A Study To Compare Hrm Policies And Practices

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The objective of this study was to explore and compare the varied HRM policies and practices adopted by two different organizations- one of them being a consultancy/research based organization and the second one being from the fashion industry.

The present study also aims to evaluate in measurable terms as to how much of the organizational dedication, commitment and employee loyalty in both organizations could be specifically attributed to effective HRM practices.

For the purposes of this research, 45 study subjects were selected on a random basis from each of the two organizations. The Geringer, Frayne and Milliman scales were used for the purposes of calculating HRM practices and the Meyer and Allen scale was used to measure dedication. Analysis of data was carried out through t-test and multiple regressions.

It was found that there existed significant differences in the HRM practices found in the two organisations and the organization that belonged to the fashion industry scored higher on various HRM practices. It was illustrated by Deterioration consequences that different HRM practices had significant role in predicting organizational dedication in the two organization, as also when they were combined. Other variables like "Presentation assessment" and 'attitudes towards HRM department' were also found to be significant predictors of organizational commitment in the both the organizations. Keenoy (1999) aptly likened human resources management to a hologram. Like a hologram, HRM too is a fluid entity that changes its characteristics with each play of light, revealing yet another facet and different contour.

To survive in a competitive environment, a business organization has to efficiently exploit its human resources by periodically introducing positive and innovative changes into its HR practices. HR practices need to be in sync with the organisation's big picture vision if it is to retain its agility and competitive edge in the market. TCS, has been a market leader in the highly competitive IT industry, and there is no doubt that its implementation of innovative HR policies and practices has had a big role to play in its success. As part of the live case study on TCS, a six day "leadership-teaching program" was organized by the All India Management Association in collaboration with faculty from the Havard Business School at the Tata Management Centre in Pune.

TCS has been a role model for many IT startups and established players, having been a front runner in the industry for decades now. The company is only getting better, agile and more competitive with the passage of time, and has drawn much appreciation the world over for its innovative HR practices. If the company can continue to adapt its HR approaches as it has continually done in the past, to the market needs, and the changing requirements of its employees, there is little doubt that it will be able to quite assuredly carve out a niche for itself in the highly competitive industry, revealing that planned, visionary HRM that is in sync with the organization big picture is far more superior to HRM that merely caters to market whims. The following discussions throw light on the HR procedure adopted by TCS that has and continues to faciliate inclusive growth, development and competitive advantage for the company.

Reviewing literature, it seems to be implied that there are two ways to conceptualize HR systems. First, it is often implied that HR systems span two extremes ranging from high performance or commitment oriented to more control oriented HR systems (Arthur, 1992, 1994; Delery & Doty, 1996, Guthrie, 2001; Huselid, 1995). Essentially, HR systems are either oriented toward high performance through investment in employees or toward a more administrative or controlling approach to managing employees..

At the same time, a review of earlier studies shows that there is at best a very weak correlation between internationally recognized measures of organizational climate and effectiveness. (Campbell, Dunnette, Lawler, & Weick, 1970; Payne & Pugh, 1976). Schnieider (1975) notes that the concept of organizational climate was somewhat ambigious and as a result, it would have very limited influence on performance outcomes.

As an alternative, Schneider claimed that organizational climate was to be conceptualized as a particular construct, and rather than trying to include everything, it should be focused on achieving a specific objective.

For instance, Schneider's studies showed that a climate of service was linked to customer-evaluated service quality(e.g., Schneider, White, & Paul, 1998), customer satisfaction, and employee performance (Liao & Chuang, 2004); A climate of training was found to lead to the transfer of new skills (Tracey, Tannenbaum, & Kavanagh, 1995); a climate of safety was found to have an influence on employee safety behaviors and accidents (e.g., Hofmann & Stetzer, 1996; Zohar, 1980); technical skilling (Kozlowski & Hults, 1987), climate of ethics and morality (Victor & Cullen, 1988), climate of fair play and justice (e.g., Liao & Rupp, 2005; Naumann & Bennett, 2000), and climate of innovation (Anderson & West, 1998; Klein & Sorra, 1996) are some of the other organizational climates that have been subject to study.

We need to take our studies beyond form and function of our HR systems to consider several issues that are likely to affect the consistency and reliability of these empirical studies. There are many issues related to the level of analysis, spotting the appropriate referent group and the variable that should serve as key informants etc., Understandably, our investigations and research will prove far more effective and accurate if we can target the group of employees who are vital for contributing to the strategic objective, and get accurate information about how these employees are administered.

It is important that HRM agenda not be confined to mere manpower planning or training. In addition to all this, HRM should also be occupied with institutional HR behavior and systems and a strong orientation to strategic management of HR in addition to day to day

HR related work.

All these multiple roles need to be integrated into a system, the HR system. All organizations, public and private need strong HR systems, policies and practices that can prepare employees and make them capable of adapting to change.

The HRD assessment tools provide a structure that allows organizations to examine the HRM systems, and strengthen them. Four role models is a tool that helps organizations think broadly about the role of HR and what it can do to help organizations retain a competitive edge.

Arthur is of the opinion that some of these HR practices are focused on improving worker commitment while others focus on improving worker efficiency. Yet others deal with increasing management efficiency. (Youndt et al., 1996). But quite often, different HR practices are used by different people to achieve the same HR objective(Huselid, 1995) It is debatable that the differences in the notion of HR methods also influences the practices and methods that are used to accomplish the goal

External analysis

External analysis is the next phase of SWOT analysis, and after a detailed study of the external environment, the company will have to identify the opportunities and constraints faced by the industry. Since opportunities and constraints are part of the external environment, the company cannot influence on these factors.


A thorough evaluation of external environment will render the company capable of identifying threats and opportunities. Opportunities may come at various levels, industry or sector level or at the macro level. All these have an impact on the company's business. By understanding and analyzing the external environment, a company can take advantage of the opportunities in the environment in the external environment.


Threats too are part of the external environment, and if not managed properly can cause intense damage to the company's business. A proper analysis of the environment will make the company aware of any lurking danger, and become prepared to meet any potential threats that may occur.

SWOT analysis offers a clear idea of where the company stands and helps it get an overview to creating steps that can improve its competitiveness.

For example, a SWOT study may help a company determine if there is an urgent need for transformation within the organization, whether it is competitive enough, and whether its policies are geared up for the market. Through all this, SWOT can help the companies get a thorough and unbiased report of where they stand, and how they should go about addressing the future.

Some sources of threats are as follows:

In the industrial setting, it is common for most top managements to bypass the HFRM system contribution, by employing external consultants

• Greater unemployment rates

• long periods of inflation

• Market competition

• Government rules and regulations

• Cheaper substitutes

• New and rapid innovations that render existing products obsolete

The following activities are also relevant to the new model:

Envisioning corporate strategies and objectives

Changes in macro level and international policies

Identifying sources of opportunities

Survey of corporate risk

Exploring unexploited markets

Exploring new and changing customer needs

Product demand

Demographic conditions

Acquisitions and mergers

Perception of organizational integrity and ethics.

SWOT analysis offers a clear idea of where the company stands and helps it get an overview to creating steps that can improve its competitiveness.

For example, a SWOT study may help a company determine if there is an urgent need for transformation within the organization, whether it is competitive enough, and whether its policies are geared up for the market. Through all this, SWOT can help the companies get a thorough and unbiased report of where they stand, and how they should go about addressing the future.

Evaluation of Human Factor based Risks

¶ Weighting by AHP method

¶ Scoring by formula

¶ Full-set Risk Shaping / influencing factors taxonomy (RSF's / RIF's),

Thevendran and Mawdesley in 2004 stated that a number of human factors influence the environment as well as the human behavior at work, which in turn can increase or decrease the achievement of organizational goals. These factors are inclusive of the human factors that affect HRM. These factors are taken into consideration in any evaluation of personnel risk score in an organisation. Managers will consider risk shaping or risk influencing factors as variables as evaluation, analysis and decision making warrants.

Risk shaping /influencing factors have been derived from performance shaping/influencing factors, that are already in existence. PIFs, as they are known, combine with human error tendencies to generate probable error situations

In sweeping terms, PIF may be defined as a factor that determines the probability of error or effectiveness in human performance (Embrey, 2000). PIF can also be further segregated into work related and human related factors (ExproBase,2008). PIF and PSF are mutually compatible and used in the sectioning of human factors.

External performance shaping factors include work environment, equipment design, written and oral processes and instructions. Internal PSF includes individual traits, aptitude, motivation and desires that influence the performance of a person.

Lin and Hwang in 1992 noted that Stress PSF are Physiological stresses that result when the demands of a task is not in the capacity of the operators in the system

PIFs can include any factor that affects human performance. It can also describe individual or external factors that may be in the environment (Millar and Swain, 1987).

The taxonomy of PIFs put forth by Glendon in 2007 are based on the Performance Influencing and Performance Shaping Factors of Miller and Swain(1987) and Sheue-Ling Hwang and Ya-Lih Lin (1992). These are most appropriate for the new systematic approach of the HFRM model.

All the factors that have been researched from the above studies have been compiled in to a new RIF/RSF taxonomy, after omission of items that have very little to do withhuman risk. Stressor factors were removed as it was found to be difficult to calculate risk score.

The factors affecting performance can be classified into two.

¶ External Risk Shaping Factors/Risk Influencing Factors

¶ Internal Risk Shaping Factor/Risk Influencing Factor (RSFs/RIFs)

Analytical Hierarchy Process weighs the impact of human factor and the weighted results are used to evaluate the full score which is the probability multiplied by impact.

Management of human factor based risks has an important role to play in risk management and sustainability. It takes into consideration positive and negative attributes of human nature like skill, competitiveness, motivation, revenge, loyalty etc.,

Thevendran and Mawdesley raised some key questions in the development of the above mentioned taxonomy. They are as follows:

• What kind of human risks do not amount to unacceptable activities like fraud, unethical behavior etc.

• What risks are equated by the organization as new initiatives, such as innovation?

• What risks are acceptable to the organization for mutually competitive objectives such as creativity and non conformity

Saaty's Analytic Hierarchy Process has been used to rank the impact levels of RSF/RIFs. The four principles put forth by Saaty namely, decomposition, prioritization, synthesis and sensitivity analysis determine the application of AHP.

Decomposition deals with a situation where a complex problem is broken down to manageable elements, which are then again broken down into simpler elements in each ensuing step.

Prioritization involves comparing two or more elements that formpart of the same level, with an element from the higher level of hierarchy.

Synthesis: Where priorities that are complied through hierarchic composition provide an assessment of alternatives.

Sensitivity analysis deals with testing the best alternative against potential "what-if" type alterations in criteria.

When decision makers make exaggerated judgments or mistakes, it can result in inconsistency. The AHP process uses a consistency ratio to evaluate the consistency of judgment. A consistency ratio of 0.1 is considered as the acceptable limit, and judgments with a consistency ratio greater than 0.1will have to be reevaluated. In AHP, a measure of absolute values in the range of 1-9 are used for making comparison judgments

The AHP procedure is available as a software package in the market. The existence of such tools enable managers to do a sensitivity analysis, which can improve the effectiveness of human factors identified through AHP. The conclusions show that internal factors are often influenced and shaped by HRFs or human risk factors.

This formula and risk analysis can be used by managers to calculate risk score for the employees. Threshold values can be assigned by risk management team members, jury members or HR managers.

Other activities like training and education would also have to be included to improve performance. Risk is calculated including internal and external factors. Employee performance assessment can be calculated with RIFs/RSFs and score formulas. This model provides a structure approach that can be used as a tool for performance management.

The results are relevant in assessing HR performance in a company, helping managers identify high performers, average performers and those with special needs such as training and development

An evaluation of scores will reveal the strengths and weaknesses of the employees and help managers in optimizing worker strengths and working on the weaknesses

HFM model enables effective management of threats and opportunites and helps organizations achieve their goals and objectives. Thus human opportunities can be capitalized upon, and threats managed effectively, and an organization can be reasonably assured about progress towards achieving strategic objectives and sustainability.

It can also help in the following HR Tasks.

Identification of HR issues which can influence business strategy

Prioritizing of critical HR issues.

Step 3. Decision making for the effective handling of Human factor

Decision making has to do with identifying various options for dealing with human risk based factors, and maximizing opportunities available while minimizing threats. Managers should choose, prioritise and deploy the appropriate combination of Human risk factors with an aim to improve positive outcomes.

Step 4. Evaluation of Human Factor Risk Management

Human Factor Risk Management system performance calls for a qualitative metric of management that is based on predetermined "targets" or "benchmarks" and these HFRM efforts need to be to achieve.d Purpose of this step is to:

1. Asses HFRM performance and level

2. Identify weaknesses and strengths of the model

3. create improvements

4. Generate reports

5. Track progress

Step 5. Development of Human Factor Risk Management

The purpose of this step is to ensure that HFRM model is capable of suppording the changing needs of a business.

It is necessary to ensure maturity of HFM practices in the company and the following assesments are based on it.

1. Basic assessment: meeting basic internal and external stakeholder HFRM expectations and requirements.

2. Mature assessment: Are activities and techniques effectively managed by HFRM model?

3. Advanced assessment: Is the model seen as a strategic tool to enhance performance of the company?

(KPMG, 2008).

The framework can be summed up in the following important questions that have been adapted from Audit committee (Audit Committee, 2007, p. 1)

1. Does Human factor risk management enjoy management support?

2. Are there clear HFRM policies and strategies?

3. Are there proper collaborations with partners for managing human risk based factors?

4. Are employees trained and capable of managing human based risk factors well?

5. Are human factor based risks handled effectively?

6. Do company procedures talk about effective human factor management?

7. How does HFRM contribute to positive outcomes?

Framework is based on the EFQM excellence model and has been simplified to create a tool for managers in evaluating employee performance (Risk Support Team, 2003, p.2).

Monitoring and review help us asses the effectiveness of the improvement policies and also test the robustness of the HFRM system (Raggrett, 2006).

Ethical, cultural values and the expectations of stakeholders are an important part of the implementation process. Last, but not least, HFRM is never static or a one time event, but a continuous virtuous process of improvement and enhancement of efficiency