Human resource management practices in india


Indian Market has become one of the most well-known invading economics in the world. Apart from that it has also become the global hub for outsourcing. In the year of 1997, Indian companies were able to bring-in 34 foreign companies for U.S. $11 billion dollars (Chatterjee S.R, (2007)). By 2020, India expect to increase its labor association 250 million, this mean an addition of 18 million per year, which more than the Germany workforce in comparison (Chatterjee S.R, (2007)). This is the reason India had taken main concern regarding the Human Resource Management.


With the arrival of the Thatcherite era came an era where void in personnel function has to be filled.

Hence, Human Resource Management (HRM), invaded as an exercised personnel function, promising flexibility, responsiveness and a marked increase (Mankidy, (1995)) in the value of the employee. The traditional way of gaining competitive advantage have to be supplemented with organizational capability i. e. the firm's ability to manage people (Ulrich and Lake (1990)).

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Organizational capability relates to hiring and retaining competent employees and developing competencies through effective human resource management practices (Ulrich and Lake (1991)). Indeed, developing a talented workforce is essential to sustainable competitive advantage (Kundu and Vora (2004)).

High performance work practices provide a number of important sources of enhanced organizational performance (Pfeffer and Veiga (1999)). HR systems have important, practical impacts on the survival and financial performance of firms, and on the productivity and quality of work life of the people in them (Cascio (2006)).


The aims of this topic is to see what are the HRM practices followed by the Indian organizations and also to identify the methodology used by the Indian market.

The main objective of the study was to assess the human resource management practices being implemented in companies operating in India. To achieve the main objective, the following sub-objectives were set:

1. To assess practices regarding human resource planning and recruitment.

2. To identify selection and socialization practices.

3. To assess the practices regarding training.

4. To assess practices of performance appraisal.

5. To assess the compensation and benefits related practices.

6. To identify the workforce diversity and contemporary HR practices being implemented.

7. To assess the differences of perception of male and female employees regarding HR practices.


People are the greatest asset of any company, but it is recently that it has been actually realized, and Human resource Management departments have been setup. There are number of reasons in the Indian companies which require HR manager's attention. There are number of challenges like 'finding the right candidate' and 'how to conduct the working environment', these both are really important as to benefit the organization. Apart from these there are also some other problems faced by the companies are managing people, motivating employees to adopt new technologies, training, recruitment etc.

Bearing these challenges in mind, it is high time for the companies to start finding solutions. In a knowledge based industry handling the HR managers is a great challenge, because that would take-in multi-tasking responsibility. In the present era HR manger perform various responsibilities. Earlier it was only maintaining rolls and managing manpower, but now it has become more strategic due to the increasing demand of the industry. In this paper certain issues with the HRM practices in India will be discussed. They have been named below, as followed:

1.  Motivating the workforce

Due to the growth of the global market, a technological edge supported by a talent pool has become a vital factor for survival in the market. Due to the reason organization gives main priority to technology advancement programs. HR managers are now performing the role of motivators for their knowledge workers to adopt new changes (Chiamsiri, S., Bulusu, S. D. & Agarwal, M. (2005)).

2.  Managing people

Due to the increasing competition there is a need in the organization for knowledge workers, hence the companies always look for individual who can make a difference. Due to the reason gaining the right knowledgeable person had become a costly deal for the organizations but the attitude is different for those who are taking up responsibilities at a lesser age and experience. These factors have resulted in the clear shift in approach to individualized career management from organization career commitment (Chiamsiri, S., Bulusu, S. D. & Agarwal, M. (2005)).

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3.  Competency Development

Human capital is the real asset for any organization, and this makes the HR role important in recruiting, managing, and retaining the best. The HR department has a clear role in this process and determines the success tempo of any organization. An urgent priority for most of the organizations is to have an innovative and competent HR pool; sound in HR management practices with strong business knowledge (Chiamsiri, S., Bulusu, S. D. & Agarwal, M. (2005)).

4.  Recruitment and training

Recruitment has become a major function from an imperative sub system in HR. HR managers play a vital role in creating assets for the organization in the form of quality manpower. Another challenge for HR managers is to put systems in place to make the people a perfect fit for the job. Talent redundancy has also become major issue due to which HR departments provide related training programs. These trainings are quite useful also in terms of providing security to the employees (Chiamsiri, S., Bulusu, S. D. & Agarwal, M. (2005)).

5.  Trust factor

Low levels of trust inhibit tacit knowledge sharing in the knowledge based industry. It is essential that companies takes more initiatives to improve the security levels of the employees (Chiamsiri, S., Bulusu, S. D. & Agarwal, M. (2005)).

6. Work life Balance Factor

This aspect creates with it the challenge of a smoother assimilation and the cultural binding of the new comers into the organization fold. The pressure of delivering the best of quality services in a reduced time frame calls for ensuring that employees maintain a work life balance (Chiamsiri, S., Bulusu, S. D. & Agarwal, M. (2005)).

7. Attrition/Retention of the Talent Pool

One of the toughest challenges for the HR managers in any industry is to deal with the prevalent high attrition levels. Though there is an adequate supply of qualified staff at entry level, there are huge gaps in the middle and senior level management in the industry. Further, the salary growth plan for each employee is not well defined. This situation has resulted in increased levels of poaching and attrition between organizations. The industry average attrition rate is 30-35 per cent and could range up to 60 per cent (Chiamsiri, S., Bulusu, S. D. & Agarwal, M. (2005)).

8. Bridging the Demand Supply Gap

HR managers have to bridge the gap between the demand and supply of professionals. They have to maintain consistency in performance and have to keep the motivation levels of employees high, despite the monotonous nature of work. The same also leads to recurring training costs. Inconsistent performance directly affects revenues. Dwindling motivation levels lead to a loss of interest in the job and a higher number of errors (Chiamsiri, S., Bulusu, S. D. & Agarwal, M. (2005)).


The literature review regarding various HR practices is presented in the following paragraphs.

Job analysis is the process of obtaining information about jobs i. e. information about the tasks to be done on the job, as well as personal characteristics (education, experience, specialized training) necessary to do the tasks (Cascio (1998)). Job analysis in many ways is the first personnel activity that affects commitment and performance (Dessler (2003)). Human resource planning analyzes and identifies the need for and availability of human resources for an organization to meet its objectives (Mathis and Jackson (2004)).

Recruitment is a process of attracting a pool of high quality applicants so as to select the best among them (Kulik (2004)). Top performing companies devote considerable resources and energy to creating highquality selection systems (Pfeffer (1995)). Placement involves assigning a specific rank and responsibility to an employee (Jyothi and Venkatesh (2006)). Socialization, the process of orienting new employees to the organization, can make the differences between a new worker's feeling like an outsider and feeling like the member of the team (Gomez-Mejia, Balkin and Cardy (2003)).

The current challenges caused by the globalization pressures in the realm of economics behave work communities to review their personnel training and management practices (Pitkanen (2007)). Companies must develop a customer-oriented workforce to deliver service quality, which is met through training (Kundu (2000)). Training must be viewed as an important investment for future success (Zeithmal and Bitner (2004)).

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Companies need to provide comprehensive training to the agents in the ways to narrow the gap between clients and agents i. e. trust - building training (Law, Wong, and Theresa (2005)). Long-term basis training has a systematic influence on the improvement of management techniques (Zadel (2006)).

Performance is defined as the record of outcomes produced on a specified job function or activity during a specified time period (Bernardin and Russell (1993)). Effective managers need to incorporate performance review and feedback as part of their day-to-day communications with employees (Webb 2004). Appraisals are used widely for tying pay to performance (Schellhardt (1996); Cleveland, Murphy and Williams (1989)).

Present day firms are facing increased pressure to create human resources policies and programs that avert discrimination against individuals on non-work related aspects with respect to the various functions within human resource management, particularly selection and performance appraisal (Lillevik (2007)).


External fit: organizations with an effective approach to HR are alert to the external environment planning their HR recruitment's in manner that incorporates HR implications of changing the external environments and able to modify the strategy or resolve the problems arising from any environmental changes (Dr. Stephen Bach (2001)).

Internal fit: refers to a coherent approach to HR policy which is not over-reliant to one element, but combines HR policies into an integrated bundle of policies and processes (Dr. Stephen Bach (2001)).


As for the purpose of the data collection, I will be interviewing two people to let me know on more depth of the question. Various other literatures will also be reviewed as to find and gain the right knowledge. Some quantitative data would also be re-analyzed to execute accurate results.


For the purpose of this research paper, I will be following two research designs, they are:

1. Descriptive Design

2. Reviewing other research

Descriptive Design

This is doing a very descriptive study of the research question. These types of experiments are often used by anthropologists, psychologists and social scientists to observe natural behaviors without affecting them in any way. It is also used by market researchers to judge the habits of customers, or by companies wishing to judge the morale of staff (Martin Shuttleworth (2008)). The results obtained from the descriptive design cannot be used as a definite answer, or disapprove hypothesis. But still if the limitations are understood then it can be utilized as an important tool.

Review of research

Literature review will be utilized in this context. A literature review is a critical and in depth evaluation of previous research. It is a summary and synopsis of a particular area of research, allowing anybody reading the paper to establish why you are pursuing this particular research program. A good literature review expands upon the reasons behind selecting a particular research question (Martin Shuttleworth (2008)).


The World Competitiveness Report rated India's human resource capabilities as being comparatively weaker than most Asian nations (Business Week, 2007). Indian human resource capabilities have become world recognized now, and it has become an important point to achieve global success. Three very different perspectives in HRM are evident. Firstly, Indian firms with a global outlook; secondly, global firms seeking to adapt to the Indian context; and thirdly, the HRM practice in public sectors undertakings (PSV'S) (Chatterjee, S.R., & Pearson, C.A.L. (2000)). With the increase of the Indian economy all these three perspectives more increasingly strengthen. Regional variations in terms of industry size, provincial business culture, and political issues play very relevant roles (Chatterjee, S.R (2006)). The nature of the power structure, responsibilities, authorities, status and similar concepts are widely all over the nation interacting with the maintenance systems. As it is organizational performance and personnel success are critical in the new era (Chatterjee S.R (2006)).