Disser Tition

8/2/2019 Disser Tition

1/41

DISSERTATION

2009-12

Name: Rishabh Dhar (A37)

Enrol No. : A3906409269Faculty guide : Mrs Kirti Mankotia Singh


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


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


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


5/41

5

7 Conclusion

8 Bibliography


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.


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.


8/41

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


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.


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


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.


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.


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+management


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


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.


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.


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.


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


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.


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.


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.


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


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.


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.


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:


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.


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.


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


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.


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/


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.


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).


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)


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.


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


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.


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.


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.


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.


35/41

35

3) Polycentric: Subsidiary treated as own entity; local personnel manage operations; few

promotions to headquarters.


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.


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.


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


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.


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


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.


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.


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

Documents

Disser Tition