, qualifications for jobs, selection procedure,

executive development, incentive systems (Sarasa- saama- daana- bheda- danda- catura or

Carrot and Stick approach) and performance evaluation. We find several indications of

prevalence of guild system involving performance of work at the residence of the

entrepreneurs themselves. In course of time, the guild system was followed by co-operative

sector consisting of craftsmen and traders, and purporting to promote their professional

interests. Indeed, numerous professional societies were formed on these lines with their own

systematic procedures and policies to nurture their own interests. Again, there are several

indications regarding the operation of principles of the division of labour.

The concept of "Varnashram" or caste system was originally based on these principles. The

individuals who used to earn their livelihood by engaging themselves in activities such as

teaching, sacrifice or state management were designated as Brahmins while those specialising

in fighting were termed as Kshatriyas. Moreover, individuals engaged in the areas of trade,

business a nd agriculture were called Vaishyas and those devoting themselves in manual work

were known as Shudras. Later on, these professions emerged to be hereditary which

facilitated the transfer of skills and training from one generation to another. Numerous

professions based on such specialised transfer of skills became hereditary including

goldsmiths, weavers, potters, blacksmiths, carpenters, hunters, charioteers, snake charmers,

architects, sculptors, armourers and turned out to be separate communities by themselves.

From the 14th century B.C. to the later half of the 10th century A.D., the relationshipsbetween the employer and employees were marked by justice and equity.

As regards Indian economy in Mediaeval India, although there was a lull because of

numerous foreign aggressions for around 700 years, during the Mughal rules, the Indian trade

and commerce were revived. Several "Karkhanas" were established at Agra, Delhi, Lahore,

Ahmedabad and various other places. However, majority of the artisans and the craftsmen


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were extremely poor and lived on starvation level. Therefore, it was not startling that the

productivity of workers was very low. Presumably, low wages, climate conditions and poor

physique were the major factors responsible for it. During early British rules, there prevailed

a laissez-faire policy towards the business. As it is evidenced in the report of the Indigo

Commission, the working conditions were appalling, living conditions were sub-human and

several abuses prevailed in indigo plantations. Again, as regards tea plantation, we come

across several inhuman cruelties caused to the workers. Even the Plantation Act of 1863

makes provisions that if the workers failed to complete their period of contract, they should

be imprisoned for a period not exceeding three months. Explicitly, the working conditions in

the tea plantations were extremely bad. The labourers who attempted to run away were

subject to imprisonment, whipping and allied extreme punishment. Accordingly, the workers

were entirely helpless in the face of the organized and powerful European planters.

The above conditions prevailed till the enactment of the Factory Act of 1881. According to the

Act, the workers employed in the factories were allowed a week off-day and provisions were

also made for inspection as well as limiting the hours of work for women workers to eleven

per day. The act further provided that the minimum age of children for employment should be

seven years and that the maximum working hours for them should not exceed seven hours a day

and that too in the day-shift. In 1890, the first labour organization designated as Bombay Mill

Hands Association was established. Subsequently, in 1905, the printers' Union at Calcutta and

in 1907, the Postal Union at Bombay were established.

The Madras Labour Union was organized thereafter in 1918. In 1922, the indentured labour

system involving migration of Indian labour to other countries on contract basis was abolished

as a result of a strong National Movement. In the same year, the Central Labour Board was

established to federate the different unions in the Bombay city and the All India Trade Union

Congress was organized. It may be noted that the reliable statistics of trade union growth are

not available for the period before the formal implementation of the Indian Trade Unions Act,

1926, a landmark in the history of industrial relations in this country. The early thirties

witnessed a highly-weakened trade union movement. However, the conditions prevailing five

years before as well as during the Second World War, were conducive to the rapid growth of

the trade unionism. Between 1939-40 and 1944-45 the number of registered trade unions

increased from 666 to 865 (i.e., by 29.7 percent) and the total membership of union submitting

returns increased from 511, 134 to 889, 388 (i.e., by 70.4 percent). There was a large scale

expansion of the trade union movement after the Second World War - especially after the


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independence. As Subramanian observes, there existed four-fold reasons for this rapid growth.

These were as follows: (1) the cumulative impact of the acute economic distress stemming

from war conditions and the removal of the war-time restrictions on strikes, (2) the

development of three more central labour organizations and the competition among them, (3)

the labour policy of the Government based on adjudication rather than collective bargaining,

and (4) the growth of the spirit of trade unionism among the workers. Accordingly, during

the period 1947-1960 while, industrial employment rose by 2.8 times, the total claimed

union membership also went up by 2.3 times. In 1960, 45 percent of the total industrial

workforce was claimed to be unionised. Today, the total membership is estimated to be

around 4.3 million i.e., 28 percent of total workforce.

Explicitly, during post-independence period, the activities of Personnel Department in

different public and private sectors have multiplied. According to the provisions of section 49

of the Factories Act, 1948, it became obligatory for the-employers to employ a Welfare

Officer in a factory employing 500 or more workers. Likewise, section 58 of the Mines Act,

1952, empowers the Government to specify employment of welfare officer/officers.

However, it does not mean that the functions of Personnel Department are entirely limited to

welfare activities.

Management of human resources is being regarded as a specialized profession such as that of

medicine and law. In addition to the industrial relations functions (although sometimes the

industrial relations forms a separate department), the Personnel Department is responsible for

other varied functions including employment, safety, training, wage and salary administration

and research and development. The Head of the Personnel Department is associated with top

management and helps it in the formulation of personnel policies for the company. Indeed,

the activities involved in Personnel Department are akin to those performed in this

department in any other western countries.

Specially, where the personnel & industrial relations and welfare functions are combined in

one department, we obtain three categories of activities relating to these functions. Firstly,

although the Personnel Manager is a staff, he is responsible for the management of a

department. Thus, he has to perform several duties alike those of line managers in his own

department. Accordingly, he has to organize, plan and control the activities of his department

involving recruitment, selection and placement of persons and their training, leadership and

motivation. His ability lies in getting results through the people in his department. Thus, he is

a manager first and a personnel expert subsequently. Secondly, he performs a series of


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technical services and allied activities. Thus, he is responsible for industrial relations

activities including contract negotiations, grievance handling, preparation and presentation of

arbitration cases, research in labour relations, etc. Moreover, he is responsible for educational

activities including employees training, supervisory training, organization planning and

management, development, communication programmes and so on. Furthermore, he is

responsible for wage and salary administration involving preparation of job description, job

evaluation, incentive and profit sharing systems, executive compensation, etc. Again, his

responsibilities embrace employment activities such as recruiting, psychological testing,

medical examination interviewing candidates, employee record keeping etc. Last but not the

least, the Personnel Manager is responsible for technical services such as health and welfare

measures involving safety measures, recreational measures, and so on. However, personnel

counseling has been largely neglected in most of the Indian enterprises. This gives rise to

several grievances and lowers the efficiency of the workers.

Thirdly, the Personnel Manager's responsibilities relate to his advisory role. Usually, he has

to advise the line and top management in respect of legal matters regarding the issues such as

termination of services, transfer, etc., human relations problems confronting the line

managers and technical procedures in areas such as wages and salary administration. In some

instances, the Personnel Manager is required to advise management regarding the

improvement of human climate in the organization, social responsibilities of the enterprise,

etc.

Self Assessment Questions II

2.4 Scope of HR in India

Contrary to these forces, in India the owner manager is still the practice. Professional managers

are not yet important. Instead of decentralisation and delegation, there is the pattern of

dependency. The culture is highly authoritarian in character. The child is brought up to be

dependent on parents and superiors. The entrepreneurs operate in a secure, sheltered market and

hardly face challenges. For lack of job-opportunities, the workers cannot and do not have any

1. Kautilya provides a systematic treatment of management of human resources as

early as 4th century B.C. in his treatise titled.

2. From the 14th century B.C. to the later half of the 10th century A.D., the

relationships between the employer and employees were marked by...

3. In "Varnashram" or caste system, those devoting themselves in manual work were

known as...

4. During early British rule, there prevailed a ..policy towards the business.


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say in their jobs or working conditions. Finally, the trade unions are weak and politicised, and

collective bargaining, which could encourage participation, is rather absent. Hence, human

relations movement in India has not been developed to the extent available in the U.S.A. A

professor has suggested an action p rogramme, to develop "human relations." He says, "Human

relations should emphasise 'communication' as a major function of management." He further

observes, "Though Human Relations is not exhausted in good communication system, the latter

is the sine qua non for sound programme of Human Relations in India. It goes without saying

that communication here means not only the efficient sending and receiving of messages but

also includes sensitivity to the understanding of feelings, attitudes and cognitions of the

subordinate, in fact, it embraces the whole realm of interpersonal relationship in the

organization." Today there is enhanced awareness on the need for research based HRM

practices, and there is a lot of work happening in the Indian education system to promote this

but the Indian corporate with their heavy dependence on the multination practices have little

time to devote to contributing to this cause, blindly emulating the west.

Self Assessment Questions III

2.5. Summary:

HRM in India has been impacted both by its own history as well as multinational

companies that came and established their operations in the country

The countrys culture has played a critical role in building value for the country

globally

The caste system and the way it was structured to differentiate between different

categories of jobs remains a basic framework for the way work is distributed at the

workplace

The coming of the British to India and their administrations brought immense

1. The culture is highly __________________in character.

2. For lack of_________________, the workers cannot and do not have any say in

their jobs or working conditions.

3. ___________________ here means not only the efficient sending and receiving

of messages but also includes sensitivity to the understanding of feelings,

attitudes and cognitions of the subordinate.


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insights into the country on how to manage labour and work

It also gave rise to the trade unions and workplace equality issues

The impact of the World War I and II made their own impact on the Indian

organizations

The early days of structured HRM activities were largely hygiene related and

focused on the Personnel management principles.

Human Resources management as it is practiced today is a outcome of the

cultural(local) as well as the global MNC policies

2.6. Terminal Questions

1. Enumerate the growth of Human Resources Management in India and

its impact on India's ethos.

2. How did the India culture impact workplace HR practices?

3. How are the early HRM challenges different from that of the current?

2.7. Answers to SAQs and TQs:

Self Assessment Questions I

1-False, 2- True, 3-False

Self Assessment Questions II

1- Artha-Shastra, 2- by justice and equity 3. Shudras, 4- laissez-faire, 5-1918

Self Assessment Questions III

1- Authoritarian, 2- job-opportunities, 3- Communication

Answers to TQs

1. Refer to 2.3

2. Refer to 2.2

3. Refer to 2.4

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