Unit-2 HRM in India

Program : MBA
Semester : 1st Semester
Subject Code : MB0043
Subject Name : Human Resource Management
Unit number :2
Unit Title : HRM in India
Lecture Number :2
Lecture Title : HRM in India

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 Unit-2 HRM in India

HRM in India

Objectives

The objectives of this lecture are to:

• analyse the concepts of HRM in India

• describe the changing role of HR in India
• explain globalisation and its impact on HR

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Lecture Outline

• Introduction
• HRM in India
• Changing Role of Human Resource in India
• Globalisation and Its Impact on HR
• Summary
• Check Your Learning
• Activity

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Introduction

• After Indian independence, the government resorted to protectionism

in order to cultivate the country’s fledgling industries.
• There were very limited job opportunities and having a government job
was regarded with high esteem.
• This situation drastically changed after government liberalised the
economy in 1991 and allowed foreign competition.
• Domestic organizations were forced to raise the bar by improving their
products and services to compete with global organizations.
• More and more of private multinational organisations started setting up
companies in India bringing along with them global HR practices.

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HRM in India

• The economic liberalisation of 1991 has created a massive change in

the HRM perspective in India.
• It has led to the creation of a very competitive market situation and
also forced Indian organisations to think and implement innovative
measures to attract and retain employees.
• The Indian workforce is now being globally acknowledged as a
dedicated, intelligent and a well-informed workforce.
• This is the result of the strong foundation provided by the Indian
education system at the primary, secondary, technical and at
professional levels.

(Contd…)
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HRM in India

• A few distinct differentiators that impact HRM practices in Indian

organisations are:
o The Indian culture is one that is deeply rooted in its societal and
collectivistic values whereby there is a natural urge to collaborate
at the workplace, work in teams and groups with ease.
o Work culture-wise, the natural ability to work hard and long hours,
perseverance and the need to earn money impact the way the
work is organised in Indian organisations.
o Tolerance for diversity is high among Indians and therefore very
less HR efforts are needed to practice tolerance towards other
points of view.

(Contd…)
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HRM in India

o The tolerance for ambiguity however is low in the Indian

workforce, which requires a detail description of job roles and
responsibilities.
o Availability of a large educated group of individuals of different
calibre of knowledge and skills allows the country to undertake
different nature of work beginning with lower skilled activities such
as BPOs (Business Process Outsourcing) to far more advanced
activities like KPOs (Knowledge Process Outsourcing).
o Due to the availability of large employable individuals,
compensation and benefits costs continue to provide a competitive
advantage for India.
o Current trend is that the overpopulated urban part of the country is
quickly moving to tire 2 and tire 3 cities and towns where the cost
of living and wage levels are not so competitive.
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Changing Role of Human Resource in India

• The role of HR has undergone several changes in India. Human

resource managers are now being considered as strategic partners to
the organisation.
• They are involved in all the crucial business decisions made by the
company.
HR challenges:
• HR managers face challenge in upgrading the skill set of employees
through training and development.
• Indian companies are recognising their responsibilities to enhance the
employee’s opportunity to develop skills and abilities for full
performance within the position and for career advancement.
• Managing changes in technology is also one of the challenges that an
HR of any organisation in India faces.
(Contd…)
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Changing Role of Human Resource in India

• Technology is changing rapidly and every day we are witnessing

innovative technological advancements.
• Developing Accountability: With the advent of Six Sigma
methodologies, organizations have lowered their tolerance levels for
mistakes, errors and delays.
• Managing workforce stress and employment relations: If the HR of an
organization is not emphatic towards its workforce it does not help in
employment relations.
• Managing inter-functional conflict: With organizational restructuring
becoming common in the past few years, disputes and friction between
different functions has been on the rise.
• Managing workplace diversity: To manage the diverse workforce who
have fairly diverse physiological and the psychological influences, is
(Contd…)
also a huge challenge for the HR in the emerging Indian economy.
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Changing Role of Human Resource in India

Progressive HR policies:
• Today, most of the Indian companies are committed to provide equal
employment opportunities for all.
• The employers are increasingly realising the value of trained human
resource, especially women, in India. Some organisations are changing
their HR policies to retain their valuable employees.
Entrepreneurship by employees:
• Indian organizations are encouraging 'entrepreneurs' or employees who
have ideas that could potentially become an asset.
• HRM has taken a leading role in encouraging Corporate Social
Responsibility (CSR) activities at all levels.
• Corporate presentations and keeping employees updated through
regular newsletters are the instruments used by HR to keep employees
energised about the organisation’s socially responsible initiatives.
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Globalisation and Its Impact on HR

• The tendency of firms is to extend their sales and manufacturing to

new markets abroad and for business everywhere.
• The one element that is unique about every nation or company is its
workforce.
• A workforce that is knowledgeable and skilled at doing complex things
keeps a company competitive and attracts foreign investment.
• Well-trained workers attract global corporations, which invest and
provide employment opportunities to the workers, which in turn
generate additional training and experience.
Technology
• The most important use of technology in HRM is in an organisation’s
Human Resource Information system.

(Contd…)
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Globalisation and Its Impact on HR

Trends in the nature of work

• Technological and globalisation trends are in turn producing changes in
the nature of jobs and work.
• Following are a few trends in the nature of work:
• Information technology and personal computers have allowed
companies to relocate operations to locations with lower wages.
• Increased use of part time and temporary workers.
A service society
• An enormous shift from manufacturing jobs to service jobs.
• For service jobs new types of knowledge workers and new HRM method
to manage them.

(Contd…)
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Globalisation and Its Impact on HR

Knowledge work and human capital

• The distinguishing characteristics of companies today and tomorrow is
the growing emphasis on human capital–the knowledge, education,
training skills and expertise of a firm's workers.
• This growing emphasis on education and human capital reflects several
social and economic factors. Now companies are relying more on
employee’s creativity and skills.
Other trends affecting HRM
• Equal employment opportunity laws that bar discrimination on the basis
of race, age, disability, religion, sex or national origin, have been
passed.
• Virtually all managers are thus now legally bound to uncover and
correct instances of discrimination.
(Contd…)
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Globalisation and Its Impact on HR

• Mandated health benefits, occupational safety and health requirements.

• Union-management relations.
• HR managers have to deal with all these legal constraints.
Workforce diversity
• Diversity in the field of HRM can be defined as the situation that arises
when employees differ from each other in terms of age, gender,
ethnicity, education, etc.
• Managing diversity means establishing a heterogeneous workforce to
perform to its potential in an equitable work environment where no
member or group of members has an advantage or a disadvantage.
• To attract and retain young brains, organisations have to establish
appropriate HR policies, supported by attractive compensation offers.

(Contd…)
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Globalisation and Its Impact on HR

• There are five reasons for diversity being a dominant

activity in managing an organisation’s human
resources:
1. The shift from a manufacturing to a service
economy.
2. Globalisation of markets.
3. New business strategies that require
more team work.
4. Mergers and alliances that require different
corporate cultures to work together.
5. The changing labour market.

(Contd…)
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Summary

• The viewpoint to Human Resource Management in India

has shifted in last two decades. Economic liberalisation in
1991 created a hyper-competitive environment.
• As international firms entered the Indian market bringing
with them innovative and severe competitiveness, Indian
companies were forced to adopt and implement innovative
changes in their HR practices.
• One of the challenges HR managers face is the issue of
upgrading the skill set of employees through training and
development,
• Most of the Indian companies are committed to provide
equal employment opportunities for all.

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Check Your Learning

1. Define corporate social responsibility.

Ans: It is a set of actions of a company that changes
business operations to improve, maintain, or mitigate a
company’s impact on society and the environment.

2. Mention the five reasons for workforce diversity.

Ans: The five reasons for workforce diversity are:
• Shift from manufacturing to services
• Globalisation of markets
• Team work strategies
• Mergers and alliances
• Changing labour market

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Activity

Activity 1
Prepare a report on how the Indian culture has influenced
the HR practices in India.

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