8/2/2019 Disser Tition
1/41
DISSERTATION
2009-12
Name: Rishabh Dhar (A37)
Enrol No. : A3906409269Faculty guide : Mrs Kirti Mankotia Singh
8/2/2019 Disser Tition
2/41
2
DECLARATION
I, Rishabh Dhar student of Bachelor of Business Administrationfrom Amity School of Business, Amity University Uttar Pradeshhereby declare that I have completed the Dissertation .
A Study of Changing Role of HRM in the Global BusinessScenario.
.
I further declare that the information presented in this project istrue and original to the best of my knowledge.
Date:21/02/2012 Rishabh Dhar
Enrol No:A3906409269
Place: Noida BBA 2009-12
8/2/2019 Disser Tition
3/41
3
ACKNOWLEDGEMENT
I am grateful to acknowledge the guidance given by Ms Kirti Mankotia Singh(Faculty of Amity school of business). It is the immense support and guidance
that I have been able to complete my project on time.I am especially thankful to
her for the tangible and unspoken support for my project.
I wish to express my gratitude to all other members from where I got the full
support and the valuable information and suggestion throughout my project.
Rishabh Dhar
A3906409269
BBA GENERAL
8/2/2019 Disser Tition
4/41
4
Sr NO. TOPIC Page no.
1. Synopsis2. Literature Review
2.1 Introduction to HRM
2.2 History of HRM
2.3 HRM activities
2.3.1 Manpower Planning
2.3.2 Recruitment
2.3.3 Performance Management
2.3.4 Training & Development
2.3.5 Compensation & Reward System
2.4 Importance of HRM
3. What is SHRM?3.1 Development in SHRM
3.2 Benefits of SHRM
3.3 Barriers to SHRM
4. Indian HRM in transition5. HRM in Global Perspectives
5.1 Issues and Challenges in global markets
5.2 SHRM as a response to challenges of globalisation
5.3 Implications of HRM activities
5.4 HRM activities after Globalisation
6 Cultural Diversity
8/2/2019 Disser Tition
5/41
5
7 Conclusion
8 Bibliography
8/2/2019 Disser Tition
6/41
6
Synopsis
Title:
A Study of Changing Role of HRM in the Global Business Scenario.
Objective:
To trace the evolution of HRM over the years.To understand the importance of HR for any business organization.
To understand the concept of HRM, highlighting the impact of SHRM towardsachieving the organizations strategic goals.To understand the changing business environment, and how HR plays a key role
in coping up with them.
Brief about the topic:
In order for any organization to achieve its strategic objectives, it must acquire a fast pace
global business environment and effective human resources planning.And, speaking of
strategic human resources planning, it refers to the integration of decisions about the
workforce with the decisions on the results of what is the entire organization trying to
achieve. Similarly, being able to adapt a fast pacing global business environment, as well as
able to go with the new trend of ideas in the business world; a company must build
strong human resource management relationships with the employees. And, being the majorcontributor to corporation mission and accomplishments, accountability and legal compliance
with organizational policies and guidelines must be achieved.Strong commitment to HRM
achievement of the companys strategic objectives must be done objectively. And, this can
only attain through total compliance with the companys laws, rules and regulations as a
mainstream of achieving developments and good outcomes of the entire performance of the
workforce. It must be kept in mind that excellent performance results to favorable results that
are beneficial to the company and to the
employees as well.
8/2/2019 Disser Tition
7/41
7
Current Status:
At this time and age, any human resources management can build better management
portfolio by investing substantial efforts in their employees advancement and
competitiveness in the corporate world. The quality of work of any worker largely dependson the investments made by the management on them. And, one of the ways to show that the
management is really prioritizing its workforce is to implement increase in employees
salaries, giving them appropriate benefits, advanced trainings and various work life-related
programs that will measure the returns of investments afterwards. This research also reveals
that an effective human resources planning also correlates with the high-standard HR values
and practices that will contribute to the growing business success. Additionally, human
resources management must have the ability too to assume and anticipate its customers
needs and demands; in order to achieve strategic goals and financial growth. Relatively,
strategic planning human resources planning require a deeper understanding of the managers
about the potential benefits of every employee to the success of the organization.
Research Methodology:
The approach to the dissertation report will include a descriptive research to the trends,
evolution and understanding the concepts of SHRM, and how it affects the business strategic
goals.It will be based on secondary data,with information being gathered from various
sources online,as well as referring to some known books.
8/2/2019 Disser Tition
8/41
8
Literature Review
What is HRM?
Human Resource Management (HRM) is the function within an organization that focuses on
recruitment of, management of, and providing direction for the people who work in theorganization. Human Resource Management can also be performed by line managers.
Human Resource Management is the organizational function that deals with issues related to
people such as compensation, hiring, performance management, organization development,
safety, wellness, benefits, employee motivation, communication, administration, and training.
Human Resource Management is also a strategic and comprehensive approach to managing
people and the workplace culture and environment. Effective HRM enables employees to
contribute effectively and productively to the overall company direction and the
accomplishment of the organization's goals and objectives.
Human Resource Management is moving away from traditional personnel, administration,
and transactional roles, which are increasingly outsourced. HRM is now expected to add
value to the strategic utilization of employees and that employee programs impact the
business in measurable ways. The new role of HRM involves strategic direction and HRM
metrics and measurements to demonstrate value.
The purpose of HRM is to anticipate changes within the employee framework, thereby
ensuring that the organizational objectives are fulfilled (Nankervis, Compton and McCarthy,
1993: p. 53). This process is critical to the strategic objectives of the firm. If changes in the
people market can be anticipated, and if this is attended to at the senior level, humanresource management (HRM) can act as a proactive advisor. However, the relationship
between overall strategic planning and HRM is largely dependent on the perceptions of both
HRM and senior management towards the contribution that the workforce can make to
corporate success. For example, companies that are aware of the strategic value of human
resources are more likely to integrate HRM with the overall strategic plan (Nankervis,
Compton and McCarthy, 1993: p. 56).
Human Resources Applies to Any Size of Organization
All organizations have people -- they have human resources. Regardless of the size of an
organization or the extent of its resources, the organization survives -- and thrives -- becauseof the capabilities and performance of its people. The activities to maximize those capabilities
and that performance are necessary regardless of whether the organization refers to them as
Human Resource Management, Human Resource Development or Human Resources -- or
has no formal name for those activities at all.
Human Resource Guidelines Apply to For-Profits and Nonprofits
The vast majority of resources in this topic apply to nonprofits as well as for-profits. There's a
misconception that there is a big difference in managing human resources in for-profit versus
nonprofit organizations. Actually, they should managed similarly. Nonprofits often have
unpaid human resources (volunteers), but we're learning that volunteers should be managed
much like employees ,it's just that they're not compensated with money; they're compensated
8/2/2019 Disser Tition
9/41
9
in other ways. Managing volunteers is very similar to paid staff -- their roles should be
carefully specified, they should be recruited carefully, they should be oriented and trained,
they should be organized into appropriate teams or with suitable supervisors, they should be
delegated to, their performance should be monitored, performance issues should be
addressed, and they should be rewarded for their performance.
Clarifying Some Terms -- Human Resource Management, Human Resources, HRD,
Talent Management
The Human Resource Management (HRM) function includes a variety of activities, and
key among them is responsibility for human resources -- for deciding what staffing needs
you have and whether to use independent contractors or hire employees to fill these needs,
recruiting and training the best employees, ensuring they are high performers, dealing with
performance issues, and ensuring your personnel and management practices conform to
various regulations. Activities also include managing your approach to employee benefits and
compensation, employee records and personnel policies. Usually small businesses (for-profit
or nonprofit) have to carry out these activities themselves because they can't yet afford part-or full-time help. However, they should always ensure that employees have -- and are aware
of -- personnel policies which conform to current regulations. These policies are often in the
form of employee manuals, which all employees have.
Some people distinguish a difference between HRM and Human Resource Development
(HRD), a profession. Those people might include HRM in HRD, explaining that HRD
includes the broader range of activities to develop personnel inside of organizations, e.g.,
career development, training, organization development, etc.
The HRM function and HRD profession have undergone tremendous change over the past
20-30 years. Many years ago, large organizations looked to the "Personnel Department,"
mostly to manage the paperwork around hiring and paying people. More recently,
organizations consider the "HR Department" as playing a major role in staffing, training and
helping to manage people so that people and the organization are performing at maximum
capability in a highly fulfilling manner. There is a long-standing argument about where HR-
related functions should be organized into large organizations, eg, "should HR be in the
Organization Development department or the other way around?"
Recently, the phrase "talent management" is being used to refer the activities to attract,
develop and retain employees. Some people and organizations use the phrase to refer
especially to talented and/or high-potential employees. The phrase often is usedinterchangeably with HR -- although as the field of talent management matures, it's very
likely there will be an increasing number of people who will strongly disagree about the
interchange of these fields.
Many people use the phrase "Human Resource Management," "Human Resource
Development" and "Human Resources" interchangeably, and abbreviate Human Resources
as HR -- HR has become a conventional term to refer to all of these phrases.Thus, this
Library uses the phrase "Human Resources" and the term "HR," not just for simplicity, but to
help the reader to see the important, broader perspective on human resources in
organizations, what's required to maximize the capabilities and performance of people in
organizations, regardless of the correct phrase or term to be applied when doing that.
8/2/2019 Disser Tition
10/41
10
HISTORY OF HRM
Human Resource Management from
the Industrial Revolution in the 18th century to present times.
The Industrial Revolution.The momentum for the industrial revolution grew through the 17th century. Agricultural
methods were continually improving, creating surpluses that were used for trade. In
addition, technical advances were also occurring, for example the Spinning Jenny and the
Steam Engine. These advances created a need for improved work methods, productivity
and quality that led to the beginning of the Industrial Revolution.
Adam Smith.In 1776, Adam Smith wrote about the economic advantages of the division of labour in
his work The Wealth of Nations. Smith (1776) proposed that work could be made more
efficient through specialisation and he suggested that work should be broken down into
simple tasks.
From this division he saw three advantages:
- the development of skills
- time saving
- the possibility of using specialised tools.
Smith's suggestions led to many changes in manufacturing processes.
"every individual necessarily labours to render the annual revenue of the society as great
as he can. He generally, indeed, neither intends to promote the public interest, nor knows
how much he is promoting it. By preferring the support of domestic to that of foreign
industry, he
intends only his own security; and by directing that industry in such a manner as its
produce may be of the greatest value, he intends only his own gain, and he is in this, as inmany other cases, led by an invisible hand to promote an end which was no part of his
intention.
Nor is it always the worse for the society that it was no part of it."(Smith, 1776)
Adam Smith, considered by many to be the father of Capitalism, also discussed the
Invisible Hand or Laissez Faire approach . "According to the hidden hand approach, the
only responsibility of business is to maximise profits according to the market principle
and within the constraints of the law. If government interference in business is restricted
to a minimum, society will benefit automatically from the activities of the business
sector." (Rossouw, 1994).
According to Rossouw (1994) the hidden hand approach lost value when societies did not
8/2/2019 Disser Tition
11/41
11
benefit automatically from business activity. It was clear that business could not be relied
upon to act in the best interests of is staff, consumers and the society within which it was
operating.
In 1832, Charles Babbage examined and expanded upon the division of labour in his
work, On the Economy of Machinery and Manufacturers. In this book Babbage offered,as an advantage to the division of labour, that the amount of skill needed to undertake a
specialised task was only the skill the necessary to complete the task. Babbage analysed
and documented the manufacture of a pin and broke the process down into seven
elements to illustrate his point. This study became important to employers in that they
only had to pay for the amount of skill required to complete a task (www.accel-team.com,
2004).
Trade Unions.During the late 1700's and early 1800's governments began to feel pressure from the
working class masses who started to question and defy the power of the aristocracy. The
working class began to form workplace combinations and trade organisationsto provide a
collective
voice for their rights. Governments tried to fight this using legislation such as the
Combination Acts of 1799/1800 in the UK, which banned everything from meetings to
combinations.
"There were also attempts to form general unions of all workers irrespective of trade.
William Benbow (a Lancashire shoemaker), Robert Owen and many others looked upon
trade unionism not just as a means for protecting and improving workers' living
standards, but also as a vehicle for changing the entire political and economic order of
society. Owen experimented with co-operative ventures and 'labour exchanges'; both
attempts to bypass the existing order of wage slavery." (Trade Unions Congress, 2004)
Trade Unions were and are still an influential force, working for continued economic and
social development of workers and societies in many countries around the world.
Frederick Winslow Taylor.F.W. Taylor is considered to be the father of Scientific Management. In 1911, his seminal
work, The Principles of Scientific Management was published. This book contains four
overriding principles of scientific management:
- Each part of an individuals work is analysed 'scientifically'.
- The most suitable person to undertake the job is 'scientifically chosen' and is taught the
exact way to do the job.
- Managers must co-operate with workers to ensure the job is done in a scientific way.
8/2/2019 Disser Tition
12/41
12
- There is a clear division of work and responsibility between management and workers.
(Bloomsbury, 2002)
"Taylor's impact has been so great because he developed a concept of work design, workmeasurement, production control and other functions, that completely changed the nature
of industry. Before scientific management, such departments as work study, personnel,
maintenance and quality control did not exist." (www.accel-team.com, 2004)
The Hawthorne StudiesThe Hawthorne Studies were a groundbreaking set of experiments conducted at the
Western Electric plant in Hawthorne, Chicago by Elton Mayo. The studies were
conducted from 1927 to 1932 and measured the relationship between productivity andworking environment. The studies were based on preliminary experiments conducted in
1924 that measured the effect of lighting on productivity. (Bloomsbury, 2002)
The results of the experiments showed that changes in the environment did affect
productivity, but this was not the sole factor. The workers considered management to be
showing an interest in them and this improved motivation.
Mayo's studies and the subsequent results were a significant break from the theories of
F.W. Taylor in that the workers were not solely motivated by self interest. Mayo's
research has led to the understanding that workplaces are more than machine like
environments in that there are social environments and human emotions that require
consideration. Mayo's studies led to the rise of the Human Relations Movement
The Human Relations Movement
The Human Relations movement "argues that people are not just logical decision makers but
have needs for creativity support, recognition and self-affirmation."
(Theworkingmanager.com, 2004).
The movement presents an alternative and opposite approach to scientific management as it
focuses on the individual and not the task.
The Human Relations movement boasts some of the world's foremost
management thinkers and theories in its ranks:
- Abraham Maslow. The Hierarchy of Needs. Presented in the US Psychology Review in
1943
- Douglas McGregor. Theory X and Theory Y. Published in the book 'The Human Side ofEnterprise" in 1960.
8/2/2019 Disser Tition
13/41
13
- Frederick Herzberg. The Hygiene-Motivation Theory. Published in the book "The
Motivation to Work" in 1959. (www.accel-team.com, 2004)
Contemporary Human Resource Management.In modern business the Human Resources Management function is complex and as such has
resulted in the formation of Human resource departments/divisions in companies to handle
this function. The Human resource function has become a wholly integrated part of the total
corporate strategy.
The function is diverse and covers many facets including Manpower planning, recruitment
and selection, employee motivation, performance monitoring and appraisal, industrial
relations, provision management of employee benefits and employee education training and
development.
Summary
The history of Human Resource Management has progressed through the ages from times
when people were abused in slave like working conditions to the modern environment where
people are viewed as assets to business and are treated accordingly.
The Human Resource function will have to adapt with the times as staff become more
dynamic and less limited in their roles and bound by a job description.
In future we may see employees being measured on the value they
contribute to a business and not their cost to the business.
http://www.123helpme.com/search.asp?text=human+resource+managementhttp://www.123helpme.com/search.asp?text=human+resource+management8/2/2019 Disser Tition
14/41
14
HR ACTIVITIES INCLUDES
Manpower PlanningManpower planning enables a department to project its short to long term needs on the basis
of its departmental plans so that it can adjust its manpower requirements to meet changing
priorities. The more changing the environment the department is in, the more the departmentneeds manpower planning to show:
the number of recruits required in a specified timeframe and the availability of talent early indications of potential recruitment or retention difficulties surpluses or deficiencies in certain ranks or grades availability of suitable qualified and experienced successors
RecruitmentBefore a department takes steps to employ staff, it should work out the type of staff it needs
in terms of grade and rank, and the time scale in which the staff are required.The general principles underpinning recruitment within the civil service are that recruitment
should:
use procedures which are clearly understood by candidates and which are open topublic scrutiny;
be fair, giving candidates who meet the stipulated minimum requirements equalopportunity for selection;
select candidates on the basis of merit and ability.Recruitment of overseas officers is undertaken only when no or insufficient local candidates
are available.There are three key components to the recruitment process:
deciding on terms of appointment selection of candidates probation
8/2/2019 Disser Tition
15/41
15
Performance ManagementPerformance management is a very important Human Resource Management function. Its
objective is to improve overall productivity and effectiveness by maximizing individual
performance and potential. Performance management is concerned with
improving individual and collective performance; communicating management's expectations to supervisors and staff; improving communication between senior management, supervisors and staff; assisting staff to enhance their career prospects through recognizing and rewarding
effective performance.
identifying and resolving cases of underperformance; and providing important links to other Human Resource Management functions, such as
training
It includes
MotivationMotivation is in many ways the key to the success of Human Resource Management
development. Managers should aim to increase performance through self-motivation,
rather than having to use external motivation (i.e. the imposition of rules and
continual improvements to conditions of service) to bring about higher standards of
performance.
Performance AppraisalPerformance appraisal assesses an individual's performance against previously agreed
work objectives. It serves two functions. First, it enables management to evaluate an
individual's performance in the current job to identify strengths and overcomeweaknesses. Second, it provides information to assist management plan
postings,transfers and promotions. In so doing, management is able to compare
performance and potential between officers of the same rank.
PromotionPromotion denotes that an individual has the competencies, i.e. the skills, abilities,
knowledge and attitudes, required to perform effectively at the next higher rank. The
competencies reflect the knowledge and skills exhibited in observable behaviour in
the relevant areas of work. Promotion provides motivation to perform well and is animportant part of performance management.
8/2/2019 Disser Tition
16/41
16
Training And Development
In simple terms, training and development refers to the imparting of specific skills, abilities
and knowledge to an employee. A formal definition of training & development is it is any
attempt to improve current or future employee performance by increasing an employees
ability to perform through learning, usually by changing the employees attitude or increasing his or her skills and knowledge. The need for training & development is determined by the
employees performance deficiency, computed as follows-
Training & Development need = Standard performanceActual performance.
Aims/objectives of training & development
The fundamental aim of training is to help the organization achieve its purpose by
addingvalue to its key resourcethe people it employs. Training means investing in the
people to enable them to perform better and to empower them to make the best use of their
naturalabilities. The particular objectives of training are to:
Develop the competences of employees and improve their performance;
Help people to grow within the organization in order that, as far as possible, its futureneeds
for human resource can be met from within;
Reduce the learning time for employees starting in new jobs on appointment,
transfersor promotion, and ensure that they become fully competent as quickly andeconomica
lly as possible.
Compensation & Reward SystemCompensation is payment in the form of hourly wages or annual salary combined with
benefits such as insurance, vacation, stock options, etc. that can positively or negatively
affect an employee's work performance. An ideal compensation management system will
help you significantly boost the performance of your employees and create a more engaged
workforce thats willing to go the extra mile for your organization. Such a system should be
well-defined and uniform and should apply to all levels of the organization as a general
system.
8/2/2019 Disser Tition
17/41
17
Importance of HRM in Global Business
The environments within which international business is carried out in the first decade of the
new millenium is increasingly competitive.
The technological environment is such that technology supremacy is fleeting andsince it does not last long - cannot be considered a strong advantage of a company.
The economic environment is effected by too many uncontrollable factors whichmeans a stable economic situation is less certain. The economy can be effected
negatively by things which large companies and federal governments have no control
over.
The political environment responds to the socio-cultural environment - which in manycountries, is undergoing the stresses of large immigration movements and cultural and
religious frictions. Very few regions of the world are free of conflict so no place has a
distinctively advantageous political environment
The geographic environment, long affected by rampant pollution, deforestation,greenhouses gases from autos and factories, acid rain from coal fired generators,
declining water reserves etc. etc. has seen a bit of Mother Nature fighting back in
2003-2005 with some spectacular events such as a massive tidal wave, numerous
destructive tornadoes, larger and more frequent hurricanes, volcanoes, mudslides,
sandstorms, drought and crop failures an so on. As a consequence of the changes to
and changes by the geographic environment, almost everyplace on the planet has had
to endure weather that has negatively effected business and agricultural productivity.
The one area in which companies can become more competitive is having the best people and
having those people serve their customers in the best way.
Therefore one of the key things for companies in the "new new" economy is to focus on the
people in the company, and the customers they serve - ergo, Human Resource Management
has become a "big issue" for international business.
8/2/2019 Disser Tition
18/41
18
What is SHRM ?
Strategic human resource management or SHRM is a branch of HRM. It emerged from the
discipline of human resource management and is a fairly new field. Strategic HRM is defined
as the linking of human resources with strategic goals and objectives in order to improve
business performance and develop organizational culture that foster innovation andcompetitive advantage. SHRM in an organization means to accept and involve the
functions of HR as a strategic partner in formulating and implementing the companys
strategies through human resource activities which may involve recruiting, selecting,
rewarding and training company personnel. In spite of the similarity in names, HRM and
SHRM are two different practices; SHRM is basically a part of the complete HRM process.
Besides that SHRM focuses more on long-term objectives rather than the in-house objectives
with employees dealt by HRM. In the late 1980s writers started stating strong opinions for a
much more strategic approach to managing people than was the standard practice of that
time. They clamored for the change of traditional management practices of industrial
relations and people to the modern more improved ones.
The center point of SHRM is to address and solve problems that effect management programs
centering on people in the long run and more than often globally. We can say that the main
goal or objective of SHRM is to increase productivity not only in the employees but in the
business overall, it achieves this by focusing on business problems and obstacles outside of
the human resources range. SHRM identifies important human resource areas where
strategies can be implied for the improvement of productivity and employee motivation. To
achieve good results communication between human resource and top management of the
organization is of utmost importance as cooperation is not possible without active
participation.
Key features of SHRM
The key features of strategic human resource management are given below:
Some organizing strategies or schemes link individual human resource interventionsso that they are mutually supportive
A great amount of responsibility is transferred down the line for the management ofHR.
There is a precise link between overall organization strategy, organizationenvironment, HR policies and practices.
Development in SHRM
In recent times HRM professionals have been facing challenges with employee participation,
performance management, employee reward systems, high commitment work systems and
human resource flow because of globalization. Traditional models and techniques have no
place in todays business world; also local companies which go global cannot use the same
tactics in the global business world.
Top managements and HR professionals that are involved in strategic human resource
management face a wide range of issues which include some of the following:
Rapid change in technology
8/2/2019 Disser Tition
19/41
19
Introduction of new concepts of general management Globalization of market integration Increased competition, which may not necessarily be local Resultant corporate climates Constantly changing ownership Cross-cultural issues Economic gravity- shifting from developed to developing countries.
Strategic human resource management is crucial large as well as small companies. In small
companies this process may be as simple as the manager or the owner himself taking time toobserve employees, along with assisting, assessing and giving regular reviews. However
larger companies will require a whole department to be in charge of such activities for the
development of employees. The quality of staff members can be improved by meting their
needs in such a way that it may benefit the company. Investing in employees and providing
them with tools they need to thrive and prosper in the company proves to be a good
investment in the long run for the company.
Benefits of SHRM
Identifying and analyzing external opportunities and threats that may be crucial to thecompany's success.Provides a clear business strategy and vision for the future.To supply competitive intelligence that may be useful in the strategic planning process.To recruit, retain and motivate people.To develop and retain of highly competent people.To ensure that people development issues are addressed systematically.To supply information regarding the company's internal strengths and weaknesses.To meet the expectations of the customers effectively.
8/2/2019 Disser Tition
20/41
20
To ensure high productivity.To ensure business surplus thorough competency
Barriersof SHRM
Barriers to successful SHRM implementation are complex. The main reason is a lack of
growth strategy or failure to implement one. Other major barriers are summarized as follows:
Inducing the vision and mission of the change effort.High resistance due to lack of cooperation from the bottom line.The commitment of the entire senior management team.Plans that integrate internal resource with external requirements.Limited time, money and the resources.The status quo approach of employees.Fear of incompetency of senior level managers to take up strategic steps.Diverse work-force with competitive skill sets.Fear towards victimisation in the wake of failtures.Improper strategic assignments and leadership conflict over authority.Ramifications for power relations.Vulnerability to legislative changes.Resistance that comes through the legitimate labour institutions.Presence of an active labour union.Economic and market pressures influenced the adoption of strategic HRM.
8/2/2019 Disser Tition
21/41
21
Indian HRM in Transition
One of the noteworthy features of the Indian workplace is demographic uniqueness. It is
estimated that both China and India will have a population of 1.45 billion people by 2030,
however, India will have a larger workforce than China. Indeed, it is likely India will have
986 million people of working age in 2030, which well probably be about 300 million morethan in 2007. And by 2050, it is expected India will have 230 million more workers than
China and about 500 million more than the United States of America (U.S.). It may be noted
that half of Indias current population of 1.1 billion people are under of 25 years of age
(Chatterjee 2006). While this fact is a demographic dividend for the economy, it is also adanger sign for the countrys ability to create new jobs at an unprecedented rate. As has been
pointed out by Meredith (2007).When Indias young demographic bubble begins to reach working age, India will
need far more jobs than currently exist to keep living standards from declining. India today
doesnt have enough good jobs for its existing workers, much less for millions of new ones. If
it cannot better educate its children and create jobs for then once they reach working age,
India faces a population time bomb: The nation will grow poorer and not richer, with hundred
of millions of people stuck in poverty.
With the retirement age being 55 to 58 years of age in most public sector
organisations, Indian workplaces are dominated by youth. Increasing the retirement age in
critical areas like universities, schools, hospitals, research institutions and public service is a
topic of considerable current debate and agenda of political parties.
The divergent view, that each society has an unique set of national nuances, which
guide particular managerial beliefs and actions, is being challenged in Indian society. An
emerging dominant perspective is the influence of globalisation on technological
advancements, business management, education and communication infrastructures is leading
to a converging effect on managerial mindsets and business behaviours. And when Indiaembraced liberalisation and economic reform in the early 1990s, dramatic changes were set in
motion in terms of corporate mindsets and HRM practices as a result of global imperatives
and accompanying changes in societal priorities. Indeed, the onset of a burgeoning
competitive service sector compelled a demographic shift in worker educational status and
heightened the demand for job relevant skills as well as regional diversity. Expectedly, there
has been a marked shift towards valuing human resources (HR) in Indian organisations as
they become increasingly strategy driven as opposed to the culture of the status quo.
Accordingly, competitive advantage in industries like software services, pharmaceuticals, and
biotechnology (where India is seeking to assert global dominance), the significance of HRs is
being emphasised. These relativities were demonstrated in a recent study of three global
Indian companies with (235 managers) when evidence was presented that positively linkedthe HRM practices with organisational performance (Khandekar & Sharma 2005). In spite of
this trend of convergence, a deep sense of locality exists creating more robust cross
vergence in the conceptual as well as practical domain.
8/2/2019 Disser Tition
22/41
22
Drivers of Contemporary Indian HRM Trends
The figure presents the key drivers for contemporary Indian HRM trends. In Figure there are
four external spheres of intervention for HRM professionals and these spheres are integrated
in a complex array within organisational settings. The intellectual sphere, which emphasises
the mindset transaction in work organisations, has been significantly impacted by the forces
of globalisation. Indeed, Chatterjee and Pearson (2000) argued, with supporting empirical
evidence from 421 senior level Indian managers, that many of the traditional Indian values
(respect for seniority, status and group affiliation) have been complemented by newer areas
of attention that are more usually linked to globalisation, such as work quality, customer
service and innovation. The most important work related attribute of the study was the
opportunity to learn new things at work. Such cross verging trends need to be understoodmore widely as practitioners face a new reality of human resource development of post
industrial economic organisations.
The other three spheres, of the figure, namely the emotional, the socio cultural and the
managerial domains are undergoing, similar profound changes. For instance, the socio
cultural sphere confronts the dialects of the national macro level reform agenda as well as the
challenge of innovating by addressing the hygiene and motivational features of the work
place. Consequently, this sphere, which is underpinned by the anchors of Sradha and Sneha,
has the opportunity to leverage work setting creativity in dimensions of autonomy,
empowerment, multiskilling and various types of job design. And the emotional sphere,
which focuses on creativity and innovation to encapsulate the notions of workplace
8/2/2019 Disser Tition
23/41
23
commitment and collaboration as well as favourable teamwork, brings desirable behavioural
elements of transparency and integrity into organisational procedures and practices. The
managerial sphere provides the mechanisms for shifting mindsets, for in Indian organisations
HRM is viewed to be closely aligned with managerial technical competency. Thus,
understanding of the relativity of HRM to strategic intended organisational performance is
less well articulated in Indian firms. The current emphasis of reconfiguring cadres (voluntaryand non-voluntary redundancy schemes), downsizing, delayering and similar arrangements
will become less relevant as holistic perspectives gain ground. A hallmark of future Indian
workplaces is likely to be a dominant emphasis on managerial training, structural redesign
and reframing of institutional architectures to achieve enterprise excellence. Thus, a primary
role of Indian managers will be to forge new employment and industrial relationships through
purposeful HRM policies and practices.
Key HRM Practices in Indian Organisations
HRM
PracticeObservable Features
Job
Description
Percentage of employees with formally defined work roles is very high in
the public sector.
Recruitment Strong dependence on formal labour market. Direct recruitment from
institutions of higher learning is very common amongst management,
engineering and similar professional cadres. Amongst other vehicles,
placement agencies, internet and print media are the most popular medium
for recruitment.
Compensation Strong emphasis on security and lifetime employment in public sector
including a range of facilities like, healthcare, housing and schooling for
children.
Training and
Development
Poorly institutionalised in Indian organisations. Popularity of training
programmes and their effect in skill and value development undeveloped.
Performance
Appraisal
A very low coverage of employees under formal performance appraisal and
rewards or organisational goals
Promotion and
Reward
Moderately variable across industries. Seniority systems still dominate the
public sector enterprises. Use of merit and performance limited mostly to
globally orientated industries.
Career
Planning
Limited in scope. The seniority based escalator system in the public sector
provides stability and progression in career. Widespread use of voluntaryretirement scheme in public sector by high performing staff. Cross
functional career paths uncommon.
Gender Equity Driven by proactive court rulings, ILO guidelines and legislature provisions.
Lack of strategic and inclusion vision spread.
Reservation
System
The central government has fixed 15 per cent reservations for scheduled
castes, 7.5 per cent for scheduled tribes and 27 per cent for backward
communities. States vary in their reservation systems.
8/2/2019 Disser Tition
24/41
24
HRM in Global perspective
IntroductionGlobalization symbolizes the structural making of the world characterized by the free flow of
technology and human resources across national boundaries presenting an ever-changing and
competitive business environment. A vital aspect of globalization is the way diverse
challenges are being faced by nations in an increasingly inter dependent world. No country
can meaningfully progress today without efficiently responding to demands and pressures
generated by international organizations and processes.
As we enter a new millennium, the effects of internationalization now known as
globalization are everywhere apparent. This has played a major role in sustaining the
economic expansion of the global economy in the second half of the 20th
century.
Globalization is seemingly shrinking the planet as barriers to trade are dismantled, transport
and communications costs fall, and global production systems are formed and managed by
giant multinational corporations.
HRM Issues and Challenges in Global Markets
The coming of the 21ST
century poses distinctive HRM challenges to business especially
those operating across national boundaries as multinational or global enterprise. Competing
in global markets entail many factors and centralization of its human resource practices is
certainly vital to improve global competitiveness and empower employees for global
assignments. To achieve success in global marketplace, the challenge of all businesses
regardless of their size is to understand global corporate cultural differences and invest in
human resources. There are certain human resource management issues that are particular for
the global enterprise. The key issues involve staffing policies selecting and retaining talentedemployee, training and development whilst encouraging employees to be innovative and
creative, culture barriers, and legal frame work. Others issues include understanding the
challenges of living and working overseas, performance appraisals from a distance, training
and management development, compensation packages, and labor relations and organized
labor laws.
Some of the key global pressures affecting HRM practices of a firm are:-
Deployment: Easily getting the right skills to where we need them,regardless ofgeographic location.
Knowledge and Innovation dissemination : Spreading state-of-the-art knowledge andpractices throughout the organisation regardless of where they originate.
Identifying and developing talent on a global basis.Dealing with global challenges like these is quite complex. The challenges of HRM doesnt
just come from the vast distances involved(though this is important ).Perhaps the bigger
challenge is in coping with the cultural,political,social and economical differences among the
countries and its people.
8/2/2019 Disser Tition
25/41
25
Competencies for a HR manager
In order to effectively deal with all the changes, HR professionals must develop competencies
that will allow them to carry out their roles, competences like:
Flexibility Team work Communication Decisiveness Leadership Strategic planning Network building Client service orientation Organizational awareness Self confidence Sharing of expertise Global and cultural understanding Multiple language competencies
In addition to increasing and sustaining technological skills relating to communication
developments, HR professionals will may also be required to increase their numerical and
data compilations skills. As increasing demands merge to provide specific measurable results
that prove effectiveness in their area, HR professionals will be required that produce
quantifiable results that prove that their department is delivering specified outcomes based on
the objectives and goals set forth by the organization.
In addition to delivering specific measurable developments, managers will also need to knowwhat contributed to the results declared. This may mean that HR professionals will be
required to be familiar with and administer employee survey and provide for accurate data
compilation and regression analysis.
As a result of the increase in technology, innovation and globalization over the last 20 years,
HR professionals around the world are forced to be more efficient, more effective and more
competitive. They need to respond to the demands of global competitiveness by becoming
more familiar with language skills, cultural awareness and diversity promotion. Additionally,
HR professionals must be committed to continuous learning, being familiar with cutting edge
communication. If HR managers wont pay enough attention to their changing role, serous
consequences could result, including the deterioration or even perhaps the elimination of theHR department.
Strategic HRM as a Response to the Challenges of Globalization
The world has undergone a dramatic change over the last few decades, the forces of
globalization; technological changes have greatly changed the business environment.
Organizations were required to respond in a strategic manner to the changes taking place in
order to survive and progress. Strategic Human Resource Management (SHRM) involves a
set of internally consistent policies and practices designed and implemented to ensure that a
firm's human capital contribute to the achievement of its business objectives. Strategic human
resources management is largely about integration and adaptation. Its concern is to ensurethat:
8/2/2019 Disser Tition
26/41
26
1. Human Resources (HR) management is fully integrated with the strategy and the strategic
needs of the firm.
2. HR policies cohere both across policy areas and across hierarchies.
3. HR practices are adjusted, accepted, and used by line managers and employees as part oftheir everyday work. SHRM practices are macro-oriented, proactive and long term focused in
nature; views human resources as assets or investments not expenses; implementation of
SHRM practices bears linkage to organizational performance; and focusing on the alignment
of human resources with firm strategy as a means of gaining competitive advantage.
The role of people in the implementation of strategic responses has a significant bearing on
the success rate. It is therefore imperative for organization to look at the human issues
involved before implementation of any strategic responses.
Implications for HRM Practices
HR professional competence describes the state-of-the-art HR knowledge, expertise and
skill relevant for performing excellently within a traditional HR functional department such
as recruitment and selection, training, compensation, etc. This competence insures that
technical HR knowledge is both present and used within a firm.
Business-related competence refers to the amount of business experience HR personnel
have had outside the functional HR specialty. These capabilities should facilitate the selection
and implementation of HRM policies and practices that fit the unique characteristics of a firmincluding its size, strategy, structure, and culture .In other words, these competencies will
enable the HR staff to know the company's business and understand its economic and
financial capabilities necessary for making logical decisions that support the company's
strategic plan based on the most accurate information possible.
8/2/2019 Disser Tition
27/41
27
HRM Activities After Globalisation
Recruitment
E-Recruitment
Many big organizations use Internet as a source of recruitment. E- recruitment is the use oftechnology to assist the recruitment process. They advertise job vacancies through worldwide
web. The job seekers send their applications or curriculum vitae i.e. CV through e mail using
the Internet. Alternatively job seekers place their CVs in worldwide web, which can be
drawn by prospective employees depending upon their requirements.
Advantages of recruitment are:
o Low cost.o No intermediarieso Reduction in time for recruitment.o Recruitment of right type of people.o Efficiency of recruitment process.
Outsourcing
In India, the HR processes are being outsourced from more than a decade now. A company
may draw required personnel from outsourcing firms. The outsourcing firms help the
organisation by the initial screening of the candidates according to the needs of the
organisation and creating a suitable pool of talent for the final selection by the organisation.
Outsourcing firms develop their human resource pool by employing people for them and
make available personnel to various companies as per their needs. In turn, the outsourcing
firms or the intermediaries charge the organisations for their services.
Advantages of outsourcing are:
1. Company need not plan for human resources much in advance.2. Value creation, operational flexibility and competitive advantage3. turning the management's focus to strategic level processes of HRM4. Company is free from salary negotiations, weeding the unsuitable resumes/candidates. Poaching/Raiding
Buying talent (rather than developing it) is the latest mantra being followed by the
organisations today. Poaching means employing a competent and experienced person already
working with another reputed company in the same or different industry; the organisation
might be a competitor in the industry. A company can attract talent from another firm byoffering attractive pay packages and other terms and conditions, better than the current
employer of the candidate. But it is seen as an unethical practice and not openly talked about.
Indian software and the retail sector are the sectors facing the most severe brunt of poaching
today. It has become a challenge for human resource managers to face and tackle poaching,
as it weakens the competitive strength of the firm.
8/2/2019 Disser Tition
28/41
28
Performance Management
The world of Performance Management and Appraisals is changing very quickly.
Trend 1 - Performance Management Redefined Now a Valuable Line Management
ToolIn the last 30 years, Performance Management has remained a static process that
consisted primarily of an annual appraisal. Line management viewed the process as
something which the HR department required managers to deliver and complied accordingly.
Today, Performance Management is one of the principle tools executives, line managers, and
employees are able to use to achieve their collective goals. The change in application of
Performance Management has been enabled by software that provides management with a
way to achieve itsoperational and strategic goals
Trend 2Full Time Performance Management
Annual appraisal is rapidly being replaced with Full Time Performance Management.
Full time Performance Management provides a mechanism where both managers and
employees are able to make relevant notes on performance related issues throughout the year.
This function is often referred to as a Performance Diary. When the appraisal is conducted,
both are better prepared and have a full record of achievement (or areas for development and
coaching) throughout the year. This feature also promotes an ongoing dialogue between
managers and employees and ensures that both are on track to achieve their goals for the
year. With manual systems, employees are often ignored until the appraisal, only to be told
they have not performed well for the entire performance period. A negative message and
demoralizing result for twelve months work by the employee.
Trend 3
Less Reliance on Position Descriptions for Performance ManagementIn years gone by, appraisals were often conducted against a Position Description.
Today both HR and Line Management are using Performance Management systems to drive
performance requirements during future performance periods. This is as opposed to using the
traditional position description to drive performance. Reasons for this change are as follows:
a) Position Descriptions are typically static documents. They usually do not reflect what a
manager needs an employee to achieve in a defined period of time, rather they provide a
basic outline of the role.
b) Positions Descriptions are only one element of the Performance Management spectrum.
Most managers and HR practitioners agree that the other mandatory elements of a
Performance Management system are more effective at driving performance than the basic
metrics included in a Position Description.c) Position Descriptions are often far out of date and line management cannot rely on their
integrity to conduct performance appraisals.
Trend 4Low Administration Performance Management
Early automated Performance Management systems were standalone systems that
offered several benefits but still suffered from high administrative input. These systems
required HR to make duplicate data entries for all additions, changes and deletions to staff
because entries had to be made in both the payroll system and the Performance Management
system. Today, Performance Management applications can be fully integrated with the
payroll system which means data entry is only required in payroll. All changes made to
payroll are automatically made to the Performance Management application. This
8/2/2019 Disser Tition
29/41
29
substantially reduces costs related to administration, enabling HR to assist line management
with more strategic issues and matters of compliance.
Trend 5Link to Strategy
Many organisations have now realized the relationship between setting objectives andlinking these objectives to organisational strategy. Performance Management systems are the
vehicle for doing this. Combined with Full Time Performance Diary functionality,
Performance Management is now one of the most powerful methods for effectively directing
organisational effort.
8/2/2019 Disser Tition
30/41
30
Training and Development
Some current trends in corporate training include:
Using non-teachers as trainers:In this case, professional trainers might train a supervisor or mentor to lead employee training
projects. The method is to give teaching skills to those who are most familiar with the work
skills to be taught.
Computer-based training:Online training or self-study can either replace the use of a teacher or be used in conjunction
with classroom instruction.
Personalized training:Employers are increasingly designing personal development plans for individual employees
rather than running large groups through one-size-fits-all training packages. The method
allows employees to incorporate training that interests them and allows supervisors to put
their workers in programs that best suit them.
Just-in-time training:This refers to the concept that training is most effective when an employee can put it to use
quickly. Training on a new computer system, for example, is done just before the system goes
live, rather than months or weeks before.
Expatriate Training
This series of Global Management Training and Development initiatives aims at equipping
executives with the required management skills and knowledge for operating successfully in
a global business environment.
It involves :
Pre-departure Expatriate Training Program
The ability of an international assignee to adapt to the business mentality and workingpractices of the host country is essential to a successful assignment. Failure to adapt can
manifest itself in dissatisfaction, patterns of strategic failure, low work productivity, poor
working relationships, and costly mistakes. Pre-departure training provide expatriates with
the necessary management skills to be able to cope with the business practices they will
experience during an overseas assignment.
It focuses on :-
Global Organizational Development Global Strategic Roles Definitions of Global Managers and Roles HRM//Hiring /Evaluations/Formal Disciplinary Actions
http://www.hrmreport.com/article/Issue-5/Executive-Education/Top-trends-in-e-learning-and-corporate-training/http://adulted.about.com/od/personaldevelopment/a/perdevplan.htmhttp://adulted.about.com/od/onthejobtraining/p/whatsinitforyou.htmhttp://adulted.about.com/od/onthejobtraining/p/whatsinitforyou.htmhttp://adulted.about.com/od/personaldevelopment/a/perdevplan.htmhttp://www.hrmreport.com/article/Issue-5/Executive-Education/Top-trends-in-e-learning-and-corporate-training/8/2/2019 Disser Tition
31/41
31
Sexual Harassment Legal issues Global corporate finance
Pre-departure Global Strategies Program
It provides top executives with the necessary strategic skills and knowledge to be able to run
overseas offices successfully. Specifically, it focuses on:
Strategic Organization Development Understanding Fundamental Theories of Global Strategies Strategic Global Human Resource Management Case Studies based on Corporate & Business Strategies Corporate Financial Strategies
Expatriate on Assignment Training
It identify and review to what extent the organization`s expatriates have acquired the
necessary global skills and knowledge during their assignments.It aims at supporting
expatriates through training. It focuses on:
Identifying and reviewing global competency levels since expatriation. Reviewing Global Management Practices through case studies Critical Incidents focusing on Management Practices Labor Issues
Repatriation Management Program
identifies the level of global competencies which returning expatriates have acquired during
their overseas assignments. It then looks at how these competencies have been utilized within
the organization following repatriation.It helps repatriates to maintain their global
competency levels and to create an appropriate fit between their competency levels and the
organization`s strategic goals.
Overseas Staff Management Training
It develops the future management staff of host and third country nationals. Understanding
HQ strategies and business practices, host and third country nationals will be able to beinvolved in more management decision- making in their organizations. It specifically focuses
on strategic views of management practices.
8/2/2019 Disser Tition
32/41
32
Compensation
Compensation, in its broadest sensethe perspective that managers must take in the global
economyis at the very heart of every organizations performance potential. Compensation
provides the point at which organizational and individual priorities and goals meet,
encouraging the contentment of both parties. It provides the driving force for effectivelyattracting needed human talent, retaining that talent and encouraging the talent in enduring
persistent, enviable and enhanced performance.
While developing the global compensation and benefit composition, HR must deal with many
factors that are not present in a domestic environment. In this article, we will discuss about
some of those factors that unswervingly impacts global compensation and benefits strategies
and general insinuation of those factors on HR professionals.
Factors affecting Global Compensation and Benefits
Developing suitable compensation policies to meet organizational strategies, while efficiently
accommodating different types of employment terms and conditions, poses many distinctive
challenges for global HR practitioners, such as:
1. Dealing with diverse standards and costs of living and multiple currencies, exchangerates, inflation/deflation rates, tax systems and tax rates.
2. Maintaining the suitable balance between global consistency and local significance.3. Addressing organizational business changes (expansions, mergers and acquisitions,
joint ventures, Greenfield operations and investitures).
4. Complying with local compensation practices, laws and regulations.5.
Accommodating varied employee values and expectations stemming from differencesin cultures, languages and communication preferences.
In order to effectively strike a balance among all the above mentioned influences, the HR
professional must be aware of the following:
1) Culture: Cultural differences necessitate understanding that the value of compensation
and benefits programs is in the eye of the beholder. A benefit highly valued in one country
may be comparatively worthless in another. Differences are often rooted in subconscious
beliefs, attitudes and values.
Compensation and benefits strategy recommendations:
1. Engross local contacts to understand usual and traditional compensation and benefitspractices.
2. Circumvent headquarter biases or imitation of HQ country policies and procedures(for example, paying sales commissions in risk-averse cultures or reward and
recognition programs that reward individual contributions in cultures that places
greater prominence on team or group contributions or prefer private gratitude).
8/2/2019 Disser Tition
33/41
33
2) Economic factors: Many differences subsist from country to country, in terms of the:
I. Influence of politics and power
II. Distribution of wealth across countrys citizenry
III. Unpredictability of events (i.e. sometimes rapid changes in rates of inflation,
currency)
Compensation and benefits strategy recommendations:
1. Conduct a risk analysis of economic factors and their consequences.2. Recognize that unofficial sources of authority in a community or region and official
governmental personnel may have large impact on what is considered acceptable.
3. Make allowances for local inflation/deflation or currency fluctuations.4. Create contingency plans to mitigate the risks associated with probable changes in
economic factors.5. Contribute to the local area to support educational facilities, internal training, and
child care or other local services.
3) Taxation: Tax regulations vary extensively from country to country. Some countries
have no income tax, while others have income tax in excess of 50%. Some benefits that are
taxable in one country are not taxable in the geographically adjacent country or vice-versa.
Compensation and benefits strategy recommendations:
I. Comprehend the taxation of cash and noncash compensation, benefits andperquisiteswhat is taxed, at what rates and at what levels.
II. Engage experts in local compensation and benefits laws and practices.III. Distinguish that a benefit may be undesirable, depending on how it is taxed.
4) Competitive labor market: At a broader level, the compensation and benefits
required to magnetize and sustain talent are determined by the aggressive demand for that
talent. However, the nature of the competition for talent may differ across countries and
regions, depending on factors such as:
I. Type of talent sought
II. Geographic scope of the talent marketIII. Industries in which the talent may be found
IV. Mix of remuneration components
Compensation and benefits strategy recommendations:
1. Employ people with similar skills when industry-specific expertise is in short supplyor competition is high; retrain or coach the hires on the job.
2. Lead, lag or match the rates of pay in the relative marketplace based on the skillsneeded, the demand for required talent and the best way to compensate those types of
workers.
3. Recommend suitable blend of pay and benefits that will appeal to current or potentialemployees.
8/2/2019 Disser Tition
34/41
34
5) Laws and Regulations:Laws and regulations impact the remuneration of employeesin many areas, such as:
I. Work hours and compulsory time-off (paid and unpaid)
II. Minimum wage
III. OvertimeIV. Compulsory bonuses
V. Employment at will
VI. Acquired rights
There are remarkable country-to-country variances as well as some regional differences.
Compensation and benefits strategy recommendations:
1. Identify benefits that are government-provided, mandated by the government orchosen by the employee.2. Recognize the differences and similarities in each market.
3. Involve experts in local compensation and benefits laws and regulations.
In addition to above listed factors, the organizational approach to global staffing also
influences the compensation and benefit strategies. Relation between global orientation of the
organization and its impact on global compensation and strategies is discussed here.
1) Ethnocentric: Tight control of international operations; little autonomy; key positions
held by headquarters (HQ) personnel.
Impact on compensation and benefit strategy:
I. This may lead to transfer of headquarters total compensation policies with insufficient
contemplation of local legal cultural differences.
II. Dictates to local country management may result in superficial conformity but actual
rejection of headquarters practices.
2) Regio-centric: Operations managed regionally; communication and coordination high
within the region and less between regions.
Impact on compensation and benefit strategy:
I. There is greater potential for uniformity of remuneration approaches withinregions.
II. The proximity of countries may lead to the perception that remunerationpractices are more similar than they really are.
III. Regional headquarters may suffer blind spots with respect to countrydifferences, leading to ethnocentrism at the regional level.
8/2/2019 Disser Tition
35/41
35
3) Polycentric: Subsidiary treated as own entity; local personnel manage operations; few
promotions to headquarters.
Impact on compensation and benefit strategy:
I. Local cultural and legal compensation norms are more likely to be understoodand implemented.II. Remuneration policies are likely to be steady and incorporated within each
subsidiary.
III. Incentives may tend to maximize achievement of local rather than globalobjectives.
4) Geocentric: Organization seen as single international enterprise; management talent
comes from any location; strategic plan global in orientation.
Impact on compensation and benefit strategy:
I. Local compensation strategies are more likely to be consistent with globalpolicies.
II. A desire for too much global consistency can lead to the imposition ofinappropriate policies at the local country level.
III. The development of consistent and equitable remuneration policies amongglobal managers may be challenging as top-level managers move from one
country to another.
8/2/2019 Disser Tition
36/41
36
CULTURALDIVERSITY
Cultural diversity can take many forms. Ethnicity, language and religion are a few prominent
examples. It is a paradox that employers are supposed to be blind to cultural differences but
must account for them in order to promote harmony in the workplace. The trick is to
minimize differences between employees while simultaneously respecting their diversebackgrounds and lifestyles.
Generally, the differences between people are not as significant as the things they have in
common. Open communication about cultural differences can defuse any tension by creating
an atmosphere of understanding. Cultural differences can prompt curiosity, which can open
the channels of communication.
If employees are focused on a common goal, that of their company, then they will have less
time or reason to dwell on differences between themselves and their colleagues. Building a
strong sense of mission and teamwork is one of the best ways to minimize cultural
differences.
However, accommodating cultural differences can be a difficult balancing act. For instance,
if the company gives one group of employees time off for religious holidays, it may provoke
resentment among members of other groups. Sometimes, cultural traditions are in direct
conflict with business priorities. For example, male members of the Sikh community are
required by their religion to carry ceremonial daggers. This tradition can conflict with
company policies about weapons in the workplace.
Dietary requirements of different cultures and religions are often easily accommodated.
Kosher and halal meals can be ordered for company functions or stocked in flash-frozen formin the company cafeteria.
If a significant portion of the work force speaks a language other than English, it may be
advisable to print memos, company newsletters and other communications in bilingual
editions.
Approaches to understanding Cultural diversity
There are three approaches ,these are
Achieve Global Model for Cultural differences Halls and halls Cross-Cultural classification Hofstede six key dimensions of cultural diversity
I. Achieve Global Model
Achieve Global has given a model to explain cultural differences around the world,describing
four types of cultures that can be observed.
o The Eiffel Tower culture:These are the cultures high on concern for work aswell organisation structure. Under such culture management by job
8/2/2019 Disser Tition
37/41
37
description prevails and the power and status of a person is described by the
title he wears in the organisation. Ex. USA
o The Family Culture: These cultures are the one which are high onorganisation structure but low on concern for work. Relationships form thebasis of such culture. Management is also done by relationships. Ex. India
o The Incubator Culture: The cultures, which are low both on organisationstructure and concern for work come under this category. The management
by love prevails under this culture. This is also known as Silicon Valley culture.
o The Guided Missile culture:The culture with high concern for work but loworganisation structure ,fall under this category. Such cultures have flattened
organisation structure and people try to achieve maximum power and status
in their respective organisations.
II. HALLS and HALLS CROSS-CULTURE CLASSIFICATION
Halls and Halls in 1987 provided another basis for cross-cultural classification. They divided
the world into types of cultures.
o Low Context Cultureso High Context Cultures
LOW CONTEXT CULTURES
Paper work is encouraged.
Loans and project clearances based on
facts in the personal and not on
influence.
No room for emotions
No role of trust in getting the job.
Lawyers are important.
Time is considered precious.
HIGH CONTEXT CULTURES
More reliance on verbal
communication.
Personal background influences
clearance of loan and other project
proposals.
Emotions are given importance
Trust considered important for getting
job.
Lawyers are considered less important.
8/2/2019 Disser Tition
38/41
38
III. HOFSTEDE SIX KEY DIMENSIONS OF CULTURAL DIVERSITY
Hofstede gave a set of six key dimensions to study the diversity across the globe. These
dimensions are :
a. Process-Oriented Vs Result-Oriented :
b. Job-Oriented Vs Employee oriented :
Process-Oriented Culture
Concerned with processes, ie, the way
in which things are done.
Attention is given to procedures.
Taller organisation structure.
Personnel more unionised.
Highly bureaucratic.
Low Employee satisfaction
Result-Oriented Culture
Concerned with outcomes of the
decisions.
Focus is on getting things done.
Flatter organisation structure.
People less unionised.
Less bureaucratic.
Employees highly satisfied.
Job-Oriented Culture
Concerned with getting the job done.
Performance appraisal based on
ROI/profits
Older people
No concern for personal welfare.
Management less formally educated.
Capital investment is high
Employee-Oriented Culture
Concerned with well-being of
employees.
Freedom to employees.
Group decision-making.
Employee concern is important.
Group performance vis--vis budgeted
performance is the criterion for
performance appraisal
8/2/2019 Disser Tition
39/41
39
c. Closed Vs Open
d. Parochial Vs Professional
e. Tight control Vs Loose Control
Closed culture
Unwillingness to accept new members
of work unit.
Unreceptive to new ideas
High formalisation
Less number of female workers
Ex. India
Open culture
Willingness to accept new members of
work unit.
Receptive to new ideas
Low Formalisation
Large percentage of female workers.
Ex. USA.
Parochial Culture
Employees derive their identity from
the organisation for which they work.
Organisation norms control behaviourof the employees both at home as well
as on the job.
Employees have short-run focus and
believe that organisation will exercise
long-run focus.
Ex. Japan.
Professional Culture
Employees derive their identity from
the type of work they perform.
Personal life is kept separate from
professional life
Employees have long-run focus.
Employee believe in job competence
Ex. USA
Tight Control
Have formal policies and rules
Close control of time and money
High degree of repetitive or clerical
work.
Work is process-Oriented
Lot of paper work is involved
Loose Control
Employees tend to be highly educated
Informal setting
Bureaucratic procedures non-existent
Units are result-oriented
Percentage of female workers is kept
low.
8/2/2019 Disser Tition
40/41
40
CONCLUSION
GLOBAL
When it comes to business, the world is indeed becoming a smaller place. More and more
companies are operating across geographic and cultural boundaries. While most
organizations have adapted to the global reality in their operations, many are lagging behindin developing the human resource policies, structures, and services that support globalization.
The human resource function faces many challenges during the globalization process,
including creating a global mind-set within the HR group, creating practices that will be
consistently applied in different locations/offices while also maintaining the various local
cultures and practices, and communicating a consistent corporate culture across the entire
organization.
To meet these challenges, organizations need to consider the HR function not as just an
administrative service but as a strategic business partner. Companies should involve the
human resources department in developing and implementing both business and people
strategies. This type of partnership is necessary if an organization wants to change potentially
inaccurate perceptions of HR and reiterate the HR functions purpose and importance
throughout all its global environment. Organizations will also discover that HR can be
invaluable in facilitating the development of a unifying corporate culture and finding and
cultivating much needed leadership talent around the world.
The process of globalizing resources, both human and otherwise, is challenging for any
company. Organizations should realize that their global HR function can help them utilize
their existing human talent from across multiple geographic and cultural boundaries.
International organizations need to assist and incorporate their HR function to meet the
challenges they face if they want to create a truly global workforce.
INDIAN
The World Competitiveness Report rated Indias human resource capabilities as being
comparatively weaker than most Asian nations. The recognition of world class human
resource capability as being pivotal to global success has changed Indian HRM cultures in
recent years. While the historical and traditional roots remain deeply embedded in the
subjective world of managers, emphasis on objective global concepts and practices are
becoming more common. Three very different perspectives in HRM are evident. Firstly,
Indian firms with a global outlook; secondly, global firms seeking to adapt to the Indian
context; and thirdly, the HRM practice in public sectors undertakings (PSVS). As the Indianeconomy becomes more globally linked, all three perspectives will move increasingly
towards a cross verging strengthening. Interestingly, within the national context, India itself
is not a homogenous entity. Regional variations in terms of industry size, provincial business
culture, and political issues play very relevant roles. The nature of hierarchy, status, authority,
responsibility and similar other concepts vary widely across the nations synerging system
maintenance. Indeed, organisational performance and personal success are critical in the new
era.
8/2/2019 Disser Tition
41/41
BIBLIOGRAPHY
Search engine: Google & Yahoo
Sites referred: www.ddiworld.com www. rphrm.curtin.edu.au/2007/issue2/india.html www.123helpme.com www.universalteacherpublications.com www.essayforum.com
www.managementheaven.com/hrintro1/#
managementhelp.org/humanresources/index.htm
Research Papers Referred :
The Globalization of Human Resource Practices Survey Report, by- Sheila M. Rioux, Ph.D. andPaul R. Bernthal, Ph.D.
Human Resource Management in India: Where From and Where To?, by-Samir R.Chatterjee
The History of Human Resource Management, by-Owen Simpson Strategic Human Resource Management, by- Kunal Pathan All About Human Resources and Talent Management, by- Carter McNamara, MBA, PhD
Books Referred :
International Human Resource management- A global Perspective ,written by S.K. Bhatiaforeward by Dr. Abad Ahmad
Human Resource Management ,11th Edition ,written by Gary Desseler & Biju Varkkey