Unit2:HRMinIndia Structure:

2.1 Introduction Objectives 2.2 HRMinIndia SAQs 2.3 HumanRelationsMovement SAQs 2.4 2.5 2.6 2.7 ScopeofHRinIndia Summary TQs Answersto SAQsandTQs

2.1Introduction The Indian story for organizational success is one that is deeply rooted in its history and culture.TheIndianvaluesystemrichwithrespectforelders,jointfamilysystem,savingfor the future and the British rule along with the freedom struggle have strongly impacted the shapingoftheIndianworkplace.Thelargelyagrarian natureofthecountrys wealthbuilds hardwork,dignityforlabourandsharedresponsibilityaskeycomponentsofthesuccessof the Indian firm even today. The role of the countrys democratic governance framework enabled policy makers and the financial institutions to set the stage for Indias success. Leading from the front has been the unparallel investment made by the government in the area of education and the control of population. This together with the assistance from the developedcountryhelpedthecountrycreateitsownvaluepropositionglobally.Uniqueinits strengths and its weaknesses India today is identified as among the leading emerging economic in the world sharing space with larger countries (both in size and scope) like Russia,ChinaandBrazil.Indiacontinuestoclimbthecurveofsuccessevenafter60yearsof independence,withsymbiotictraderelationswithalmosteveryothercountryintheworld.

Objective: HistoryofIndianconceptsinHRM

 Howisituniquefromtherestoftheworld

2.2HRM inIndia AsitstandstodaytheIndianorganizationcouldnothavehopedformore.Viewedfromthe globalperspective,inadditiontobeingstrategicallypositionedonthecorporateworldmapas a lowcost, highly skilled destination, the Indian corporate is emerging as a base for committed and intelligent and a very knowledgeable workforce. This has been achieved by the help of a strong foundation provided by the Indian education system at the primary, secondary and the technical as well as professional level. It is undisputed that the Indian InstituteofTechnology,theNationalInstituteofTechnologyandthefamedIndiaInstituteof Management are among the worldclass institutions to talk about. Quality education and research are encouraged on these campuses and across the country, which mould and contributetothepracticesinIndianorganizations. The HRMpractices inIndianorganizationsareby nodoubtunique.Theculturalimpacton thehiringpractices,compensationstandards,benefitsandstatutorygovernance,performance linkedrewardsandpayoutsandthegeneraldaytodaymanagementpracticesthoughinstep with international HRM practices have a flavour their own. We will discuss a few distinct differentiatorsthatmakeIndiaHRMdifferentfromglobalHRMtrendsandpatterns: TheIndiancultureisonethatisdeeplyrootedinitssocietalandcollectivisticvalues providingforanaturalurgetocollaborateattheworkplace,workinteamsandgroups andachieve. Thediversitythat isseen inthe Indiansociety w.r.t.diversereligions andstates are reflectedintheabilityoftheIndianandthe Indian corporatetotoleratediversityof thinkingandworkingtogetherwithoutinhibitions Workculturewise,thehardwork,longworkinghours,perseveranceandtheneedto earnmoneyimpacttheHRMpolicies Availabilityofaeducatedmassofdifferentcalibreofknowledgeandskillallowsthe countrytoundertakedifferentnatureofworkbeginningwithlowerskilledactivities suchasBPOs(BusinessProcessOutsourcing)andmovingupthevaluecurvetofar moreadvancedactivitiesasKPOs(KnowledgeProcessOutsourcing). Compensation costs as still a competitive advantage for India makingit a preferred businesslocationtheworldover.

 Currenttrendintheoverpopulatedurbanpartofthecountryarequicklyfadingoutto tire2andtire3citiesandtownwherethecostof livingandwage levelsare notas competitive,furtherexpandingtheIndianresourcebaseforhiringandbuildingtalent, contributingtotheoverallgainofthecountry. HRM in India however is not structurally wellresearched and hence a lack of theoretical information to track and document its progress, unlike in the emerged countries likes the USAandtheUK.Researchis yetatitsinfancyinIndiaandthereisalotofdependenceon theemergedcountriesinemulatingbestpracticesinthewaypeoplearehiredandmanaged. TodaytheorganizationsofIndianorigin havetheiruniqueHRstrategiesthatworkbestfor them. Work more and earn more is a common and accepted philosophy at the Indian workplace. Work is respected and revered and almost worshipped in Indian organizations. Benefits are basic yet equitable and adequate. There is a high focus on cash in hand as opposedtobenefitsandperks. Ourstatutoryandlegalframeworks,asaresult,arealotmoreliberalandlessrestrictiveas compared to the emerged countries. An open society drives openness at the workplace and hypocrisyislargelydiscouraged,leadingtowellstructuredpoliciesandprocessesthatdrive workplacebehaviour. Diversity for India isa challenge very different from its existence in the rest of the world. Diversity initiatives in India drive gender diversity and disability diversityawareness. SelfAssessmentQuestionsI 1. InIndiadiversityisaconcernbecauseweareveryconservativeandaclosed society(True/False) 2. Indiaisgainingimportancebecauseofthequalityaswellasthecheapcostof living(True/False) 3. Ourlegalframeworkisveryadvanced,allowingforforeigncompaniestowork easilyinIndia(True/False)

2.3HumanRelationsMovement

Kautilyaprovidesasystematictreatmentofmanagementofhumanresourcesasearlyas4th centuryB.C.inhistreatisetitled"ArthaShastra".Asithasbeendescribedinthebook,there prevailedlogicalproceduresandprinciplesinrespectoflabourorganizationssuchasShreni orguildsystemandcooperativesector.Thewageswerepaidstrictlyintermsofquantityand qualityofworkturnedoutandpunishmentwereimposedforunnecessarilydelayingthework orspoilingit.TheGovernmentusedtotakeactiveinterestintheoperationofbothpublicand private sector enterprises and provided wellenunciated procedures to regulate employer employee relationship. Kautilya provides an excellent discussion on staffing and personnel management embracing job descriptions, qualifications for jobs, selection procedure, executive development, incentive systems (Sarasa saama daana bheda danda catura or Carrot and Stick approach) and performance evaluation. We find several indications of prevalence of guild system involving performance of work at the residence of the entrepreneursthemselves.Incourseoftime,theguildsystemwasfollowedbycooperative sector consisting of craftsmen and traders, and purporting to promote their professional interests.Indeed,numerousprofessionalsocietieswereformedontheselineswiththeirown systematic procedures and policies to nurture their own interests. Again, there are several indicationsregardingtheoperationofprinciplesofthedivisionoflabour. Theconceptof"Varnashram"orcastesystemwasoriginallybasedontheseprinciples.The individuals who used to earn their livelihood by engaging themselves in activities such as teaching,sacrificeorstatemanagementweredesignatedasBrahminswhilethosespecialising in fightingweretermedasKshatriyas.Moreover,individualsengagedintheareasoftrade, businessandagriculturewerecalledVaishyasandthosedevotingthemselvesinmanualwork were known as Shudras. Later on, these professions emerged to be hereditary which facilitated the transfer of skills and training from one generation to another. Numerous professions based on such specialised transfer of skills became hereditary including goldsmiths, weavers, potters, blacksmiths, carpenters, hunters, charioteers, snake charmers, architects, sculptors, armourers and turned out to be separate communities by themselves. From the 14th century B.C. to the later half of the 10th century A.D., the relationships betweentheemployerandemployeesweremarkedbyjusticeandequity. As regards Indian economy in Mediaeval India, although there was a lull because of numerousforeignaggressionsforaround700years,duringtheMughalrules,theIndiantrade andcommercewererevived.Several"Karkhanas"wereestablishedatAgra,Delhi,Lahore, Ahmedabad and various other places. However, majority of the artisans and the craftsmen

were extremely poor and lived on starvation level. Therefore, it was not startling that the productivityofworkerswasvery low.Presumably, lowwages,climateconditionsandpoor physiquewerethemajorfactorsresponsibleforit.DuringearlyBritishrules,thereprevailed a laissezfaire policy towards the business. As it is evidenced in the report of the Indigo Commission,theworkingconditionswereappalling,livingconditionsweresubhumanand several abuses prevailed in indigo plantations. Again, as regards tea plantation, we come across several inhuman cruelties caused to the workers. Even the Plantation Act of 1863 makesprovisionsthatiftheworkersfailedtocompletetheirperiodofcontract,theyshould beimprisonedforaperiodnotexceedingthreemonths.Explicitly,theworkingconditionsin the tea plantations were extremely bad. The labourers who attempted to run away were subjecttoimprisonment,whippingandalliedextremepunishment.Accordingly,theworkers wereentirelyhelplessinthefaceoftheorganizedandpowerfulEuropeanplanters. TheaboveconditionsprevailedtilltheenactmentoftheFactoryActof1881.According to the Act,theworkersemployedinthefactorieswereallowedaweekoffdayandprovisionswere alsomadeforinspectionaswellaslimitingthehoursofworkforwomenworkerstoeleven perday.Theactfurtherprovidedthattheminimumageofchildrenforemploymentshouldbe sevenyearsandthatthemaximumworkinghoursforthemshouldnot exceedsevenhoursaday andthattoointhedayshift.In1890,thefirstlabourorganizationdesignatedasBombayMill HandsAssociationwasestablished.Subsequently,in1905,theprinters'UnionatCalcuttaand in1907,thePostalUnionatBombaywereestablished. TheMadrasLabourUnion was organized thereafter in 1918.In 1922,the indentured labour systeminvolvingmigrationofIndianlabourtoothercountriesoncontractbasiswasabolished asaresultofastrongNationalMovement.Inthesame year,theCentralLabourBoardwas establishedtofederatethedifferentunionsintheBombaycityandtheAllIndiaTradeUnion Congresswasorganized.Itmaybenotedthatthereliablestatisticsoftradeuniongrowthare notavailablefortheperiodbeforetheformal implementationoftheIndianTradeUnionsAct, 1926, a landmark in the history of industrial relations in this country. The early thirties witnessed a highlyweakened trade union movement. However, the conditions prevailing five yearsbefore aswellasduringtheSecondWorldWar,wereconducivetotherapidgrowth of the trade unionism. Between 193940 and 194445 the number of registered trade unions increasedfrom666to865(i.e.,by29.7percent)andthetotalmembershipofunionsubmitting returns increased from 511, 134 to 889, 388 (i.e., by 70.4 percent). There was a large scale expansion of the trade union movement after the Second World War especially after the

independence.AsSubramanianobserves,thereexistedfourfoldreasonsforthisrapidgrowth. These were as follows: (1) the cumulative impact of the acute economic distress stemming from war conditions and the removal of the wartime restrictions on strikes, (2) the developmentofthree more central labourorganizations and the competition among them, (3) the labour policy of the Government based onadjudication rather thancollective bargaining, and(4)the growthofthe spiritoftradeunionismamongtheworkers.Accordingly,during the period 19471960 while, industrial employment rose by 2.8 times, the total claimed union membership also went up by 2.3 times. In 1960, 45 percent of the total industrial workforce was claimed to be unionised. Today, the total membership is estimated to be around4.3millioni.e.,28percentoftotal workforce. Explicitly, during postindependence period, the activities of Personnel Department in differentpublicandprivatesectorshavemultiplied.Accordingtotheprovisionsofsection49 of the Factories Act, 1948, it became obligatory for theemployers to employ a Welfare Officerinafactoryemploying500ormoreworkers.Likewise,section58oftheMinesAct, 1952, empowers the Government to specify employment of welfare officer/officers. However,itdoesnotmeanthatthefunctionsofPersonnelDepartmentareentirelylimitedto welfareactivities. Managementofhumanresourcesisbeingregardedasaspecializedprofessionsuchasthatof medicine and law. In addition to the industrial relations functions(although sometimes the industrialrelationsformsaseparatedepartment),thePersonnelDepartmentisresponsiblefor othervariedfunctionsincludingemployment,safety,training,wageandsalaryadministration andresearchanddevelopment.TheHeadofthePersonnelDepartmentisassociatedwithtop management and helps it in the formulation of personnel policies for the company. Indeed, the activities involved in Personnel Department are akin to those performed in this departmentinanyotherwesterncountries. Specially,wherethepersonnel& industrialrelationsandwelfarefunctionsarecombinedin one department, we obtain three categories of activities relating to these functions. Firstly, although the Personnel Manager is a staff, he is responsible for the management of a department.Thus,he hastoperformseveraldutiesalikethoseof linemanagers in hisown department.Accordingly,hehastoorganize,planandcontroltheactivitiesofhisdepartment involvingrecruitment,selectionandplacementofpersonsandtheirtraining,leadershipand motivation.Hisabilityliesingettingresultsthroughthepeopleinhisdepartment.Thus,heis a manager first and a personnel expert subsequently. Secondly, he performs a series of

technical services and allied activities. Thus, he is responsible for industrial relations activitiesincludingcontractnegotiations,grievancehandling,preparationandpresentationof arbitrationcases,researchinlabourrelations,etc.Moreover,heisresponsibleforeducational activities including employees training, supervisory training, organization planning and management, development, communication programmes and so on. Furthermore, he is responsibleforwageandsalaryadministration involvingpreparationofjobdescription,job evaluation, incentive and profit sharing systems, executive compensation, etc. Again, his responsibilities embrace employment activities such as recruiting, psychological testing, medicalexaminationinterviewingcandidates,employeerecordkeepingetc.Lastbutnotthe least,thePersonnelManagerisresponsiblefortechnicalservicessuchashealthandwelfare measures involving safety measures, recreational measures, and soon. However, personnel counseling has been largely neglected in most of the Indian enterprises. This gives rise to severalgrievancesandlowerstheefficiencyoftheworkers. Thirdly,thePersonnelManager'sresponsibilitiesrelatetohisadvisoryrole.Usually, hehas toadvisethelineandtopmanagementinrespectoflegalmattersregardingtheissuessuchas termination of services, transfer, etc., human relations problems confronting the line managersandtechnicalproceduresinareassuchaswagesandsalaryadministration.Insome instances, the Personnel Manager is required to advise management regarding the improvement of human climate in the organization, social responsibilities of the enterprise, etc. SelfAssessmentQuestionsII 1. Kautilya provides a systematic treatment of management of human resources as earlyas4thcenturyB.C.inhistreatisetitled. 2. From the 14th century B.C. to the later half of the 10th century A.D., the relationshipsbetweentheemployerandemployeesweremarkedby... 3. In"Varnashram"orcastesystem,thosedevotingthemselvesinmanualworkwere 2.4ScopeofHRinIndia knownas... 4. DuringearlyBritishrule,thereprevaileda..policytowardsthebusiness. Contrarytotheseforces,inIndiatheownermanagerisstillthepractice.Professionalmanagers are not yet important. Instead of decentralisation and delegation, there is the pattern of dependency. The culture is highly authoritarian in character. The child is brought up to be dependentonparentsandsuperiors.Theentrepreneursoperateinasecure,shelteredmarketand hardlyfacechallenges.Forlackofjobopportunities,theworkerscannotanddonothaveany

sayintheirjobsorworkingconditions.Finally,thetradeunionsareweakandpoliticised,and collective bargaining, which could encourage participation, is rather absent. Hence, human relations movement in India has not been developed to the extent available in the U.S.A. A professorhassuggestedanactionprogramme,todevelop"humanrelations."Hesays,"Human relations should emphasise'communication' as amajor functionof management." He further observes,"ThoughHumanRelationsisnotexhaustedingoodcommunicationsystem,thelatter isthesinequanonforsoundprogrammeofHumanRelationsinIndia.Itgoeswithoutsaying thatcommunicationheremeansnotonlytheefficientsendingandreceivingofmessagesbut also includes sensitivity to the understanding of feelings, attitudes and cognitions of the subordinate, in fact, it embraces the whole realm of interpersonal relationship in the organization." Today there is enhanced awareness on the need for research based HRM practices,andthereisalotofworkhappeningintheIndianeducationsystemtopromotethis buttheIndiancorporatewiththeirheavydependenceonthemultinationpracticeshavelittle timetodevotetocontributingtothiscause,blindlyemulatingthewest. SelfAssessmentQuestionsIII 1. Thecultureishighly __________________incharacter. 2. Forlackof_________________,theworkerscannotanddonothaveanysayin theirjobsorworkingconditions. 3. ___________________ heremeansnotonlytheefficientsendingandreceiving of messages but also includes sensitivity to the understanding of feelings, attitudesand cognitionsofthesubordinate.

2.5.Summary: HRM in India has been impacted both by its own history as well as multinational companiesthatcameandestablishedtheiroperationsinthecountry The countrys culture has played a critical role in building value for the country globally The caste system and the way it was structured to differentiate between different categoriesof jobsremainsabasic framework forthewaywork isdistributedatthe workplace The coming of the British to India and their administrations brought immense

insightsintothecountryonhowtomanagelabourandwork Italsogaverisetothetradeunionsandworkplaceequalityissues The impact of the World War I and II made their own impact on the Indian organizations The early days of structured HRM activities were largely hygiene related and focusedonthePersonnelmanagementprinciples. Human Resources management as it is practiced today is a outcome of the cultural(local)aswellastheglobalMNCpolicies 2.6. TerminalQuestions 1. Enumerate the growth of Human Resources Management in India and itsimpactonIndia'sethos. 2. HowdidtheIndiacultureimpactworkplaceHRpractices? 3. HowaretheearlyHRMchallengesdifferentfromthatofthecurrent? 2.7.AnswerstoSAQsandTQs: SelfAssessmentQuestionsI 1False,2 True,3False SelfAssessmentQuestionsII 1ArthaShastra,2 byjusticeandequity 3.Shudras,4laissezfaire,51918 SelfAssessmentQuestionsIII 1 Authoritarian,2 jobopportunities,3 Communication

AnswerstoTQs 1. Referto2.3 2. Referto2.2 3. Referto2.4