HR practices in INDIA

Evolution of HR India

The Beginning --- 50’s

60’s --- 80’s

90’s --- TODAY

 The Beginning
• Before 1929
– HR existed informally
– No standards
– Nature and community were the law
• 1929 to 1931
– Standardization
– Introduction personnel management
– Formation of Trade Unions
– Welfare measures for workers
• In 1947 to 1950
– Introduction of workers legislations
 INFLUENCING EVENTS
• Royal Commission of Labour
• Political leaders like Mahatma Gandhi influenced the way
industrial workers are managed. This focus made an
adequate number of employees available to the industry,
disciplined the “rural” and “less educated workers” and
implemented various legislations and settled disputes.
• Influence of progressive employers who on their own
cared about the well being of the employees. (Tata Steel
in Jamshedpur)
• India’s independence
 60’s--- 80’s
• In 1960’s  HR was coined
– Welfare management
– Scientific management
– Administrative management
• 1970
– Personnel administration
– Industrial relations
– Labor welfare
– Union activism  legalized
– Managerial unionism (see 1)
 60’s--- 80’s
• 1980
– Philantrophy
– Standardized legal framework
– Trade unions
– Emerging trends due to changes in economy
– Shift to HR development and orientation
– HR became integral part of Indian organizations
 INFLUENCING EVENTS
• 1961, with the full cooperation from the trade union, the Indian Aluminum Company Ltd.
Conducted a plant wide work study at its Alupuram, Kerala plant. This lead to defining
the work output, staffing pattern, and productivity linked inventive scheme. The
establishment of management training institutes and business schools like XLRI and the
IIMs helped the industry to imbibe modern management principles and thought.

• Professors Udai Pareek and T V Rao were among the pioneers who not only introduced
the human resource development (HRD) concept in India but also assisted many
organizations in designing development oriented HR systems. The have discussed the
paradigm shift from traditional personnel function to the human resources system.

• It was recognized by then that systematic attention to human resources was the only way
to increase organizational effectiveness. This awareness created the stage for the direct
involvement of top managers and line managers in the HRprocess.
 90’s --- Today
• Strategic focus
• Proactive approach
• Service focus
• Key part of organizational mission
• Process based organization

 People are investments

Current Situation
 Recruitment methods
• Broad range
– Walk-in interviews
– On-campus recruitment
– Advertisements and recruitment agencies
– Employee referrals
– Top Indian Business Schools
– “Probationary officer program”
 Training
• Education is extremely valued
• Entry point training programs (3 to12 months of
orientation).
• Ongoing training programs.
• Development programs (promotions involve
training).
• In-house training centers are a common feature in
Indian organizations.
• Deductive learning style in training
 Performance Appraisal

• Challenge of the collectivist culture

• Annual performance appraisals.

• Supervisors provide performance ratings
• Employment termination carries a social stigma.
 Compensation
• Structure of compensation
– 40 % basic salary
– 35 % flexible benefit plan
– 25 % retirement benefits and performance based
pay
• Several categories of leave (vacation)
• Compensation level
Compensation
 Public Retirement
• Retirement age

• Provident fund

• Employees State Insurance

 Opportunities
General
• Knowledge Outsourcing
 Managers and team leaders go to different countries
and come back training a new team.
• Technology Changes
• Maximizing prospects
 Culture- Change in culture from company to
company
 Rewards for outperforming employees
 Opportunities
• Skilled labor employment
 Involves recruiting individuals who are
motivated and talented
 Also gives an opportunity for the person to
discover their talents.
• External- Follow-up with other companies
through rigorous competition.
 Confidentiality of information, respect and
integrity
 Opportunities
Specific
• Referral centres, walk- in interviews

• Integrate talent management systems

• Training and development

 Opportunities
• Secure new talents via mergers
• Expansion of services
 Due to vast employee work forces in MNC’s,
delegation among business teams
• Change according to economic situation
• HR women managers
 Many opportunities for women to run as
leaders
 Opportunities
• IT offshore outsourcing in India:
 Cost savings
 Abundant English- speaking talent pool
 MNC’s infrastructure
• Increasing awareness of offshoring to India
abroad.
• IT in India seems to have been and becoming
the biggest hub( Bangalore)
 Opportunities
• Time zone difference between India and target
markets.
• Branch networks – Every branch has integrated
ways of handling HR as a whole within the
company.
• Clear objectives
 Training and induction programs
 Workshops
 Makes the individual best fit for
company
Challenges Faced in India
 Recruitment & Selection
• Small pool of experienced professionals (relative
to its population).
1.1 billion people -> 350 million use English -> 20 million fluent in
the language
• Work Force Quality
2.5 million college graduates per year – qualification not always up
to western hiring standards
• Economic & Technological Changes
Occupational Shifts , Global Competition
• Demographics
Migration of people from the rural to metropolitan cities
 Attraction and Retention
• Competition for the talent pool with MNCs
In terms of salaries, perks and incentives
• Creating a favourable and attractive
organizational
Brand name, culture and security
• Managing the high rate of attrition especially in
the outsourcing and IT industry
Loss of training cost and efficiency
• Motivating the employees
 Training and Development
• Reduce resistance to change
• Technical needs
Adapt faster to changes in information technology and other
business processes
• Learn about International business practices
and cultures
Increased globalization calls for more interaction with people
across the globe
• Developing Leaders
 Some other issues…
• Integrating HR function with other business
functions
It is no longer possible for HR systems and processes to work in isolation
from the rest of the organization
• Integrating various HR policies and systems to
achieve optimum performance
• Equip themselves to handle the increasing number
of mergers and acquisitions
• Managing work force flexibility
“Virtual office”, off site teams and cross functional work teams
Comparison Between
Asian Countries
 India And China

India China
• Walk- in interviews • Online Recruitment
• No rehiring • Expatriate, returnees
• Compensation plan and locals
• Flexible benefit plans • 3 pillar pay model
• Performance based • Performance based
advancement bonus and annual bonus
• Career advancement
 India And Malaysia
India Malaysia
• Overtime is paid double the • Overtime is paid 1.5 times
amount the amount
• Leaves are common for • Leaves vary on the basis of
everyone experience
• Collective bargaining is free • Collective bargaining is
there are no restrictions restricted
• Notice period for leaving the
• One month notice period job differs as per years of
• Strikes are not registered work with the organization
• Strikes are registered before
 India and Indonesia

India Indonesia
• Industrial dispute • Industrial dispute
settlement (voluntary settlement
method, collective (Arbitration,mediation,etc)
bargaining,etc) • Strikes are registered
• Strikes are not registered • Employee test based
• Performance based selection
selection
 India And Japan
India Japan
• Open labor market • Internal labor market
• Job rotation is not • Preference to job
preferred rotation
• Performance based pay • Seniority based pay
• More gap between • Small gap between
benefits of white collar benefits of white collar
employees and blue employees and blue
collar employees collar employees