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The dynamics of change, the globalization, followed by liberation had increased the threat of potential entrants, the bargaining power of the buyer and mostly raised the fierce intensity of competition. In the business environment of the developed world HRD is a buzzword. In developing countries like India also are encouraging employee to enhance productivity by adopting HRM philosophy, which is becoming a key national concern. Industrial Relation constitute one of the most delicate and complex problem of modern industrial society. With growing prosperity and raising wages, workers have gained higher living wages, more education, sophistication and generally, greater mobility. The working organization in which they are employed have become larger and shifted from individual to corporate ownership. Employees have their unions and employers their bargaining associations to give tough fight to each other and establish their powers. The govt. has played a growing role in industrial relations, in part by becoming the employer of million of workers and in part by regulating the working conditions in private employment. The creation of maintenance of good relation between the workers and the management is the very basis on which the development of industrial democracy depends. It, in turn, seeks to gain co-operation of the two partners in industry in the field of production and promotes industrial peace. The healthy and orderly


industrial relations in an enterprise generate attitudes, which procreate progress and stabilize democratic institutions.

Theoretical knowledge without practical application is

incomplete. Therefore, the exposure to practical world gives a new dimension to whatever has been grasped till time and it also gives a change to understand that where the learned knowledge can be applied. I would like to express my heartfelt thanks to my project guide Ms. Shubhi Ghosh. This study would not been possible without her guidance and support. I would also like to thanks all the magnificent people who I interviewed, I have learnt immensely while it is not possible to name them individually. I would like to express a deep sense of gratitude toward them.






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he dynamics of change, the globalization, followed by liberation had increased the threat of potential entrants, the bargaining power of the mostly raised the fierce intensity of competition. The

buyer and

organization need to increase their strength to stay in the competition or to increase their competitive advantage or in other words organization need to increase their economic value through economy of scale in production and marketing. In the business environment of the developed world HRD is a buzzword. In developing countries like India also are encouraging employee to enhance productivity by adopting HRM philosophy, which is becoming a key national concern. HRD is viewed as nurturing a culture of higher productivity, industrial growth and help in their competence. In the Indian scenario HRM is developing fast for many reasons. Most of the companys are resorting to modern HR practice. HRD means improving effectiveness in the terms of better productivity, cost reduction, better generation of internal resources, better profit and better customer service and not end in itself. Industrial Relation constitute one of the most delicate and complex problem of modern industrial society. With growing prosperity and raising wages workers have gained higher living wages, more education, sophistication and generally, greater mobility. The working organization in which they are employed have become larger and shifted from individual to corporate ownership. There also exist progressive-achieved, status dominated, secondary group oriented,

universalistic and aspirant sophisticated class in the urban areas. Employees have their unions and employers their bargaining associations to give tough fight to each other and establish their powers. The govt. has played a growing role in industrial relations, in part by becoming the employer of million of workers and in part by regulating the working conditions in private employment. Besides, rapid changes have taken place in the techniques and methods of production. Technological advances have eliminated longestablished jobs and have crested opportunities and require different patterns of experience and education. Non-fulfillment of many demands of the workers has brought industrial unrest. They are the points flexion and the base of industrial edifice. The creation of maintenance of good relation between the workers and the management is the very basis on which the development of industrial democracy depends. It, in turn, seeks to gain co-operation of the two partners in industry in the field of production and promotes industrial peace. The healthy and orderly industrial relations in an enterprise generate attitudes, which procreate progress and stabilize democratic institutions.


Organization built its strength and competitiveness through three basic characteristics, which are called Ms, they are man, machine and material. It is human resources that runs the process, serve and satisfies the customers and ultimately helps the organization to built and increase the loyal customer base. Hence managing people is the key to organizational success. Hence the purpose of our study is to assess and analyze the impact of HR practice in organizational performance. The prevailing HR practices are recruitment and selection, training and development and performance appraisal. The strategic HR practice needs to be integrated with the organizational goal for successful working of the organization. The integration of strategic HR is well documented and sited by various researchers and exponents. In fact the integrations of HR practice with organization business strategy is also discuss to a limited extent in the contemporary literature. The integration of strategic HR practices and the organizational goal is dependent on a number of factors which if present may help organization to be successful. Through effective HR practice the organizations motivates their employees, where by employees build high moral, increase their commitment, develop competence and ultimately that result in increased productivity. And increased productivity is just another name for increased competitiveness in term of superior performance.


Primary Objective:

To assess and analyse the impact of the strategic HR practices on organizational performances with special reference to the practices in the Indian Automobile industry.

Secondary Objective:
To understand and identify the core HR practices prevailed in the industry. To understand how the integration of strategic HR practices with organizational goal is successful in motivating the employees and generating better performance. To study the industrial relations policy& process prevailing in Indian Automobile Industry. To study the strategic and techniques applied to improve industrial relations.

Research Questions:

What are the implications of HR practices and why forms conductive HR strategic?



To find out the fact responsible for successful integration of strategic HR practice and organizational goals.

3. Do the practices really motivate the employees to perform according the goal set by the organization or do they have their own objective?

The strategic HR practice Recruitment & Selection
Swami (1985) defined recruitment as the process of searching for prospective employees and selecting them to apply for the job in the organization. He concluded that it is often termed as positive in that its objective is to increase the selection ratio that is the number of applicants per job opening. Hiring through selection is negative, in that it attempts to eliminate applicants, leaving only the best to be placed in the firm. Pfeffer and J (1995) rightly pointed out that, for an organization to be global and to reach the demand of fluctuating economy, it has to insure that it has selected the right personnel in the first place. They stated that the sources of recruitment could either be internal relating to the existing working force of an enterprise promotion, transfer, data bank etc. or external source relating to employment exchange, advertisement, colleges, institute etc. Srivastva (1997) stated that selection means rejection of candidates for a position and it is consider as a negative process. On the other hand, placement is viewed as positive process involving filling position with the most suitable candidates. Selection standard and personnel qualities of a candidate determine whether or not he is to be placed on a job. Selection standard are adjusted to the needs of the organization and labour market situation. Several researches have shown that pairing specifically practices that have similar objectives. HR practices together is more effective than implementing more than at a time,

Milgrom and Roberts (1990) throw attention on certain HRM practices like recruitment and selection that mostly can be classified as high performance practices within any business sector. In people intense industry like automobile, the practices of like recruitment plays very crucial role in determining the future success of the organization.

Training and Development

Andrews (1999) stated that training is a systematic modification of behaviour through learning, development and planed experience. Training needs exist when there is gap between the present performance of employee or a group of employees and the desired performance. The existence of this gap can be determined on the basis of skill analysis having five steps: Analysis and determination of the major requirements of the specific job, identification of the task needed to be accomplished to meet the job requirements, understanding the procedure needed to accomplish each of the job requirements, analysis of the knowledge and skill needed to accomplish the procedure and identification of any special problem of the job and analysis of any practical skill needed to meet the problem. Thus the most talked about issue of the organization is that, how its so prominent in maintaining its standard as well as giving side-by-side significance to manpower planning? Today most of the organization have come forth and given clear indication of using the practices and policies of human resource management efficiently. So now each and every organization has given way of including other deportment so that it looks after the company as a whole as well as also helps in gaining immense productivity and performance over the year. This is when the total works on a very effective platform of personnel management; that is training and development.

Reid et. al. (1993) stated that training is necessary with the organization because it helps in gaining maximum performance from its employees at all levels. It can also be explained in terms of To develop human potential to assist organizations and individual to achieve their objectives. For manager to start a training programme, certain conditions are laid, which is normally seeing the climate of the work environment, management style, influences of other organizations, as well as also looking at how qualified the manager is in carrying out the training programme. For company to begin with a training session it needs to have an outlook of it that can be seen in the figure shown below:

Identify Training Need Evaluate Training Outcome Plan and Design Training

Deliver Training

Source: NIS Training Manual, 2009 Learning organizations, constantly upgrades its professional,

technical and behavioral skills. The training division used to undertakes adequate measures to identify the training needs of employees within specific divisions.

Training programmes are mostly done to keep the position of the organization in the global market, as well as help in reducing employees turnover. Today most of the organization has seriously taken the need to have training packages for their employees as well as incorporating the immediate need to have employee development. This is mostly done to allow the staff member to improve on their skills as well as making them effective means of production, also to recruit the new candidates who are appropriate for their particular position and providing them with certain company information that are unknown about. Training though is very expensive and time consuming. These programmes are mainly done on early basis, just when the organization is looking out for new recruit and better prospects for any organization. The training and development programme is done using different methods. Within the organization, general manager of any unit takes the task of designing effective training programmes for individual or for an entire team as a whole. Some time these managers are also given some short of training for themselves in turn to train the individuals who are participating within the package. This is done more so because all managers are not best trainers and though all over qualified and experienced dont possess all the traits required when conducting the programme. As these managers for example have the over all responsibilities of the operation of the company, that is taking care of dcor, expenditure done, house keeping services, establishing expected standard for guest services etc, which also means that because they are taking care of all these service that they do not have time to spare but even then make time from their busy schedule with due respect with the guide lines given by the management to take charge of the training and development sessions. Which then means manager need to have certain traits while dealing with the candidates, which is patience, good

presentation skills, excellent communication as well as having good understanding with them. Only after these characteristics are found in the trainer the actual procedure of training and development starts .This is basically done in view of feedbacks given by the customers who have visited the company before, or checking on certain deportment with in the organization that require tremendous changes within the forthcoming annual period. These sessions are either done in classroom within the company, or with the tool of video tapes, or outsides speakers who have great experienced in the field are called to give presentation or with the help of supervisor who is allotted the task of monitoring a certain number of individuals in a group who is taking part in. All most all organization prefer to have training session for members who are put in to groups as this leads to effective group discussion, generate team building skill with in member involved, also save time and make the completion of programme much more quicker and faster. Mostly these training programmes take place within a week or go as long as a month depending on how much has been gasped and interpreted by the employees involved. Ivonson (1989) revel that the major organization like MUL and Hero Honda have come about with certain methods of working on the issue of training and development. The management of this organizations has come about with certain feature such as having group discussion, secondly the assigned candidate is given a particular situation to handle and then to play out the entire scenario to the fellow candidates, the other method is using a case study where a real life documentary is shown, the individuals have to analyse it and find solutions to the problem of the documentary. The type of training done could be called as On the job training which takes place out of the work environment and even outside from the place

of residence of the employees. Its a good way of creating self esteem, and building motivation within the trainee, also that each and every trainee is provided with special attention while performing the given task and it also helps the trainer to focus on specific problematic areas which prove to be an obstacle in delivering the best performance by the respective candidate. Robinson (1981) explained that the fallowing two specific types are important but when put to use both of them have their own consequences. One is skill training and other is cross training. Skill training- But in contrast to the above view of many organizations, there was a recent stuffy done by Gould Williams suggesting that there are some organizations that only pay attention on investing in skill training rather than any other short of training, this was seen in organization like Honda SIEL and MUL etc. Bittel (1981) Suggested that Training and development must be viewed in the development of soft and hard skill so that employees form the basis of a knowledgeable organization. As soft skill training is seen as a vital to impart knowledge to personnel who have supervisory function in the provision of leadership. Like wise organization also feel the need of having different type of skill training and development such as, multi skill training for their employees as it allow its staff members to get accustomed to different type of work operations taking place within the organization and earn different skills of abstract reasoning, creativity, administration, personnel management etc. When employees gain this type of training they are promoted to work in different deportments within the organization, so that they can come in contact with other member of staff, that is managerial as well as non managerial staff and also are


compensated with a factor they dont face boredom or in working in the same unit of the organization for years. Storey (1991) Stated that cross - training is used for staff members who have had an over all low type of performance in the organization. Within the company, this type of training is used very rarely, as it some time not written in the companys annual training books. But it help the organizations in achieving the goal through better coordination and high morale, only recently TATA,MUL has conducted the cross training programme with the assistance of a group of trainer from Discovery of India. A more extended version of this type of training is job rotation. It is where the trainee is not looked as one but is assigned the task of the other job functions. Thus if cross training is put into practice with in the organization, it would directly prove to be beneficiary to the task holder of the organizations, that is the employees, management and the customers, which would lead to the fact that employee would gain additional advantage of career opportunities and future security due to business success. Williams (1999) argued that though these types of training are good they did not evoke maximum result for the organization, as in most of the situation the employees agree to go through these procedures for their own benefit and to earn extra wages, but on the other hand it can be an obstacle for those who are not promoted or given chance of going through these type of training and development programmes.











development is rarely beneficiary for those employees whose selfactuation levels are comparatively low. If done under the guidance of excellent leader can evoke good job satisfaction for employees. As well as from time to time employee will be able to enhance potential skills and also keep track of what are their strength and weakness when rendering their services to the organization as a whole. Even their commitment towards their supervisor or the service towards the managers increases. Again contradictory to this notion of employees motivation and development, many organization do not have training programmes, or even for that matter highly skilled staff bit even then are still able to raise their business and reach commercial marketing standards, this happens more so because the way management looks after the well being of its employees and promotes the need of having healthy environments for offering guest services.


Storey and Sisson (1993) revealed that key to the development of any organizing is growing performance. Different views have been noted in relation with the understanding of the word performance. Performance can be divided in to two parts, which is Performance Management that is none other than a wider link attached to the field of human resource management and which is directly connected to the employment relationship of the company as a whole. Torrington and Hall (1991) viewed performance as Performance Appraisal which is nothing but a tool if used in the correct way leads to employee motivation and job satisfaction as well as helps employees in


increasing performance levels of the company in an appropriate way. As a organization does a business transaction everyday, managers within the organization need to keeps records of the performance of the different departments within the organization company, as well as looking at contribution the contribution of each and every employee in achieving their set objectives for the company. Merricks and Jones (1986) revealed that for any industrial sector the main criteria looked upon is productivity. Productivity is nothing but a term relating to cost reduction which could also explained with the help of the given diagram. Productivity = Output/Input Input here refers to the amount of money spent on the resources, so that the stake holders of the organizations are able to provide the service as well as carry out operations for the organization, while on the other hand output refers to the over all amount spent in delivering these services or product for the organization . But within the field of human resources management it is quit evident the above two of pay and performance are directly linked to the productivity. Big organization like the Maruti as well as company like Ritz Carlton in the united State and Toyota group in Japan have come about with effective ways in which the organization can handle such a situation as well as productivity can be maintained. These companies use technique of keeping the record of the work done by the staff. Which is called Work Management this tool does not increase the productivity but helps bring about certain important changes within the work environment of the organization. This can be done in looking at the number of staff member joining the company over the span of the years, also looking at the pay

scale, whether it has changed or vice- versa has been the same for staff in the different section depending on what task they are assigned to. This is appropriately defined by the British standards institute as the application of the technique designed to establish the time for a quilted workers to carry out a specific job at a defined level of performance. This tool has various other method specified in it and is also used in other professional fields as well, they are estimating, Time study, Activity Sampling and Method Sampling. Out of these the most used technique is Estimating, which is done in the catering deportment of the organization, where employees are employed on the basis of a criteria which is looking at the sample size of the number of customers, also looking at the professional qualification, previous work experience as well as how the member of the staff deal with the management of the same sort of the operational activity within the organization. Thus looking at the todays scenario productivity is a crucial element of the management of any huge organization to maintain because low productivity leads to low profitability which means fall in all the various other features which are directly linked to it and maintaining the level of productivity means generating an effective work force with in the automobile industry. Most of the organization does fallow these practices. But the most important fact is the motivation of the employees. Motivated employees are committed to perform to their best of ability.

Integration of Strategic HR Practices


Kane And Palmer (1995) stated that strategic human resources management (HRM) lays emphasis on the importance of the HRM polices and practices being integrated by a long term HRM strategy, which is perceived as an integrated part of an organizational strategy. Their study showed that only one - third of a sample of Australian HR manager agreed that an HRM strategy had a great or modernly great impact on HRM within their organization, and there was no evidence that the impact of an HRM strategy resulted in a reduction of the direct impact of other factors. The more important factors that are included in authors study were legislation/ regulations, industry characteristics, organizational strategy and objectives, top management priorities, organization size and structure, and the impact of technical change. They believe that these factors impacted differently on HRM practices and polices in areas such as recruitment, training, pay/ benefit and industrial relations. Budhwar (2000) in his study concluded that monitoring the effectiveness of training immediately, communicating to employees through suggestion boxes and an attitude survey, not targeting recruitment of the long-term unemployed and being in turnaround life cycle stage of organization are the main variables which classify and discriminate between organization practicing high or low level of integration. Results show that along with contingent variables a number of organizational policies related to recruitment, training and development and employee communication also determine the function of integration and development. The analysis of content revel that U K managers have realized the importance of human resources and they see high practical value in integration in term of providing the quality of work, performance and achieving success in organizations. As a result, many U K organizations emphasize in their corporate policy the need to make HRM an integral part of the business


strategy. UK manager believe that integration helps them in the effective evaluation of business plans, highlights needs (both business and HRs) and makes the implementation of plans more effective and efficient. Othman (1995) revealed that the main feature of human resources management (HRM) is to lay emphasis on alignment of the organizations employee management practice with its strategy. It is argued that the strategy pursued by an organization need to be supported be compatible form of HRM practices and each strategy has to be supported by a specific form of HRM practice. He found that attainment of a strategy HRM fit is essential in insuring the optimum utilization of organizations human resources, which are supported to lead to improved performance. Buthwar and Sparrow (2002) examined the need of integration of human resources management (HRM) into the corporate strategy, development of firm to the line managers and the influence of national culture on HRM in a cross- national comparative context. The finding shows that even when there an apparent convergence of strategy e.g., the desire of both Indian and British personnel managers to increase integration between FIRM and business strategy, and to increase the level of development to the line managers, the two set of specialists clearly fallow a different logic of action, which is subjected to a different set of cross- cultural influences. The implications of pursuing apparently similar HRM solution in different cross- national context are considered. Guest (1992) argued that a coherent approach to human resource management policies can also lead, via the generic HRM outcome of strategic integration, commitment, flexibility/ adaptability of the work force and quality (all necessary ingredient when developing a competitive edge),


to the fallowing benefit to the organization which has adopted SHRM: high job performance; high problem solving, change and innovation; high cost effectiveness; and low turnover, absence, grievances. Karmi, et. al (1994) mention the notion, that people management can be a key source of sustained competitive advantage, call for the integration of Human Resource Management (HRM) and business strategy. HR is one of the key elements to the success of the firm performance and the HR involvement in the development and implementation of business strategy lead to organizational effectiveness in the industry. Devanna et. al. (1984) stated that the strategy and HRM relationship is basically an extension of Chandlers structure fallows strategy thesis. They argue that management theorists and practitioners have begun to realize the essence of human resources as they face the problem of strategy implementation. Because the integration of core strategic HR practices with the organizational strategies and objective can only be effective through the implementation of core HR practices like training and development, recruitment and selection and performance appraisal system. Each step of implementation should reflect goal congruence. Laurance Handy et. al. (1989) argued that as firms become increasingly aware that people are among their most valuable strategic assets, they are reappraising the way in which they manage their human capital. The emphasis is shifting from personnel management to the wider, strategic concept of human resource management (HRM) in which human resource policies and activities, including training and development, are linked more closely. Human resources specialists who wish to develop a


more strategic approach to people management must establish credibility with top management as key figures in achievement of successful results. Margaret Ryan (1995) explored the relation between specialist expertise and organizational decision making process. This relationship has been viewed as an issue in integration of HRM with corporate strategy, and as having implication for HRM concerns with organizational and career structure, employee development, flexibility and culture. The article suggests that the HRM function needs to comfort the challenges posed by expertise in the organizations social process. The importance of identifying and developing the knowledge base across the technical as well as the social system is advocated as having an impact on competitive position. The discussion is illustrated with example drawn from several companies in which the relationship of scientific knowledge to the decision- making process was being studied. Mikko Luma (2000) this article is a theoretical presentation of human resource development (HRD) with in the context of strategic management. It represents the single component view of human resources management (HRM) by concentrating on developing human assets only. According to this view, HRM is too complex and multidimensional an entity to be handled as a set of people- relation activities in relation to strategy. The article presents conceptions of strategic HRD based on earlier theory, and deduces three district logics, labeled as need-driven, opportunity-driven, and capability-driven approach to HRD. These approaches are summarized in an integrated framework which is suggested as an illustration of the full potential of HRDs contribution to the business. Accounts of organization adopting the approach are presented.









universalistic approach to examine the connection between HRM (in term of orientation of the function) and firm performance in Greek firms. To have in-depth knowledge of this issue, measures for various aspect of firm performance have been used, controlling for external environment, competitive strategy and organizational size. The research was to examine which dimension of the competing values framework (in term of orientation of the function) is linked to various aspect of firm performance, controlling external environment, strategy and size. The study showed that HRM has a noteworthy effect on growth / innovation indices, as opposed to the final performance. Also high orientation in all HRM model does not mean improve firm performance, as was expected. For acquiring a better understanding of organizational performance, the researches had collected not only financial measures (profitability, market share) but also indicator of operational and organizational performance (sale, growth, product quality, harmonious industrial relation etc.). They said that the internal process model was the most frequently adopted HRM model in company of the simple. The research showed that the financial performance is negatively related only with the external orientation. This advocates to the need to use the internal process modal as well, to have a control and retain capable employees. They argued that though some stuffy showed a link between organizational performance and characteristics of internal focus; this was not the case of their sample. The reason given by the researchers for this was that the internal orientation focuses on the inside of the firm, thus overlooking a very important motivating factor that is the comparison with competitor and the external environment. Patrick Gunnigle, Sarah Moore (1994) reached on the ideology of connecting business strategy decisions, product market characteristic and


personnel/human resource management policies. He considered empirical evidence from a survey of Irish organizations. They viewed that it is increasingly accepted that the optimum personnel policy choice is linked to the unique characteristic of the individual organization. Hence, argued that organization need to achieve a fit between personnel policy choice and broader strategic considerations, particularly product market condition and business strategy. However this Irish survey evidence they consider for the study presented them with a mixed picture. While some organization appeared to be successful aligning HR polices and business strategy this development was not widespread. Two areas were seen as of particular significance for aligning business strategy and personnel policy. Manpower planning identified as an important indicator of the strategic significance of human resources considerations was the first area. Organizations which place a strong emphasis on personnel policy choice could be expected to adopt a sophisticated approach to manpower planning, particularly in relation to identify manpower need and profile and man power flow practice concerning the entry and progression of employees into, through and out of the organization. Second employee relations were identified as a key aspect of the personnel policy. The nature of relationship between employer/management and employees influences broader human resource considerations such as employee commitment and provides the backdrop against which decision on other aspects of personnel policy are taken (e.g. communications, rewards, and appraisal). This article emphasized the importance of the dimensions of context and process of any organizational strategy. A third dimension requires further consideration i.e. the content of strategy: include all the information that is used during the formulation and implementation of any strategic- activity.


Denise Skinner, Christopher Mabey (1997) reviewed how human resources strategies are conceived, designed and implemented in an organization as perceived by the managers involved. The data was gathered using questionnaires completed by 723 managers studying in Open University MBA, over a period of five year. They concluded that most HR changes are organization wise and are intended to enhance organizational performance and support the achievement of primary business objectives. Whereas there is a clear broad level involvement at initiation and planning stages, the responsibility for implementation is unclear. They found out that this absence of clarity and citing of poor communication as the main reason for the failure of change initiatives raises a number of questions about leadership, vision and direction. The evaluation of the initiative is shown to be a difficult area, often involving inappropriate criteria and is perceived as having few links with the business strategy. At this stage lead tends to come from the chief executive and the links with business strategy are clearly perceived. However one of the HR changes progress to implementation the picture become more confused. It appears that the attaint ion of the chief executive move away from the change once it is launched but there is no obvious successor to lead the implementation of the change process. Where an HR director is present they might have been expected to play a key part in almost half of the cases. If the HR director is talking a significant role this is obviously to others. This finding raises important questions about leadership of change and the way in which the aims and purpose of strategic HR change are communicated throughout the organization. In the absence of activity and involved leadership at the top, who takes an overview of the progress and monitor its progress, which visibly


demonstrates organizational commitment and communicates the vision of change? Is it the layers of management below board who appeared as a significant other group? To what extent are the message about the change altered as they percolate through the organization to reflect other views and agendas, and to what extent is this deliberate? All these relate to internal communication and its importance as an issue is further supported by it having been identified as a major reason for the failure of change process. The overall picture which has emerged is of HR interventions intended to further business objectives which initially are promoted at the highest level but which become less focused and clear as the change progresses and which, at best, usually achieved only partial success.

Research Design
In order to accomplish the objective of the study, it is essential to articulate the manner in which it is to conducted, i.e., the research process was carried- out in a certain framework.

Research part is divided into fallowing steps:(1)Literature Survey (2)Analysis (3)Conclusion

Data Collection Sources

Research work has been done from two sources:-


Primary data

Primary data has been collected by questionnaire method. The interview taken with open-ended questions based on literature survey.


Secondary data


Secondary data: the data has been collected by receiving different lectures, from published books, management journals, article published by the other researchers on the subject and from internet.

Qualitative study has been used to obtain a better insight of the stated objectives. Exploratory has been undertaken. The case study approach has been used to have a birds eye view of the HRD system of the selected Indian Automobile companies. In-depth interview and discussion have been done with managers of the company to find out the strategic HR practices and the factors responsible for their successful integration with organizational goals.

The case study conducted with three companies viz. Maruti Udyog Limited, Hero Honda and Honda Motors. 20 HR managers and executive have been selected from three selected companies for interview.

The analytical tool employed to analyse the data collected was graphical method wherein the graphs are made with the help of Microsoft Excel software.

Sample size is small. The time slot given to finish the research was limited.
Research has been conducted at different places.

Appointment with manager was a problem.



Though there are many researchers who have given different models for the theory of conceptual frame work but here I have developed my own conceptual frame work model.



Corp Strategy

Organization Goals

Activities & process

& Goal congruence

Firm Performance (Profit)

HR Practices

HR Strategy

HR issues

In most cases of strategy formulation HR strategies are crafted in line with the corporate strategy. The main purpose of HR strategy is to address the HR issues of the organization. Further the strategic HR practice are molded and planned according to the organizational goals. The input like new recruitment when processed through its initial training, familiarization, and programme become output to the organization. These are termed as HR assets to the HR department. During each process the output of one subsystem become the input to the other subsystem. The practice like training and development and performance management are modified towards the achievement of the organizational objective. A strategic HR practice along with the business activates and process work towards the achievement of the organizational goals. In true sense, the integration of HR practices with the organizational goal takes place during the implementation of the core HR practices. The implementation of the HR practices are designed and planned on basis of the short term and long term objectives of the organization. An optimal level of integration of HR


practices with organizational goal leads to the goal congruence and ultimately results in better organizational performance.

HR: Human Resource HRM: Human Resource Management HRD: Human Resource Development MUL: Maruty Udyog Limited Strategic HR practices: Training and Development, Selection and Recruitment, Performance Appraisal. Integration: Refers to the alignment of the strategic HR factors with the organizational goals. ICT: Information and Communication Technology.


As per methodology of the study a case study strategy was adopted. The ongoing chapter will discuss the implementation of the core HR practice in the organization like MUL, HERO HONDA and HONDA MOTORS in


the Indian automobile market. The case study of the fallowing companies is based on the basis of document based study and interview schedule.


Maruti Udyog Limited (MLU) was established in Feb 1981 through an act of Parliament, to meet the growing demand of a personal transport caused by the lack of an efficient public transport system. Maruti revolutionized the way Indian looked at cars. No other car company so completely dominates its home market-(The economist). MLU is the first and only car company in the world to leads its home market in term of both market share and in the LD power customer satisfaction study (JD Power Asia Pacific 2000 India customer satisfaction studies). It is also the only car company in the world to be top ranked three times in a row (2000, 2001, and 2002).


The Leader in the Indian Auto Mobile Industry, Creating Customer Delight and Shareholders Wealth; pride Of India.


A vision fallowed by CORE VALUES:

Customer Obsession Fast, flexible &first mover Innovation &creativity Networking &partnership Openness & learning Today, Maruti Udyog limited (MLU), the undisputed leader in the Indian passenger car industry with a market share of more than fifty percent, with the enviable presence in al most all the segment in the passenger car industry, MLU has been able to surpass its competitors and managed to achieve substantial growth in a sustainable way. The success of MUL is largely attributed to its goal driven strategic HR and operational practices (chairmans report, 2004) to meet the challenge from its competitors who posed competitive threats to its positioning, growth and survival.


Maruti Udyog Limited Identified, even at its formative stage, that the first foremost task was to create a Maruti Management System by suitably drawing upon the experience of its collaborator, so as to achieve high level of excellence. The basic philosophy is that all employee of the company, working at any level, should be moulded into a team, so as to strive together to achieved commonly shared company goals and objectives. Employees should feel that the company is theirs and should look for their career growth in Maruti.


Maruti attempts are directed towards crating an atmosphere each member respect his fellow-workers opinion. Equally important is to refrain from any action which harms the company, but is designed to further individual self-interest. Such action can only be self-defeating in the long term. Individual goals can only be attained by system of mutual cooperation, and respecting the other persons right, knowledge, and character.

Maruti as a family
The concept of family will become more meaningful when the members actually develop familytype feeling for one another. Remembering that each of us is a member of a family/ either as a father, mother, son or daughter/ our task is to adhere with those very familiar norms at place of our workof a member helping the fallow workers with their works and with their problems, building a congenial atmosphere of openness and developing a sense of pride from being a member of the maruti family.

Development of human resources

The maruti philosophy is that all employees must be enabled to realize their full potential during their career in the company. Company policies of training, job rotation, etc. will be directed towards this end. At the same time, an employee has to contribute towards the realization of his own potential. For this, he must always have an open mind, and the learning process should never stop. New experience and analyzing mistakes are important way of learning. Reading, asking question and taking part in discussions are other way of enlarging ones knowledge and


mental caliber. Above all, employee must have a sense of pride in their work, and should be able to hold their head high and own the job done by them. Equally, employees must respect the work done by their colleagues, and realize that it is the some total of the contribution made by every which determines the extent of success of the company.


A harmony between the work culture, and organizational objectives, is very essential. In order that Maruti comply with the basic objectives adopted by the company since its inception, viz. fostering efficiency, productivity and team spirit, and the companys of being internationally competitive, it starts with the basic perquisite of creating an environment where only we feeling dominates- where each one is considered himself / herself to be an important member of one large Maruti family. ORGANISATIONAL STRUCTURE Maruti has believed, since the very beginning that it is its employees who could make it into an organization with a difference. Accordingly, as against the traditional hierarchical system of management which causes unnecessary delays in decision- making. They have built up a flat organization with a family type of atmosphere at the place of work. The Company is divided into different divisions accordingly to the various functional areas. A Divisional Manager heads each Division. Divisions are further divided into departments that are headed by Department Managers who report to the respective Divisional Managers. Designations in the Company are based on the functional responsibility and


not levels as in terms of the Companys philosophy designations and functional responsibility are de-linked from the salary levels. The total operations of the Company are divided into Divisions like Marketing and Sales, Spares, Engineering, Q.A. & Services, Production, Production Engineering, Materials , Information Services, Finance, Personnel & Administration, etc. Each Division is further divided into Departments and headed by a Departmental Manager who is assisted by Supervisory Executives.

Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organization. It is often termed positive in that its objective is to increase the selection ratio, that is, the number of applicants per job opening. Hiring through selection is negative, in that it attempts to eliminate applicants, leaving only the best to be placed in the firm.


Recruitment Policy of Maruti is to enrich the organizations human resources by filling vacancies with the best qualified and suitable people. The recruitment policy involves the employers commitment to these principles: To find and employ the best qualifies person for each job. To retain the most promising of those hired. To offer promising opportunities for the life time working careers.


To provide facilities and opportunities for personal growth on the job.


Maruti has a very transparent Recruitment & selection process. The source of employee has been classified into two types: INTERNAL SOURCES: Filling a job opening form within Maruti has the advantage of stimulating preparation for possible transfer or promotion, increasing the general level of morale, and providing more information about job candidates through analysis of job histories within the organization. An internal search of computer personnel data bank flags personnel with minimum qualification for the job opening. In most instances, call letters are sent to the eligible candidate. Company prefers to fill the higher positions by promoting the present employees. Vacancies of middle as well as lower level are also filled by transfers, upgrading and even demotions of the present employees. Internal Recruitment is Maruti is also prevalent in the workman moving to supervision level. Eligible candidate has to sit for a written exams testing on his analytical skills, technical skills, organization awareness, behavioral skills, etc. Candidates clearing this exam move to supervisor level. Internal Recruitment is also carried out by job rotation based on departmental vacancies. EXTERNAL SOURCES: Maruti goes in for external recruitment too, for

bringing new talent in the organization to keep up the HR Vision of MUL.


Maruti traps the best available talent in the country; it goes for campus placement Engineers IITs /RECs /Rorkee/ HBTI / DCE only MBAs IIMS/ XLRI /MDI /IMT Ghaziabad. CAs Rank holder. Interviews are conducted and selected candidates are put in the company at LII level. Also all India Test is conducted for filling various positions. Test is based on technical skills analytical, psychological test, general awareness skills, English usage, leadership skill, etc. basically they are tested on various competencies. Candidates clearing the examination sit in front of a selection committee for personal interview. Candidates are filtered and a final list is made, these candidates are send for physical examination and final call letter is given to selected candidates.
For Workman: Technicians for it is all over India are recruited in

Maruti. Written test is conducted testing on the technical skill and general awareness, candidates who clear the exam are kept as Apprentices for 1 year. Good performs are kept in Maruti at WTO level. Under probation for 3 years. During the probation worker trainees can be asked to leave the company if his performance is


unsatisfactory. On completion of probation period he is made permanent at L3 level. Lateral entries are also there for experienced professionals. The MD would make appointment to the positions of divisional mangers and the department mangers only. Section managers would be appointment by the Divisional Managers.


After the employee has been recruited and selected Maruti develops the personnel to better fit the job and the organization. No person recruited in Maruti is perfect fit at the time of hiring. Marutis development programs are very well planned and have helped in return values to the organization in terms of increased productivity, heightened morale, reduce costs, and greater organizational stability and flexibility to adapt to changing external requirement. Programs conducted in their search for work assignments that adds up to life-long career.

Employers today are taking advantage of the fact that training can strengthen employee commitment. The expansion of training role reflects, The game of economic competition has new rules. It is no longer enough to be efficient. Thriving today requires that the firm be fast and responsive. It requires responding to customers needs for quality, variety, customization, convenience and timeliness. Meeting these new standards requires a workforce, which is more that just technically trained. It requires people who are capable of analyzing and solving job related problems,


working proactively in teams, switching gears and shifting from job to job as well. The management of Maruti has realized these facts and is therefore working towards it.


Builds a learning organization Continuous value addition to professional skills Customized training Training to the personnel of Business partners.

Maruti takes training very seriously, a proper training need analysis is done to identify the training needs of individuals. There are list of core competencies. Tactical, technical and technological proficiency Cognitive skills and abilities such as oral communication and problem solving. Internal personal skills and abilities, such as skill in Human Relations and team work ability. Personal characteristic such as decisiveness and tenacity. The competency level required should correlate with the levels of position held.

For example:


Executives at first level typically need to communicate instruction, descriptions and ideas to others. Executives working at middle and upper levels needs higher order oral and written communications skills, including skills in drawing inferences, forming hypothesis, developing logical arguments and expressing such information so that others are convinced or persuaded. Any dispensed between the competency and position held is taken care and training is conducted accordingly. ANNUAL TRAINING PROGRAMME Annual training programmes are conducted for each employee for 80 hours per year. Table below is the training schedule for the year. MARUTI UDYOG LIMITED ANNUAL TRAINING PLAN FOR 2005-2006 TOPIC ORGANISATIONS KNOWLEDGE Orientation Organization knowledge Product orientation QUALITY Quality and cost management Benchmarking QS-9000 Awareness program ISO-9000- (revised 2000 version) ISO-14000 Environmental systems Total productive maintenance MARKETING Marketing and customer orientation FINANCE Basic financial management GROUP new joinees all levels all levels all levels L-II and above all levels ASUP, SUP & above All levels All Levels All Levels ASUP, SUP & above


Activity based costing & budgeting HEALTH & SAFETY Health Stress management COMPUTER KNOWLEDGE MS office, advanced excel, advanced access E-commerce and internet applications Enterprise resource planning BEHAVIORAL Leadership, teambuilding and conflict mgmt. Empowerment workshops Counseling skills Personal growth workshops Management of self Negotiation skills Creativity workshops Supervisory development programme Communication skills Activities based leadership GENERAL MANAGEMENT Business policy and strategy Labour laws Time management AOTS transfer of learning Training for training Competency mapping workshop Office management & communication Supply chain management Logistics and materials management

DPMs & above All Levels All Levels All Levels L-II & above L-II & above ASUP, SUP & L-II & above ASUP, SUP & LWO L9 LWO-L9 L-II & above ASUP, SUP & New ASUPs ASUP, SUP & L-II & above Above above

above above

DPMs & above ASUP & above ASUP & above L-II & above Internal Faculty I/C DPM & faculty Office staff > ASUP L-II & above ASUP, SUP & above



Training customized to meet organizational objective ISO 14000 training are conducted Training on Business strategy Maruti conducts this training so that it helps in achieving the organizational objectives Technical training are given on Latest technology

Training is held in-ordination with SMA Suzuki Motor Corporation Japan and AOTS (Association for Overseas technical scholarship). More than 2000 employed have been covered under the various schemes.

SMC training for technicians for 6 months in Japan. Two batches are send per year consisting of 50 employees each. Javada training for 9 months. Press, Tools and Die specialists are trained. On designing and maintenance of tools. AOTS Technical training is conducted for duration of 3.5 to 6 months for supervision and above to impart the knowledge know how. R&D training Research on new technologies is conducted, the duration of this training is two years. AOTS Managerial training is conducted to impact Managerial best practices to Managers & above. The duration for this training varies from 4 to 10 weeks. The topic covered under these are:


LEADERSHIP DEVELOPMENT PROGRAMS Maruti has recently thought of developing their employee who is consistently high-performers. These kind of performers will be put under fast track and will be evaluated on various competencies. The competencies listed by MUL for the purposes of leadership programmes are: Achievement orientation Communication skills Strategic thinking and looking at the bigger picture Ability to deal with ambiguity and conflicting situation. Creative thinker (situation, individual, group) Resilience and ability to bounce back. Breadth of general awareness and knowledge Organizational awareness. Team player Organizational commitment Adaptability Sensitivity to the needs of others Cultural awareness Accountability Emotional intelligence Coaching and mentioning Each competence defined is followed by six behavioral pattern graded form A0 to A5 is the behavioral pattern exhibited by a person who completely lacks the competence where as A5 denotes the behavioral

pattern that typifies the competence. The grader grades the rates potential leader on the basis of behaviors that best describes him of her. Potential leader who lacks any of these competencies undergoes development programmes so as to become a future leader of MUL. The content of these development programmes is still in the pipeline. Till now MUL has just identified various competencies their leader should possess so as lead their huge organization.


Maruti is a learning organization, constantly upgrading its

professional technical and behavioral skills. The production division has recently undertaken to identify the training needs of employees with in the division. It has formulated a huge database about the individual training needs of nearly 3500 employees. Supervisors, managers and DPMs are asked to feed into the computer what they believe are the training requirements of each individual. To provide a perspective, the division secured the training acquired so far by each of the 3500 employees. Date and duration of the training sessions are also feed in. other details like employees experience and level are also made available. These could be used as reference by supervisors and DPMs. Wherever necessary, the training recommendations are to be filled in consultation with the individual. At the end of one month the division has reasonable data about the employees requirements. Based on the information gathered, the production division plans to provide suitable


training inputs to all employees in a phased manner. The feedback received from employees during these training sessions is fed into the format. And the database on each individuals skill and training status will be constantly enriched. There is likely to emerge a definite training plan or matrix for each employee. Employees will have a fair idea of where they are headed on the training track. The company will also know where it needs to make further training investment for the employees. The production division deserves to be complemented. It is a good idea, promoting the interests of individual employees as well as the company. It is an employee development exercise and is designed to secure maximum utilization of the investment made by the company in training. A similar effort may be considered on a company wide scale as well. A large number of people in the production division has taken pains to spend time, reflect and feed in data relating to training and development needs.









Another way of tapping the hidden potential of the people is through Quality Circles which lead them to achieve the organizational goal. Quality Circles are a forum for people within a section or department to voluntarily come together and work towards making improvements in their field of work through group discussions and group decisions, which are guided by


organizational goals. Although it bears the name of quality, this is movement that is not linked to the improvement of the product quality alone but also to quality of work in general resulting in increase in efficiency, productivity, cost saving, safety, cleanliness, orderliness etc. all of which ultimately contribute to making a stimulating work environment. Several companies in Japan have very effectively utilized this concept to make improvements in al spheres of operations. To promote this activity an attractive reward system has been initiated for a quality circles group suggestion. The best quality circle is sent to Japan generally every year. The objective of such group activity is not only to benefit the Company by way of work related improvements, but also tot enable each employee to develop his analytical skill, the spirit of teamwork and train himself to assume greater responsibilities on the job as well as in this personal life. Once the members of a quality circle learn to perceive what is good quality and what is not, they recognize those problems which were previously taken for grated and these would become their target for improvement through group discussions. The members would gradually learn to conduct their meetings in such a way that logical and feasible solutions emerge, which can then be implemented by members themselves to work towards the accomplishment of the organizational objectives. These organized training activities leads towards the goal congruence.



In Maruti the training is so continuous that they do not need to implement the refreshers training programme. According to the senior managers of the company In the present day down sizing is employed as a strategy for the cost reduction, employees should live with that and accept it and shoulder their own objectives along with the companys objectives, but it is not the case with the employees at the lower levels, they live with the constant fear of losing the job. Hence to eliminate this problem of de-motivation Maruti has a plan to outsource motivational training programmes for the employees at the lower level. For example Maruti is set to out source a motivational class room training programme from AMICUS (HRD) consultants.


The performance management and development system has been recently worked out by MUL building on the strengths of the existing Performance Appraisal System; removing its weakness; and incorporating some contemporary good practice. MUL follows a system model to effect optimal level of goal congruence.



Underlying Philosophy

Healthy Processes

Requisite Competencies

Enabling Format

Desired Output


The Power of the Performance Management and development System has been done through the System Model. The five elements in the system model are as follows
i) System is based on underlying philosophy of management. ii) All the executives top, senior, middle and junior need to

internalize the philosophy, so that the processes are healthy, and do not distort the formats.
iii) All the executives, in their different roles, in this case as Appraisee,









competencies, so that the processes and format can generate meaningful experiences for all of them.
iv) It has designed the formats, incorporating the philosophy, and

striking a balance between length, time effort and benefits.

v) If the above four step are well managed, optimum output from

the system is achieved.

The principles underlying the Maruti PMDS are as follows.
a) The Annual Appraisal is focused on performance, and not on traits. b) Performance is assessed against goals and plans, expressed in

measurable parameters, especially numbers and time lines, wherever possible.

c) The minimal purpose of the system is not just to appraise, but also

to manage and improve performance. This requires year long processes, start to finish, and not just a year-end spurt of activity.


This value added purpose of the system helps in the development of the appraise.
d) Performance and development are enhanced by participation and

timely feedback.
e) Performance








circumstances. So, appraisal is still relative.

f) Organizational learning, over a few rounds, has improved the

integrity and effectiveness of the system.

Based on the above principles, the PMDS incorporates the following processes.
i) Proposal process From the financial year 2001 / 02 each

executive, from level L11 and above, begins the fiscal year, by proposing his/ her Goals and plans on the Key Results Areas.
ii) Expectation







independent homework, on the Goals and Plans desired from the executive.
iii) Convergence process The two get together, shares the data,

discuss and converge on the agreed Goals and Plans for the year.
iv) Communication process The two keep themselves abreast of

data on on-going performance, gaps and challenges.

v) Coaching Process The senior acts as a coach, helping the junior,

not only to reach the agreed goals, but also to grow professionally.
vi) Learning Process The Junior, on his/her part, needs to not only

implement the plans and achieve the results, but also keep developing from the experience and the coaching


vii) Appraisal Process At the year-end, an appraisal has to be done,

using as inputs all data, as well as the self-appraisal of the appraise and the draft appraisal by the appraiser.

Review Process While each manager appraises the executive

reporting to him, there is a need of a process for moderating the appraisals, for the different appraiser biases, of lenience and strictness, and arriving at equitable appraisals.

i) Goal setting How to propose desire and converge on goals. ii) Work Planning How to programme the tasks, time and other

resources, optimally, to reach the goals.

iii) Feedback How to give performance related feedback in a helpful

way. Also how to receive, seek, perceive and utilize the feedback for action, learning and development.
iv) Appraisal How to maintain relevant data, analyze and arrive at

self- appraisal.
v) Review How to appraise the appraisals and guide the appraisers

for better appraisals in future.

The above philosophy and processes was strongly supported by the executives in their responses to the questionnaire on PMDS. The following format is used.


GWP The year begins with a clarification of Goals and Work plans between each appraiser and his/her appraises. To institutionalize this, requires a three-part form, each just one sheet. a) Proposed GWP b) Desired GWP c) Agreed GWP Mid-Year review It is used to have a formal, mid-year, short appraisal and feedback session. i.e. a) Review and Re-Planning b) Guidelines for the Mid-Year review. Year-end Appraisal For the year-end appraisal there is a provision for self-appraisal by the appraise. There is identification of training and development needs and action on them is as important as the reward decision. There are 7 forms three different time periods are covered --beginning, middle and end of the year. Each time the task is different and essential. Each form is short. OUTPUTS This PMDS has following benefits to MUL
i) To






development of human resources; a sense of equity; overall satisfaction and higher morale.


ii) To

each Executive -- An opportunity to contribute more;

autonomy. With clear accountability; learning and development.

iii) To each senior -- Greater confidence in achieving divisional and

departmental goals; satisfaction of helping both the executives and the organization, in a balanced manner. PROMOTION POLICY LINKED TO PERFORMANCE Maruti being in a competitive business environment has achieved and maintained high standards of efficiency and performance, they recognizes and suitably reward employees whose performance is high. This is done through a well designed performance management and developed system, which identifies strengths and weakness of individuals. The purpose of PMDS is not only for effecting promotion but also to serve as an important tool for training and developmental employees and to promote a sense of job satisfaction and to impress upon other employees that opportunities are open to levels of responsibility so as to enhance individual and organizational effectiveness. The promotion policy is meant to serve as a basic guideline for the career growth of employees in the organization. POLICY All employees in the organization are appraised once in a year. The appraisal period is April to March. PMDS forms the basis for determining an individuals eligibility for promotion from time to time.


Promotion will be from 1st April each year.

Following table indicates the norms for grading and award to points at various levels in the context of eligibility for promotion after accumulation of the number of points required at these levels;-


No of points required to Level Gradin g A B C L3 to L7 C A B C L8 to L12 CA B C L-13 & Managers CA+ A B C CUpto 25% (A+ < 5%) 75% Up to 25% 75% Up to 25% 75% %age distribution Up to 25% 75% Point s 15 10 07 0 15 10 07 0 15 10 07 0 20 15 10 07 78 50 40 30 (L3 & L4) 40 (L5 L7) be eligible for consideration for promotion L1 to L2 40

For department Managers the basis of promotion is absolute performance.


The history of Honda Motor Company began with the vision of one man Soichiro Honda. His dream was personal mobility for everyone. Scichiro Honda founded Honda Motor Company in 1948. In the same year, he designed and engineered the first product of this company a 50cc motorized bike on a bicycle frame in his small shed at Hamamatsu. Today, as the company celebrates its 50th anniversary, Honda is a global firm with a global viewpoint and a four-region global strategy that is reflected in a solid commitment to local markets and economies. The essential spirit of Honda: In our eyes, however, our most enduring challenge has been to satisfy the ever-changing needs of our customers. Hondas vision and role fulfilling the global needs of personal mobility in the new automotive society go hand in hand with its corporate philosophy: maintaining a global viewpoint, the company is dedicated to supplying products of the highest efficiency at a reasonable price for worldwide customer satisfaction. In India, it is through Honda SIEL Cars India (HSCI) that customers can enjoy the benefits of Hondas expertise. Incorporated in December 1995, HSCI is a joint venture between Honda Motor Co Ltd, Japan, and SIEL Ltd, India. The automobile production facility of HSCI has been set up on a 150acre site in Greater Noida, in the state of Uttar Pradesh. The initial installed capacity of this facility is 30,000 cars per annum (on a two-shift basis).


Commercial production of Honda automobiles from this facility commenced in December 1997.

Of course, Honda SIEL is an organization which follows the HRM practices that is in line with the practices followed by Maruti. But, sometimes its HR culture shoes a brief reflection of Japanese work culture. Honda is the organization, which cares for both human values and quality of work culture. Recruitment process in Honda follows the same practices as that of Maruti (both internal and external). The training and development programme is more concentrated towards total quality management (TQM). The quality objective of Honda SIEL is to attain zero defect. The training programmes are more frequent s compared to Maruti by virtue of which Honda is able to manage better JIT (Just in time) environment. Another exception about Honda is that they have set up a High the Training centre through which they manage all India level dealers. The performance appraisal system follows the principle of

Productivity and performance i.e. better performance and productivity, the better the reward in terms of personnel development more or less Honda follows the same path as that like Maruti. The performance is measured on the basis of yearly or mid yearly on the basis of over all performance.



HHML, a part of the Hero group, is a reputed name in the two-wheeler sector and the management has a rich experience in the business. HHML is a joint venture with Honda Corporation, Japan and over the years has been the most successful indo-Japanese enter in two wheelers. Today has managed to achieve indigenization of over 95 percent, a Honda record worldwide. is at present the largest selling Indian motorcycle and the most fuel efficient in its category the outcome of Hero Groups foresight and another classic example of how the Group strives to provide the customer with excellence and satisfaction. The company has invested in capex, in the past three years to cater to the increasing demand. The company has been cash rich and has been effectively utilizing its surplus resources combined with prudent working capital management. has set a target of 20% volume growth and 25% turnover growth for the fiscal 2001-02. The company has also set a turnover target of Rs. 200 million from spare parts business in fiscal 2003 up from Rs. 145 million in 2002 and the business is expected grow faster than bike sales for the next 5 yrs. It has planned to bring in operational efficiencies with special focus on distribution, dealerships and pricing and the successful implementation of SAP R/3 (ERP-Program-Project Synergy) has enabled proper planning and company wide efficiency.

Vision & Mission

With a clear vision to be the global leader the company spell out their mission as We at are continuously striving for synergy between technology systems and human resources to provide products and services

that meet the quality, performance and price aspirations of out customers. While doing so we maintain the highest standards of ethics and societal responsibilities, constantly innovate products and processed and develop teams that keep the momentum going to take the company to excellence in the new millennium. Driven by the trust of over 5 million customers, the product range today commands a market share of 48% making it a veritable giant in the industry. Add to the technological excellence, an expansive dealer network, and reliable after sales service, and you have one of the most customer friendly companies. The group has undertaken the strategy for steady up gradation of technologies and there has been diversifications and setting of newer establishments to meet stringent international standards. At the core of it all is a customer centric scheme of policies and production and the bottom line is to Add Value while Engineering Satisfaction. The companys success has been driven by customer centric strategy and teamwork to achieve progress and productivity. The philosophy of emphasizes the Pursuit of Excellence in designing and manufacturing technologically and qualitatively superior products and in creating economic value for its stakeholder. It takes care of its customers through value based competitive pricing and good after sales service. All these strategies are backed by a strong HR system which is people oriented.



The success of HERO HONDA is the evidence of its most structured Human Resource Management. Over the years HERO HONDA is being the bench mark for many in the every passage of human resource practices. Recruitment: Though HERO HONDA uses both internal and external sources of recruitment. Its selection procedure is being the benchmark for many. HERO HONDA has as company sets standard for selection by virtue of its most efficient selection and recruitment through external sources and internal sources. The differentiation HERO HONDA uses the process of elimination following seven steps of recruitment and selection procedure. As a result of which it has been able to select the right people at the right places. The selection procedure is very tough and is prove of the right man of the right place. HERO HONDA appointment through internal sources also follows a five step procedure. The right men and the right places give better productivity. The total recruitment process in line with the organizational goals. Training and development HERO HONDA sets the standard for training and development. For example HERO HONDA conducts both internal and external training programs. The training and development in HERO HONDA is one of the best HR practices to recon with. The training in HERO HONDA is very continuous; they managed weekly training programs for their employees. Training is provided at all the levels and there is always continuous learning. HERO HONDA understands the needs for training at all levels. Therefore, it introduces different types of training programs for individual departments. of Like MUL it also follows there is the a strategic degree of implementation quality circle. However

differentiation in the degree of implementation because HERO HONDA follows a very brief version of MULs system.










development practices. HERO HONDA sustains its success and growth for a long period. Performance appraisal: It follows a very professional approach of measuring productivity and performance. The system of appraisal is functionally modified time to time according to the short-term goal of the organization. Individual employees are appraised on the basis of their individual performance and merits. Team work is encouraged. An individual is appraised for better performance insight the team which is instrumental to the team success. In fact HERO HONDA follows the same performance system model, which is followed by MUL. Most of the successful Japanese organizations try to implement the philosophy of the system model which is very much goal oriented. The professional approaches result in better employee motivation where people were given enough opportunities to appraise themselves and ultimately giving better performance.


According to the methodology of the study, the interview schedule was conducted with corporate HR and Personal Manager of the concerned companies. In total around 25 manager and executives were consulted and interviewed in person. The result of the interview schedule is discussed below. The objective of the interview schedule was to find out the ongoing HR strategies, the process of integration of HR strategies with the


organizational goal and the key HR practices that enables the goal congruence.

The prevailing HR strategies and related practices

Most of the Managers from MUL Honda SIEL and Hero Honda stated the they do follow a strategies HRM approach which is defined by their clearly stated vision and mission statements. They follow a very clearly defined written HR practices, but however around 50 percent of the Managers revealed that the exposure to the written strategy is limited to the senior Management people at the conceptual level. In fact the strategic clarity is expressed through a set of prevailing HR practices. The strategic HR practices include the core practice like, Recruitment and selection, Training & development, Performance Appraisal, Compensation and Rewards etc. Through these HR practices the organization deals with specific HR issues like allocation of employment induction of the new employees through training program, measurement and recognition of performance. The strategies success and the difference among the organization are largely dependant on the way these key practices are implemented. For example the MUL, manager revealed that they give primary importance to the practices like training and development and performance appraisal. Where as the Honda SIEL people are strong in training and recruitment. The HR issues like employment needs are often addressed by the effective practices of Recruitment and selection. Majority of the Managers expressed that they follow a much defined Recruitment and selection system through which they could able to select the right people for the right place. Through the practice of training they fulfill the training needs


and motivate the employee to work towards the organizational goal. Through continuous training programme the manager the change implementation and through regular periodic performance Appraisal, they keep their employee upgraded and motivated.

HRM & the Business Strategy

Integration of HRM with corporate strategy

10% 20% Agree Moderately agree Neutral 70%

Most of the managers agreed that HRM is an integral of their main business strategy. The business understands the importance of human capital the success of business ins highly dependant on the success of the human performance and HR policies and practices deals with human issues related to selecting and motivating the employees to work successfully towards the organizational goal. The success of any business strategy is largely dependent on the conducive HR policies.


In fact strategies are formed at the conceptual level, but the final implementation is done in consultation with all the concerned personnel who will form the major part in the implementation programme.

HR strategies & organizational goals

Almost all the managers and executives are of the opinion that organizational goals can be achieved through conducive HR strategies. Effective HR practices leads and motivates the employees to work towards a common organizational goal. That is why very often HR strategies are formed in line with the organizational goals and the practices are adopted accordingly. For example, the executives of MUL revealed that in the recently implemented change programme Challenge 30, the objective was to reduce the total cost by 30%. The HRM practices introduced contractual employment, through which they cut down their employment cost by around 60 percent. Through waste management and zero defect training programme they reduced the cost incurred by 25 percent. Thus HR practices are planned in line with the organizational goals. The managers from hero Honda and Honda SIEL, also revealed that very often HR practices are molded according of their organizational objectives.


The integration of HR strategies with organizational goals.

All the Manager stated that there is obvious integration of HR strategies with organizational goal. In fact the integration takes place at the functional and structural level. The integration is visualized through the strategic implementation of the core HR practice.

Existance of Integration


HR practices like, Training and development, performance appraisal and recruitment and selection are very often molded according to the goal of the organization.


Core HR Practices

40% 60%

Training and development Performance appraisal

Around 75 percent of the Managers believed that Training and development followed by a conducive performance appraisal system are the most important HR practices that validate the true integration. They graded the importance of the training to be 60% and performance appraisal system to be 40%. Through continuous training programme the corporate develops orientation amongst the employees to work together toward the attainment of the greater organizational goal. Performance appraisal system up grades the employees capabilities and ultimately motivates them to perform according to the goal expectations. Successful integrations generate better performance, which can be evidenced by the continuous better performances of MUL, Honda SIEL, and HERO HONDA. All the mangers believed that it is the integration that keeps the employees motivated and results in the increase in the per capita productivity which finally generates better organizational performances.

Better integration provides goal clarity and goal congruence. With goal congruence and clarity employee could be able to match or integrate employee could able to match or integrate their personal objectives with organizational objective that in turn leads to the increase in the satisfaction level of employees (Senior HR Manager, MUL) satisfied employees perform at the expected level.

Factors for successful integration

The interview with the mangers revealed that there are a number of factors which if present in any organization will lea tot successful integration of the strategic HR practices and organizational goals. The managers confirmed that the following factors are of utmost importance for successful integration. Presence of a conducive organization culture (2.5) Involvement of the line mangers. Proper manpower planning for the task. Optimistic attitude of the top management. Presence of a clear written organization strategy and mission. Existence of strategic leadership / presence of a good leader. Presence of an effective performance management system with continuous monitoring and feedback. Realizing the importance of integration Training needs analysis followed by effective training. Effective resource allocation.









understanding. Role clarity. Adequate knowledge level of the HR personnel. Focused scanning of the internal and external environment. All the manager believed that successful integration is largely

dependent on the eff3ective two way communication between the management and employees. Any modification in the implementation of the core HR practices are communicated clearly the employees at all the levels. The organizational objectives (both short term and long term) are clearly communicated through notice boards, news letters, circulars etc.

ICT improves integration

30% ICT improves integration Neutral 70%


Around 70 percent of the mangers believe that the adoption of information and communication technology (ICT) is very crucial for successful communication. Higher level of ICT adoption will result in the improvement in the level of integration. Hence, the majority of the managers believed that ICT is to be implemented at all the facets of organizations operational and function level. The primary focus should therefore be on total integration of ICT.

The above discussion reflects that the HR strategies are often in line with the corporate business strategies and there is goal. Congruence. There is obvious integration of the key HR practices with the organizational objectives. The integration takes place at the implementation level of of the core HR practices like training and development and PA. Organizations through follow the same strategies often differ in their part of implementation. Therefore, the level of integration varies from organization to organization. Better integration increased the employee satisfaction level, which ultimately result I the better organizational performance. Better integration can be achieved through ef3cti two way communications through ICT integration. Though all the organizations follows the path of the continuous improvement, in case of MUL the degree of integration seems to be higher.


On the one hand, the Globalization provided the best of opportunity to grow, on the other, it had increased the intensity of competition to such a level that it has brought back the age old philosophy of the survival of the fittest. The business firms in order to survive have to remain competitive by increasing their resource strengths and making efficient and economic use of their resources. The resources are defines in terms of men, money and material. Human resource, at the present scenario is considered as the most vital resource in providing the competitive advantage and thereby instrumental in increasing the organizational performance. The study revealed that the core HR practices like training ad development, recruitment and selection and performance appraisal are key to the organizational success. All the organizations under the study follow a defined course of strategic HR practices. The implementation part is goal driven. The most crucial strategic practice is training and development through which organizations achieve goal congruence. Both the document based study and the interview schedule suggests that the integration of the organizational goal with strategic HR practices takes place at the implementation level. Through continuous training programmes and periodic performance appraisals higher level of integration can be achieved. And integration will generate better organizational performance. The results reflect that the level of integration in case of MUL is higher than the others. The opportunities are many, so also the competition is intense, the key players , in order to remain competitive are continuously engaged in


building up their resource strength which will increase their productivity and effective integration of key HR practices forms the basis of better organizational performance. The integration HR practices determines or influences the performance of the employees of the four operational departments, Because successful HR practices keeps the employee satisfied and employee satisfaction reflects: High employee motivation High morale Better emotional quotient High commitment and high involvement Better departmental coordination Fun at workplace or enjoy working Better adoptability All these put together results in increased productivity which means delivering quality service with speed and comfort and that is comparative advantage. In automobile industry increased productivity results in better customer satisfaction, better customer satisfaction results in two most important phenomenal performances:1. It increases the customer retention. 2. Satisfied customers spread the word of mouth that leads to increases in customers. Thus, the ultimate result is building a loyal and increased customer base.

The integrated HRM strategies of any organization aims at the economic use of human resource towards continuous improvement of per capita productivity and there by attaining the competitive advantage. HRD acts as catalysts in several organization processes aimed towards keeping the organization profitable and alive. It is essentially an enabling process and hence should be less visible and more effective. The level and nature of human resources directly indicates that level of commitment and the seriousness with which the issues of HRD is looked at that organization. Besides, investments in human resource should be viewed as long- term investment.

HRD should plan an effective role in:

Optimizing employees to grow with the organization. Enabling employees to grow with the organization Helping in the congruence of individual aspiration and organizational expectations. Promoting collaboration and team spirit by establishing a climate of trust, openness mutuality and inter-dependence.


Besides its obvious advantages / benefits HRD concepts is not yet accepted in totality because of certain constraints. Major constraints in implementation is: 1. 2. 3. paucity of trained human resource Mismatch between the educational level and job profile. Quality of development of professional personal.

4. 5. 6. 7. 8. 9.

Imbalance of supply and demand of employees. Management commitment and involvement in implementation of HRD plans. Scarcity of component trainers. Inadequate infrastructure of the organization to provide facilities and opportunities. Lack of monitoring progress and adequate appraisal measures. Old promotional policies and incentives measures. changes.

10. Inadequate techniques to measure the benefit or resulted 11. Inadequate career growth planning. 12. government policies and trade unions attitude 13. Pressure of completion not allowing sufficient time for any development. 14. Social economical burden not allowing individual to think of self-development. 15. Varied organizational culture and role opportunities and frequent mobility of employees. But one should not forget the importance of the people, because it is the people who run the process. Therefore, lot of attention is given to the Human Resource development. Though organizations primarily focus on two HR practices (Recruitment and selection and training and development), there always remains a gap between the supply and demand in terms of training needs. The other areas like employee employer relationship, rewards, employee retention, etc, were not looked upon with sufficient care. The reasons for the same are often defined y the complexities of organizational objectives.


To minimize these constraints the organizations needs to effect a perfect integration of organization objectives with personal dimensions of objective and management by objective (MBO). The organizations need to educate and inform their employees regarding the present business scenario and environmental changes including the objective behind downsizing. So that people with the full knowledge can set and match their personal objective wit organizational objective and e prepared to serve effectively.


According to Mr. Cardigan (The HR Consultant) the best advice that can be provided to HR directors is that the best development actually costs nothing other than an investment of time and planning. Training and development for your employees is among the most important things you can do, not only for the individual staff butt also for the organization as a whole. Complement classroom based training with elearning to being the costs down but by all means do not diminish your commitment to the development of your employees. There is no doubt that human resource professionals have a full plate of corporate functions to contend with at any given time. But in an economic downturn, experts say, the job is downright unenviable and stressful. Sinclair says the best way to cope is by networking with others in the field. Other HR professionals are our biggest resource, says Dorothy Stubblebine, a consultant. Sometimes just knowing you dont have it as bad as others can help you relax. (Source: Bergen Record Corporation, the record (Berger County, NJ, 19 May 2003 Monday, all editions, North Jersey media group) In an increasingly competitive economic environment, enterprises are seeking more flexible and innovative forms of organization and production to increase economic efficiency in response to technological change, consumer preferences (emphasizing customer service, quality and variety) and globalization. Successful adoption of new technologies and their impact depend on the institutional context and organizational changes at the firm level. The new work organization practices accompanying the


introduction of information and communication technology (ICT) have been described as high performance work practices. The proliferation and total implementation of it culture. An internet culture helps the company to succeed through:

Employee empowerment.
Internet culture gives employees the authority and accountability to make business decisions. We encourage individuals to reach toward goals and then expect them to take the actions required to achieve those goals. We trust employees to do the right thing and give the information to make the right decisions.

Open, networked communications.

Internet culture assumes that information is more valuable when it is readily available. Collaboration is the key to success. Successful companies will share information, not heard it.

Magnified leadership.
Internet culture requires companies to cultivate leadership, as opposed to management. Management is appropriate when things are stable and working as they should be. With the pace at which the internet economy is moving, you cant do management. Leadership is a must. Leaders can adapt, can inspire people, and dont have to have all the answers before theyre willing to move.


Innovation and risk taking.

Internet culture treats failure as a learning opportunity; the focus is on solving problems and setting the stage for future success, not on finding a scapegoat and assigning punishment. This approach encourages innovation at every level of an organization and fosters an entrepreneurial can do attitude among employees and managers alike.

Internet culture depends upon highly flexible work environments the change to meet customer needs and market environments not simply to suit organizational norms. We have teams that were formed to solve a specific problem, deliver a product. Or launch a product. They work across many levels, organizations, and geographies and then they disband and re-group for other projects.


Q1. Do you agree that Indian Automobile Industry has come a long way since its inception?


What are the major problems faced by the Automobile Industry?

Q3. What are the different Human Resources practices undertaken by the company?

Q4. What all activities were carried out for better performance of Employee?

Q5. Do the HR practices really motivate the employees to perform according to the foal set by the organization or do they have their own objective?

Q6. What is the specific performance appraisal measure taken by your company?

Q7. Do you provide training to employees? Pl specify what kind of training do you provide?


Thank you