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INTRODUCTION
Over many centuries India has absorbed managerial ideas and practices
from around the world. Early records of trade, from 4500 B.C. to 300 B.C.,
not only indicate international economic and political links, but also the
ideas of social and public administration. The world’s first management
book, titled ‘Arlhãshastra’, written three millennium before Christ, codified
many aspects of human resource practices in Ancient India. This treatise
presented notions of the financial administration of the state, guiding
principles for trade and commerce, as well as the management of people.
These ideas were to be embedded in organisational thinking for centuries
(Rangarajan 1992, Sihag 2004). Increasing trade, that included engagement
with the Romans, led to widespread and systematic governance methods by
250 A.D. During the next 300 years, the first Indian empire, the Gupta
Dynasty, encouraged the establishment of rules and regulations for
managerial systems, and later from about 1000 A.D. Islam influenced many
areas of trade and commerce. A further powerful effect on the managerial
history of India was to be provided by the British system of corporate
organisation for 200 years. Clearly, the socio cultural roots of Indian
heritage are diverse and have been drawn from multiple sources including
ideas brought from other parts of the old world. Interestingly, these ideas
were essentially secular even when they originated from religious bases.
In the contemporary context, the Indian management mindscape continues
to be influenced by the residual traces of ancient wisdom as it faces the
complexities of global realities. One stream of holistic wisdom, identified as
the Vedantic philosophy, pervades managerial behaviour at all levels of
work organisations. This philosophical tradition has its roots in sacred texts
from 2000 B.C. and it holds that human nature has a capacity for self
transformation and attaining spiritual high ground while facing realities of
day to day challenges (Lannoy 1971). Such cultural based tradition and
heritage can have a substantial impact on current managerial mindsets in
terms of family bonding and mutuality of obligations. The caste system,
which was recorded in the writings of the Greek Ambassador Megasthenes
in the third century B.C., is another significant feature of Indian social
heritage that for centuries had impacted organisational architecture and
managerial practices, and has now become the focus of critical attention in
the social, political and legal agenda of the nation.
One of the most significant areas of values and cultural practices has been
the caste system. Traditionally, the caste system maintained social or
organisational balance. Brahmins (priests and teachers) were at the apex,
Kshatriya (rulers and warriors), Vaishya (merchants and managers) and
Shwdra (artisans and workers) occupied the lower levels. Those outside the
caste hierarchy were called ‘untouchables’. Even decades ago, a typical
public enterprise department could be dominated by people belonging to a
particular caste. Feelings associated with caste affairs influenced managers
in areas like recruitment, promotion and work allocation (Venkatranam &
Chandra 1996). Indian institutions codified a list of lower castes and tribal
communities called ‘scheduled castes and scheduled tribes’. A strict quota
system called, ‘reservation’ in achieving affirmative equity of castes, has
been the eye of political storm in India in recent years. The central
government has decreed 15 per cent of recruitment is to be reserved for
scheduled castes, and a further seven and half per cent for scheduled tribes.
In addition, a further 27 per cent has been decreed for other backward
castes. However, the liberalisation of markets and global linkages have
created transformation of attitudes towards human resource (HR) policies
and practices (Khalilzadeh-Shirazi & Zagha 1994, Gopalan & Rivera 1997).
Faced with the challenge of responding to the rationale of Western ideas of
organisation in the changing social and economic scenario of Indian
organisation, practitioners are increasingly taking a broader and reflective
perspective of human resource management (HRM) in India.
This manuscript has three main parts. In the first part is provided an
overview of important historical events and activity that has influenced
contemporary managerial tenets, the second part of the manuscript
describes the emerging contemporary Indian HRM practices and indicates
some interesting challenges. Much of the second part is also summarised on
four informative Figures. The concluding section, the third part of the
manuscript, succinctly integrates the two preceding parts.
VALUE OF CONTEXT OF HRM IN INDIA
The managerial ideologies in Indian dates back at least four centuries.
Arthãshastra written by the celebrated Indian scholar-practitioner
Chanakya had three key areas of exploration, 1) public policy, 2)
administration and utilisation of people, and 3) taxation and accounting
principles (Chatterjee 2006). Parallel to such pragmatic formulations, a
deep rooted value system, drawn from the early Aryan thinking, called
vedanta, deeply influenced the societal and institutional values in India.
Overall, Indian collective culture had an interesting individualistic core
while the civilisational values of duty to family, group and society was
always very important while vedantic ideas nurtured an inner private sphere
of individualism.
There has been considerable interest in the notion that managerial values
are a function of the behaviours of managers. England, Dhingra and
Agarwal (1974) were early scholars who contended that managerial values
were critical forces that shape organisational architecture. The relevance of
managerial values in shaping modern organisational life is reflected in
scholarly literature linking them to corporate culture (Deal & Kennedy
1982), organisational commitment and job satisfaction (O’Reilly, Chatham
& Caldwell 1991), as well as institutional governance (Mowday, Porter &
Steers 1982). Thus, understanding the source of these values and in
particular societal work values (which link the macro-micro relationships
and in turn organisational practices) had become a popular line of enquiry,
and a great deal of evidence has been presented to support the importance
of national culture in shaping managerial values. One of the most widely
read formulations of this literature is the seminal work of Hofstede (1980)
who popularised the notion of clustering culture in generic dimensions such
as power distribution, structuring, social orientation, and time horizons. In
turn, these dimensions could be employed to explain relevant work
attitudes, job incumbent behaviours and the working arrangements within
organisational structures. Two of these dimensions were individualism and
collectivism.
The traditional social ethos from the ancient roots, which was developed
over centuries, underwent profound transformation during the British rule.
Consequently, in the contemporary context multiple layers of values (core
traditional values, individual managerial values, and situational values)
have emerged (Chatterjee & Pearson 2000). Though the societal values
largely remain very much anchored in the ancient traditions they are
increasingly reflecting corporate priorities and values of global linkages. But
in the arena of globalisation where priorities of consumerism, technological
education, mass media, foreign investment and trade union culture
predominate, newer tensions are becoming evident. For instance,
contemporary Indian multi national companies and global firms in India
have started shifting their emphasis to human resources with their
knowledge and experience as the central area of attention in extending new
performance boundaries (Khandekar & Sharma 2005). Considerable
research evidence attests to this trend with particular relevance to greenfield
organisations with little or no historical baggages in their organisational
culture (Settt 2004, Roy 2006).
Within Indian traditions the choice of individualistic or collectivistic
behaviour depends on a number of culturally defined variables. The
dynamics of these variables are underpinned through three key elements
guiding Indian managerial mindscapes. These three constructs are Desh
(the location), Kaal (the timing), and Patra (the specific personalities
involved). Sinha and Kunungo (1997) claim that the interaction of these
three variables determines the guidelines for decisional cues. This managing
or nurturing of the outer layer of collectivism in an inner private sphere of
individualism is expressed in Figure 1 which demonstrates the behavioural
anchors in Indian organisational life.
Figure 1
Behavioral Anchors in Indian Organisational Life
DECISIONAL Desh Kaal Patra
CUES (place) (Timing) (Actors)
SPIRITUAL Sattava guna Tamas guna Rajas guna
ORIENTATION (Virtue focus) (Negative focus) (Action focus)
INTERPERSONAL Sradha Sneha Bandhan
RELATIONS (Upward respect / Loyalty) (Downward affection) (Bonding)
Figure 1 also presents another powerful insight of the Indian tradition of the
notion of ‘Guna’ dynamics. According to Sharma (1996), this culture based
framework, which has three types of gunas (attraction), is being increasingly
used in employee assessment and organisational team building strategies.
The contention is that each guna is a separate contribution to the core of
human personalities. The Sattava (or truth orientation) is the sentiment of
exalted values in people, organisations or society. Alternatively, the Tamasik
guna depicts a negative orientation which can be expressed behaviourally as
ignorance, greed or corruption. Those individuals with a Rajasik guna are
inherently driven by a desire to make a worthwhile contribution to their
surroundings. Collectively, these spiritual orientations, which manifest as
Sattava, Tamas or Rajas gunas, articulate as positive or negative HRM
functions such as leadership, motivation or other institutional behavioural
activity. The third row of Figure 1 highlights the linking of HRM trends to
socio cultural roots. The culture of Sradha (upward loyalty) and Sneha
(mentoring with affection) outline the behavioural anchors derived from the
civilisational roots. The acceptance of ‘Sradha’ by youngers and the display
of ‘Sneha’ by the seniors have been the root of sustainability of all types of
Indian oragnisations. This has a striking similarity to the concepts of
‘oyabun’ and ‘kobun’ in the Japanese cultural context.
CONTEMPORARY INDIA
In a recent survey of Indian CEO’s, it was suggested that Indian managerial
leaders were less dependent on their personal charisma, but they
emphasised logical and step by step implementation processes. Indian
leaders focused on empowerment and accountability in cases of critical
turnaround challenges, innovative challenges, innovative technology,
product planning and marketing or when other similar challenges were
encountered (Spencer, Rajah, Narayan, Mohan & Latiri 2007). These social
scientists contend.
Leaders in other countries often tell about why they chose a peculiar person
for a certain role per task, detailing the personal characteristics that made
that person right for that situation. They may also consider, in detail, how
an assignment would help someone grow and develop their abilities. In
general, Indian leaders simply did not discuss how they matched particular
people to certain roles or tasks, nor did they usually consider in detail how
the personal characteristics of individuals might shape or inform the best
way to influence that person. (Spencer, et al 2007:90).
Figure 2 presents the key drivers for contemporary Indian HRM trends. In
Figure 2 there are four external spheres of intervention for HRM
professionals and these spheres are integrated in a complex array within
organisational settings. The intellectual sphere, which emphasises the
mindset transaction in work organisations, has been significantly impacted
by the forces of globalisation. Indeed, Chatterjee and Pearson (2000)
argued, with supporting empirical evidence from 421 senior level Indian
managers, that many of the traditional Indian values (respect for seniority,
status and group affiliation) have been complemented by newer areas of
attention that are more usually linked to globalisation, such as work quality,
customer service and innovation. The most important work related attribute
of the study was the opportunity to learn new things at work. Such cross
verging trends need to be understood more widely as practitioners face a
new reality of human resource development of post industrial economic
organisations.
The other three spheres, of Figure 2, namely the emotional, the socio
cultural and the managerial domains are undergoing, similar profound
changes. For instance, the socio cultural sphere confronts the dialects of the
national macro level reform agenda as well as the challenge of innovating by
addressing the hygiene and motivational features of the work place.
Consequently, this sphere, which is underpinned by the anchors of Sradha
and Sneha, has the opportunity to leverage work setting creativity in
dimensions of autonomy, empowerment, multiskilling and various types of
job design. And the emotional sphere, which focuses on creativity and
innovation to encapsulate the notions of workplace commitment and
collaboration as well as favourable teamwork, brings desirable behavioural
elements of transparency and integrity into organisational procedures and
practices. The managerial sphere provides the mechanisms for shifting
mindsets, for in Indian organisations HRM is viewed to be closely aligned
with managerial technical competency. Thus, understanding of the relativity
of HRM to strategic intended organisational performance is less well
articulated in Indian firms. The current emphasis of reconfiguring cadres
(voluntary and nonvoluntary redundancy schemes), downsizing, delayering
and similar arrangements will become less relevant as holistic perspectives
gain ground. A hallmark of future Indian workplaces is likely to be a
dominant emphasis on managerial training, structural redesign and
reframing of institutional architectures to achieve enterprise excellence.
Thus, a primary role of Indian managers will be to forge new employment
and industrial relationships through purposeful HRM policies and practices.
In Figure 3 is presented a variety of HRM practices that are being employed
in Indian organisations.
Figure 3
Key HRM Practices in Indian Organisations
HRM Practice Observable Features
Percentage of employees with formally defined work roles is very high in the
Job Description
public sector.
Strong dependence on formal labour market. Direct recruitment from
institutions of higher learning is very common amongst management,
Recruitment engineering and similar professional cadres. Amongst other vehicles,
placement agencies, internet and print media are the most popular medium
for recruitment.
Strong emphasis on security and lifetime employment in public sector
Compensation including a range of facilities like, healthcare, housing and schooling for
children.
Training and Poorly institutionalised in Indian organisations. Popularity of training
Development programmes and their effect in skill and value development undeveloped.
Performance A very low coverage of employees under formal performance appraisal and
Appraisal rewards or organisational goals
Promotion and Moderately variable across industries. Seniority systems still dominate the
Figure 3
Key HRM Practices in Indian Organisations
HRM Practice Observable Features
public sector enterprises. Use of merit and performance limited mostly to
Reward
globally orientated industries.
Limited in scope. The seniority based escalator system in the public sector
provides stability and progression in career. Widespread use of voluntary
Career Planning
retirement scheme in public sector by high performing staff. Cross functional
career paths uncommon.
Driven by proactive court rulings, ILO guidelines and legislature provisions.
Gender Equity
Lack of strategic and inclusion vision spread.
The central government has fixed 15 per cent reservations for scheduled
Reservation
castes, 7.5 per cent for scheduled tribes and 27 per cent for backward
System
communities. States vary in their reservation systems.
IR Challenge
The Indian IR system has two main features. First, is the absence of the
provision to recognise a union as a representative or agent for collective
bargaining. Second, is the total dominance of government in regulating the
industrial relations (IR) domain. Though it is relatively easy for members of
a work organisation to be registered as a union under the law, it does not
lead to the legal recognition by the employer in dispute resolution or
bargaining process. This contention was made by Kuruvilla (1996) over a
decade ago.
In terms of collective bargaining, industry wide bargaining occurs in certain
industries where the employers are organized, but bargaining otherwise is
decentralised to enterprise level. Although there are no restrictions on the
subjects of bargaining, the Industrial Disputes Act of 1947 restricts the
ability of employers to lay off or retrench employees or to close business.
(p.635).
Indian industrial relations have evolved from political roots and labour
market demands. An unique feature of Indian IR has been the dominance of
political parties sponsoring unions. Union membership has been the most
popular breeding ground for politicians, and political leaders have enjoyed
the use of union platforms. Such politicisation has generated conflicts and
rivalry creating mayhem and the hurting of labour interest. Nevertheless, in
spite of wage determination by central government boards, and ad hoc
industrial awards, enterprise level bargaining has yielded positive outcomes.
Interestingly, during the 1970s in a period of the highest number of strikes,
the registered number of unions grew fivefold. But a decade later profound
economic and political reform movement saw a new direction in the trade
union movement. A section of scholarly trade union leaders began to
incorporate new global thinking in the union outlook.
Since the 1980s, the Indian industrial relations culture has been
considerably impacted by the intensification of globalised markets. During
this time and beyond, there has been a clear departure from traditional
personnel management. The shift has not only been in the general tone, but
in the substantive visions. Adjustment to the global imperatives of an
emerging service sector, sunrise industries, and demographic shifts in
competencies has given rise to new thinking. In spite of most of the Indian
labour laws being entrenched in a world view that is very different to the
current realities, and the obvious urgency for them to be updated to
incorporate more flexible, competitive work systems, the built in rigidities
are still proving a formidable obstacle.
The most alarming issue in the HR and IR context is the lack of job
opportunities outside urban areas where more than 70 per cent of the
population lives. As has been pointed out by Meredith (2007).
While Indian university graduates line up for jobs that can propel them into
newly vibrant middle class, per India’s rural and urban poor, change has
been interminably delayed. Expectations, like incomes, are rising across
India, and not just for those working in call centres. Even as the New India
cohort thrives, much of the rest of India is making much slower gains or
even being left behind, creating social and political tensions that cloud
India’s impressive strides forward. The lowest paid workers in the off
shoring industry those working in the call centres earn median wages of
$275 a month. But most Indians still earn less than $60 a month or just $2 a
day. (p.125).
• A choice of working in
over 170 offices across
40 countries in a
• Significant
Tata variety of areas.
Consulting impact on
Services(TCS) • Paternity leave for job hopping
adoption of a girl child achieved
• Discounts on group
parties
• ‘Wings Within’
programme where
• Has led to a
existing employees get
WIPRO higher
a chance to quit their
retention
current job role and
rate
join a different firm
within WIPRO
• Fostering a sense of
belongingness, creative
artistic and social
activities for the • Moderate
employees and their Retentions
INFOSYS
families. rate increase
• Initiating one of the achieved
best ‘corporate
universities’ in the
world
Microsoft-
India • Excellent sporting and • Struggling
Figure 4
Examples of Retention Strategies for young Professionals in India’s BPO and
Services Sectors
Name of the
Retention Strategy Impact
Company
wellness facilities
• Employees allowed to
choose flexible working
schedule
to minimise
• Moving people across job hopping
functions and sections
in assisting employees
find their area of
interest
• Culture change
valuing innovation and
talent over age and
experience
• Stabilised
Mahindra & Co • Institutionalising a
job hopping
practice called ‘reverse
significantly
mentoring’ where
young people are given
opportunities of
mentoring their seniors
CONCLUSION
The World Competitiveness Report rated India’s human resource
capabilities as being comparatively weaker than most Asian nations. The
recognition of world class human resource capability as being pivotal to
global success has changed Indian HRM cultures in recent years. While the
historical and traditional roots remain deeply embedded in the subjective
world of managers, emphasis on objective global concepts and practices are
becoming more common. 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). As the Indian economy becomes more
globally linked, all three perspectives will move increasingly towards a cross
verging strengthening. Interestingly, within the national context, India itself
is not a homogenous entity. Regional variations in terms of industry size,
provincial business culture, and political issues play very relevant roles. The
nature of hierarchy, status, authority, responsibility and similar other
concepts vary widely across the nations synerging system maintenance.
Indeed, organisational performance and personal success are critical in the
new era.
AUTHOR
Samir Chatterjee is professor of International Management at Curtin
University of Technology in Australia. He has been involved in university
teaching, research, corporate consulting and advisory role with UN, ADB
and many other scholarly activities in the Asian region for over 35 years. He
has authored and co-authored eight books, 22 book chapters and over 150
refereed journal and conference papers. He is currently the President of the
Society for Global Business and Economic Development.
Email: samir.chatterjee@cbs.curtin.edu.au
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