Everything you need to know about Human Resource Management in India. India has witnessed a revolution in the field of HR; from playing a supportive role to being a strategic partner in the growth of businesses.
It has transformed itself from being merely Personnel Management— which maintained records and ensure statutory compliances, while doing the bare minimum to keep employees satisfied; to being an integrated part of the corporate.
The HR function of 21st century India has made a major transition from being ‘behind-the scenes’ supportive appendage to becoming the critical differentiator in business.
Rapid globalization has made companies realize that people are the key to the growth of business. This has led to companies routinely using their innovative HR practices as their USP (Unique Selling Proposition) to keep up with the times of a rapidly changing labour scene.
In this article we will discuss about HRM in India. Learn about:-
1. Evolution and Growth of Human Resource Management in India 2. Development of Human Resource Management in India 3. Practices 4. Future/ Changes in the Modern World 5. Major Barriers.
HRM in India: Evolution, Development, Practices, Future and Barriers
Human Resource Management in India – Evolution and Growth: Management of Work-People in India—Historical Perspective
Evidences of production activities by craftsmen and artisans such as weavers, carpenters, leather- workers, jewellers and potters are found even during the later Vedic period (1000 BC-600 BC). These craftsmen and artisans generally worked independently, but many of them were patronised by rulers and local chiefs. They often engaged hired labourers and slaves who mainly belonged to the Shudra Varna. All of them had to abide by the dictates of the rulers and local chiefs.
The Mauryan period witnessed gradual flourishing of trade both within the empire and abroad. This gave an impetus to the production of a variety of goods by craftsmen and artisans, who started employing an increasing number of hired labourers and slaves and who had to work under full control of their masters. Slaves were also employed in agriculture and allied activities, mining, metallurgy and certain other industries owned by the state.
An officer of the state looked after the employment conditions of the slaves. Forced labour was also rampant on a wide scale, particularly in establishments owned by the state, and also in other employments under the orders of the rulers, officials of the state or local chiefs. Forced labour was also widely prevalent in agriculture.
The craftsmen often formed their guilds, which did not only regulate the quality and quantity of products and their prices, but also laid down the rules concerning the terms and conditions of people employed. But, these had to be in conformity with royal decrees, prescriptions of the law-givers and prevailing shibboleths.
Kautilya, for example, fixed wages of artisans and also those of hired labourers (karmakaras) and slaves (dasas), which, in practice, were very low. He ordained that slaves and hired labourers under the employ of the state should be given “particles of rice and bad liquor.” Forced labour was also widely prevalent during the period.
The state of affairs materially changed during the period witnessing decline of the Mauryan empire. Frequent foreign invasions had resulted in the establishment of close contacts between traders of India and those of the western countries. Besides, the period also witnessed an appreciable improvement of communication through both land and sea routes.
With the flourishing of trade and expansion of markets, the demand for Indian goods increased manifold. As a result of these developments, the number of work-people including craftsmen, artisans and slaves swelled. Craftsmanship also involved a great deal of specialisation. There are evidences of more than 36 kinds of workers living in Rajgir alone, and as many as 75 occupations connected with various kinds of production.
By the end of the Mauryan empire, the craftsmen and artisans, many of whom also belonged to the Shudra Varna, had substantially gained in wealth and status. The craft guilds also acquired strength and secured a certain amount of independence. The membership of a guild provided security to their members and enhanced their status. The guilds fixed rules of work, quality and quantity of products, and fixed their prices.
The behaviour of the members of the guild was controlled through a guild court. The customary regulations of the guilds had the force of law for their members. Many craftsmen working independently of the guilds also trained their family members and relatives so that the expertise in the craft could be carried forward to coming generations.
Besides, there also had been the practice of engaging apprentices who, on acquiring sufficient skills after a prolonged period of training, themselves became master craftsmen. However, in most cases, the activities of the craft-guilds and the conditions of employment of working hands were under rigid control of the state.
The conditions of labour prevalent at the disintegration of the Mauryan empire continued to exist during early Gupta period also. However, during the years following, certain developments adversely affected the status and conditions of craftsmen and other categories of workers. The Gupta emperors successfully repulsed a number of invasions and drove the invaders away from the country.
As a result, contact between India and north-western countries appreciably declined, and there was a substantial down string in foreign trade. Even the mobility of craftsmen and artisans from one part of the country to another was adversely affected. These conditions led the craftsmen and artisans to confine their activities in the local areas.
The position in the south was, however, different. There was a big demand for linen goods, velvets, cotton cloth, shoes, fancy earthenware and some other articles manufactured in that region in both eastern and western countries. Many craftsmen and artisans were in the employ of wealthy merchants who paid handsome remuneration to them. Those, who were independent, received handsome prices for their products.
During the Gupta period, the rigours of state control over craftsmen and their guilds prevalent during the Mauryan period were relaxed. The institution of slavery weakened, but the practice of forced labour covering all kinds of workers and work had become a general feature. Serfdom also continued to exist, especially in agriculture.
In this process of change, the craft-guilds increasingly became independent and they started playing the main role in determining the terms and conditions of employment of the people engaged by them or their members. The craftsmen, who did not belong to a guild, managed their work-people on their own, and unilaterally determined their terms and conditions of employment, which were more liberal than those prevalent during the Mauryan period.
In general, craftsmen and artisans were enjoying improved status, a substantial measure of independence and economic affluence during the period witnessing the end of the Gupta Empire.
The period following the decline of the Gupta empire till the establishment of the Muslim rule (about 1000 AD), the country witnessed frequent internal dissensions, uprisings and wars for supremacy among different dynasties, and somewhat regular foreign invasions from the west. These conditions led to political and economic instability in the country.
Industries, arts and crafts tended to be localised, and state control over workers and craft guilds substantially weakened. However, the policies and practices associated with managing various categories of labour prevalent during the Mauryan and Gupta periods continued to exist in an appreciable measure in this period also.
In the south, especially during the Chola rule, workers engaged in certain industries, crafts and arts such as ship-building and navigation, sculptures, textiles, jewelleries and ivory work enjoyed more freedom, recognition, better treatment and economic affluence mainly on account of flourishing of trade between India and South-east Asia and even China.
There had also been considerable technological advancements leading to an increase in the demand for highly skilled workers with specialisation in particular crafts and arts. These workers often congregated together, formed their guilds and organisations and bargained for improved terms and conditions of employment.
The Muslim and Mughal periods witnessed a series of wars, battles and uprisings, but trade, industries, arts and crafts continued to grow. A number of cities emerged in different parts of the country; and urban and money economy spread. There was also appreciable improvement in communication through both land and sea routes.
As a result of flourishing of trade and business and development of industries, demand for various categories of labour substantially increased. However, approaches towards managing them varied, depending mainly on the attitude and policy of the rulers. In some cases, their policy was very harsh, whereas in others, it was liberal.
The forms of labour prevalent during the period and the manner of managing them are briefly described below:
Slavery and forced labour, in one form or the other, was rampant on a large scale throughout the period. The manner of managing them, however, varied. For example, those who invaded the country with the motive of plundering gold, silver and other valuables, and spreading Islam, captured and enslaved even the highly skilled artisans and craftsmen, and carried them away to their own lands, where they were forced to work under oppressive and tortuous conditions.
Those who established rule in the country treated them differently. The slaves were employed mainly on hard manual work such as carrying of heavy loads, particularly stone pieces, digging of soil, rowing vessels and so on, and were subjected to harsh treatment and physical tortures for neglect of work and disobedience.
The treatment meted, out to certain other categories of slaves such as those engaged in domestic work, personal services of the rulers and officers, maintenance of gardens and similar work was gradually liberalised. However, they had to work under the strict control of their masters. In exceptional cases such as saving the life of their masters, loyalty, good behaviour and personal achievements, slaves could also be set free.
There are also evidences of slaves being promoted to high offices in the state services, and also of those having founded their own independent kingdoms.
There were special markets where slaves could be sold and purchased. The European traders, particularly the English, Portuguese, Dutch and French, who established, later in the period, so called factories in some parts of the country with the permission of the native rulers, were extensively engaged in this nefarious trade.
These factories were not manufacturing units. They were primarily enclosed and fortified centres of the traders’ business within which the warehouses, offices and quarters of the employees of traders or their company were located. The East India Company, which had established a number of such factories in different parts of the country, purchased Indian slaves at very cheap rates and on a wide scale and transported them to European and American markets for sale.
b. Free Labour:
Free labour during the period consisted mainly of skilled craftsmen, artisans and hired labourers. Their number increasingly swelled with the flourishing of trade with European, East Asian, West Asian and African countries. Of the various products, the demand for cotton and silk textiles was overwhelming. The centres of textile industry were located in almost all parts of the country, especially in Bengal, Gujarat, U.P., and Madras (now Tamil Nadu).
Other manufactured products in high demand in both foreign and domestic markets comprised the following – gold and silver jewelleries, metallic products including armaments, leather goods, ivory items, sugar and woollen textiles. Most of the manufacturing establishments were owned by wealthy craftsmen themselves who, generally, led a luxurious life.
Many of them employed skilled and unskilled workers on remuneration. A few prosperous traders had their own establishments. Ownership of a few industrial establishments such as ship-building and war-weapons was vested in the state. Production of many other goods remained generally localised and catered to the needs of the local people. In the local units, the craftsmen and artisans managed everything themselves with the help of their family members.
The basic features of management of work-people in the manufacturing establishments during the period were as follows – (i) existence of personal relationship in the work-environment with an element of human treatment of employees; (ii) provision of lucrative remuneration and monetary incentives to hired employees for improving quality and quantity of products; (iii) opportunity for development of skill and vertical advancement; (iv) sympathetic guidance but effective supervision; (v) differential treatment of different categories of workmen based mainly on the extent of their contributions, loyalty and sincerity at work and (vi) provision of amenities, and help in the event of eventualities.
The period intervening the decline of the Mughal empire and establishment of the British rule witnessed the following – (i) frequent fights among traders of European countries—the English, the Portuguese, the Dutch and the French—for expansion of their trade and territories in the country; (ii) large-scale plundering of Indian wealth and its drainage to foreign lands; (iii) establishment of supremacy of the British East India Company in the Indian market and its subsequent emergence as a political power in the country and above all (iv) a substantial decline of Indian arts and crafts and the consequent pitiable conditions of Indian craftsmen and workers. Slavery was, however, abolished in 1843 under the Indian Slavery Act of that year.
2. Advent of the British Rule till Independence and Emergence of Formalised System of Labour/Personnel Management:
It has been rightly said, “India was, for thousands of years, a highly industrialised country in the sense that it produced with great skill and in large quantities goods and products which not only met its own requirements but were exported to half of the world, from Europe to China.”
However, industrialisation in its modern form began in the country in the middle of the nineteenth century, that is, a century after industrial revolution had set in England. At the beginning of industrialisation in the country, the British rule had come to be firmly established.
The first textile factory in the country was set up in 1854 in Bombay, and by 1875, a number of such factories came to be established in different parts of the country. The years following witnessed a gradual growth of factories in a few other industries such as jute, iron and steel, leather and paper. The process accelerated after the First World War and acquired substantial potential after the independence of the country in 1947.
Presently, India has a large congregation of a variety of industrial undertakings of different sizes and is reckoned as an industrially advanced country of the world. In addition, a number of large-scale commercial, business and other organisations cropped up in the country at regular intervals. All these developments have come to give employment to millions of workers in different sectors of employment.
Basic Features of Initial Labour/Personnel Management:
For a substantial period of the British rule in the country, many reputed undertakings in industries such as coal-mining, railways, jute and cotton textiles and engineering were owned by the Britishers. They were also dominant owners of plantations and a number of commercial and other business organisations. Top positions in management in the British-owned undertakings and in some Indian establishments such as Tisco were held by the Britishers.
The British employers and their managerial personnel had brought with them their own experiences of managing work-people. They were also aware of the statutory requirements imposed under labour laws such as Factories Act, Workmen’s Compensation Act, Mines Act, Truck Act (identical to Payment of Wages Act in India), and Trade Union Act, which were also subsequently enacted in India on the British pattern.
In the early years of its colonial rule, the British government adopted a discriminatory policy in regard to labour matters. Quite a few labour laws and regulations such as the Bengal Regulations, Tea District Emigrant Labour Acts and Workmen’s Breach of Contract Act were intended primarily to promote the interest of the British employers.
Despite the discriminatory policy of the alien government in labour matters, the style of managing work-people in many undertakings owned by Indian employers continued to grow on the British pattern. However, most of the Indian employers adopted a pragmatic approach towards managing their work-people.
Initially, in both British and Indian-owned establishments, the line managers themselves handled labour matters.
However, with the growing size of work-force in particular establishments, complexities involved in ensuring compliance with the provisions of labour laws and regulations, and the conditions emanating from strengthening of unions under able leadership, rising political consciousness among workers and the need of industries to increase output and reduction of labour cost, it was very difficult for the line managers to manage labour matters effectively on their own.
All these conditions led to the realisation of the need for establishing separate labour/personnel department to deal exclusively with labour matters and render advice and assistance to the line management. Ultimately, labour/personnel departments came to be set up in a number of industrial establishments, especially in the large-scale units.
The main matters initially dealt with by the department comprised the following – recruitment, ensuring compliance with the provisions of labour laws and regulations, schedule of working hours, shift-working, wage-payment, adjustment of work-force and welfare amenities for the workers.
The main features of labour/personnel management in the initial stages of its growth in the country were as follows – authoritarian control, strict supervision, provision of some incentives to increase production, emphasis on discipline and general indifference towards human aspects.
However, the state of affairs did not remain static for a long period. The policies and programmes relating to labour/personnel management required revamping and modification on account of certain developments potently concerned with labour.
The history of labour movement in the country reveals that, moved by the pitiable conditions of workers, particularly in the textile industry, a few philanthropists and social reformers, including N. M. Lokhande, G. K. Gokhale and Bal Gangadhar Tilak, demanded adoption of measures for ameliorating the working and living conditions of textile workers.
Later, as a result of pressures from eminent personalities associated with trade union movement of the country, the employers of a number of industrial establishments had to modify their approach towards workers and give due attention to human aspects in their enterprises. Without prejudice to the contributions of others, a particular mention may be made of the role played by Mahatma Gandhi, Subhas Chandra Bose, Lala Lajpat Rai, N. M. Joshi, S. A. Dange and V. V. Giri.
It is not that the employers in the country were always pressurised to adopt measures for ameliorating the conditions of their employees. There are examples wherein employers themselves realised the importance of welfare measures in their enterprises.
For example, Sir Dorabji Tata, the eldest son of Jamshetji Nusserwanji Tata, at the inception of Tisco, stated, “The welfare of the labouring classes must be one of the first cares of every employer. Any betterment of their conditions must proceed more from the employers downward rather than be forced up by demands from below, since labour-contented, well-housed, well-fed, well-brought up and generally looked after not only is an asset and advantage to the employer, but it also serves to raise the standard of industry and labour in the country. In looking after the labour of today, we are also securing a supply of healthy and intelligent labour for future.”
Tisco established its “welfare department” in 1917 and had made medical facilities available to their workers even earlier. There is also evidence of Empress Mills situated at Nagpur giving due attention to human aspects of industry as early as the 1880s and introducing schemes of safety at work, provident fund, gratuity, recreation facilities and incentives to promote productivity and reduce absenteeism.
A few textile mill-owners of Ahmedabad had also adopted some measures for the welfare of their employees in the early decades of the twentieth century.
Before the formation of interim government in 1946, certain new developments having a bearing on personnel/human resource policies and programmes in industries had taken place in the country. Notable among these were as follows – (i) growth of strong trade unions at different levels under able leadership; (ii) substantial increase in state intervention in labour matters, particularly through legislation; (iii) improvements in transport and communication facilitating greater mobility of labour and (iv) growth of a huge labour force with diverse skill-mix.
As a result of these developments, the responsibilities of the personnel/labour department in industrial undertakings were considerably enlarged.
The period 1946 onwards witnessed some new and major developments in the country, which enlarged the areas of operation of the personnel departments and gave a thrust to the adoption of the concept of “human resource management.”
More notable among these are as follows – (i) proclamation of five- year labour programme of action in 1946; (ii) adoption of the Indian Constitution, which contains significant clauses pertaining to labour/human resources; (iii) enactment of a series of labour laws requiring industrial establishments to comply with their provisions; (iv) strengthening of workers’ and employers’ organisations and growth of collective bargaining and tripartite deliberations, and (v) impact of modern theories and postulates in the field of human resource management.
These developments are discussed in some detail below:
The five-year labour programme of action adopted by the interim government in 1946 inter alia stipulated the following – (a) enactment of new labour laws and amendment of some existing ones relating to working conditions in industrial establishments; (b) provision of health insurance, social security and welfare amenities for industrial workers; (c) strengthening of labour administration and enforcement machinery; (d) reformation of the system of recruitment, and expansion of schemes of industrial training; (e) standardisation of terms of services and evolving fair conditions of service and (f) constitution of works committees in industrial establishments.
ii. Adoption of the Indian Constitution (1952):
The Fundamental Rights enshrined in the Indian Constitution assert the following – (a) right to equality directing the state not to discriminate against any citizen based on religion, caste or race and guaranteeing equality of opportunity in employment in any office of the state (Art. 16); (b) right to freedom including freedom of speech and expression (Art. 19); (c) right against exploitation prohibiting traffic in human beings, child and forced labour (Art. 23).
The Directive Principles of State Policy enjoins upon the state to adopt measures for – (a) promoting welfare of the people and establishing social order based on social, economic and political justice(Art. 38) ; (b) securing adequate means of livelihood for citizens, equal pay for equal work, protecting health and strength of workers and protecting tender age of children and prohibiting their exploitation(Art. 39) ; (c) securing right to work and public assistance in cases of unemployment, old age, sickness and disablement(Art. 41); (d) ensuring just and humane conditions of work and maternity protection (Art. 42); (e) securing to all workers a living wage, and conditions of work ensuring a decent standard of life (Art. 43) and (f) securing participation of workers in the management of industrial establishments. (Art. 43A)
Fundamental Rights are justifiable. Directive Principles of State Policy, although not justifiable, are fundamental in the governance of the country and it is the duty of the state to apply these principles while making laws. Most of the important labour matters are in the Concurrent List on which both the central and state governments can make laws.
iii. Enactment of a Series of Labour Laws:
The period also witnessed the enactment of a series of labour laws covering a wide range of subjects concerning workers in industrial and other enterprises. In addition to it, there are many other central and state labour-enactments. Some of the state laws are states’ own enactments, whereas most of them supplement central Acts. These laws have brought several labour/human resource matters under the domain of state intervention.
The relevance of these laws to the growth of human resource management in the country is explained below:
(a) Labour laws enacted in the country after the end of the British rule have given a new orientation to manpower management in industrial and other organisations by replacing the authoritarian and arbitrary approach towards their work-people, a normal feature of the colonial rule, by progressive and democratic approach guaranteeing certain basic human rights and rights of labour.
(b) These labour laws have resulted in enlargement of the functional areas of personnel management by covering a variety of aspects concerning workers and setting up minimum standards in many of these areas. The managements are free to improve upon the standards set under labour laws.
(c) Many issues which could have been the bone of contention between management and labour have been brought under the coverage of law, which might, otherwise, have arisen in the absence of statutory regulation.
(d) The requirement of appointing welfare officers in factories and mines of prescribed size reflects the desire of the government to recognise the need for and importance of giving due consideration to human aspects in the industry. The duties of welfare officers in respect of factories are prescribed by the state governments, whereas those in mines are laid down by the central government.
In practice, there is no substantial difference in the duties of welfare officers prescribed by the state and central governments. These relate to – (i) establishment of harmonious industrial relations, (ii) grievance settlement, (iii) promotion of productivity and efficiency, (iv) render assistance in the formation of joint committees and supervising their work; (v) help management in the grant of leaves to employees and guide the employees in the matter, (vi) advise management in regard to both statutory and voluntary labour welfare facilities and supervise their implementation and (vii) suggest measures for improving living standards of workers and their well-being.
(e) Ensuring compliance with the provisions of a wide variety of labour laws necessarily requires strengthening of the organisation for personnel functions.
(f) Quite a few labour laws, such as Minimum Wages Act, ESI Act and Industrial Disputes Act, provide for the association of representatives of both employers and workers in the implementation of their provisions.
(g) Labour laws have also tended to provide guidelines and direction to management in regard to the formulation and implementation of their personnel/human resource policies and programmes.
Human Resource Management in India – 2 Phases of Development: Before Independence and Post Independence Period
During 1990s, there was emergence of a new human resource management, especially as a result of the globalisation and liberalisation of the economy. The economy and the policy of India was fast changing in the wake of the liberalisation policies mooted by Rajiv Gandhi Government and formalised by the Narasimham Rao Government.
Consequently the form and the concept of capitalist relations between the various factors of production are undergoing a change. What has emerged is a new era in human resource management. As a result of the liberalisation, industrial relations and Human Resource Management (HRM) have acquired strategic importance.
The success of new policies depends to a large extent on the introduction of new industrial relation and human resource policies at the national and enterprise levels. Some pressure for change has already been witnessed in the IR and HRM areas. The actors of the system now realise that neither the economy nor the industrial enterprise can survive by clinging to their rigid postures.
Indian industrial scenario is passing through a turbulent phase at present. The liberalisation of economy is beginning to make wide ranging and far-reaching impact on how we manage our resources, technology and people. As we enter into the age of stiff competition from global giants, quality of product and customer satisfaction become prime factor in organisational success.
To get the best performance from the people, one needs to recruit well, place appropriately, train and develop consistently, compensate adequately and create and maintain an organisational culture which motivates innovation and enterprise. Truly speaking in the coming years the human resource specialist will be at a premium.
The development of Human Resource Management in India can be studied under two phases:
1. Appointment of Labour Welfare Officers:
Before Independence nothing commendable was done either on the part of employers or on the part of government for the development of industrial relations. The development of Human Resource Management in India was as late as in 1920 when labour welfare activities were initiated by some Indian business enterprises like Tata Group, British India Corporation, Calico Mills, Empress Mill, etc., who appointed labour welfare officers to look after the interest of the working people and of the enterprise in relation to the human problems.
2. Industrial Unrest:
The year 1920 was the year of industrial unrest. Employers and the government took various steps to resolve better industrial relations including the recognition of trade unions. But satisfactory progress in industrial relations could not be seen on the whole.
3. Governmental Efforts:
Before and during World War II, the government (central and states) was the leading agency in India to develop and improve the labour relations in Indian industries. In 1934 with the efforts of Bombay Government, the appointment of the labour welfare officers was made compulsory in industries employing 500 or more workers throughout Bombay (now Mumbai) to resolve the labour disputes with labour commissioner as the chief conciliation officer. Industries in other states also appointed the labour officers.
4. Royal Commission on Labour:
In 1939, Royal Commission on Labour recommended the appointment of labour officers so that the labour problems might be reconciled amicably. The Union Government convened a tripartite labour conference to discuss the extent of labour laws in Indian industries, to evolve a system of grievance handling and to establish conciliation system in industrial matters.
II. Development in Post-Independence Period:
1. Labour Legislations:
Government of India did commendable work in this direction. On the recommendations of the Central Labour Investigation Committee 1946, several labour legislations were enacted, such as Labour Disputes Act, 1947, Industrial Employment Act, 1946, Factories Act, 1948, etc.
The Factories Act, 1948 provided the appointment of a labour welfare officer in every industry employing 500 or more workers for the purpose of helping the management in providing welfare measures to the workers as enunciated in the Act.
Now the urgency of appointing human resource or labour officer is being felt even in such industries where there is no legal compulsion to appoint welfare officer as there is a need of such agency to guide the management in tackling the ticklish labour problems by providing specialised services.
The services of these labour welfare officers are not up to the mark even now because of their taking a biased view. While dealing with the workers, they consider themselves as agents of management.
The Government arranged for the training of workers and management of human resource in India and started several training centres and institutes for imparting training in industrial relations. In 1949, for the first time in independent India ‘Xavier Institute of Labour Relations’ was established.
Several other institutions were started later on such as Indian Institute of Personnel Administration, Kolkata, Indian Labour Management Institute, Mumbai, Institute of Industrial Relations, Bangalore, Federation of All India Labour Welfare Officers, and Indian Productivity Councils, Shri Ram Centre for Industrial Relations and Human Resources at Delhi.
3. Reforms during Emergency:
In the middle of 1975, the government proclaimed the state of emergency in India and took several administrative steps to eradicate the system of bonded labour, to give momentum to the scheme of workers’ participation in management in Indian industries and to extend the scheme of apprenticeship.
4. Post-Emergency Labour Legislation:
In 1978, a comprehensive Industrial Relation Bill was introduced in Parliament in order to improve the labour relations in industries through collective bargaining by consolidating Trade Union Act, 1926; Industrial Employment (Standing Order) Act, 1946 and the Industrial Disputes Act, 1947. But due to dissolution of Lok Sabha in 1979 the bill could not be passed.
In 1981 the President promulgated an ordinance giving powers to the Government to ban strikes in essential services for six months. The essential services include Railways, Post and Telegraph, Telephone, Docks, Airports, Banks, Petroleum, Water and Sewage Disposal, Defense and Hospitals.
The Government was empowered to declare any service as an essential service. In 1982, Government amended several labour laws, including Industrial Disputes Act, Industrial Employment (Standing Order) Act, 1946. The Government also amended the Employees State Insurance Act in 1984.
Human Resource Management in India – Opportunities and Challenges
India is the world’s favorite outsourcing destination. India’s share of the global offshore outsourcing market for software and back-office services is 44%. According to the National Association of Software Companies (Nasscom), India’s premier trade body of the IT software and services industry, technology and IT services exports in India were worth $17.2 bn (￡9.5 bn) in the year ended March 2005, a rise of 34.5% over the previous year.
A further expansion of 30% in exports is predicted in the next twelve months, to reach $22.5 bn. The US accounts for 68% of Indian exports.
1. Outsourcing in traditional areas like customer care, financial services, manufacturing, IT etc., is growing.
2. Large multinational companies are investing in captive BPO units in supplier countries in different locations, to reduce risk and maintain control over quality.
3. Outsourcing has become more challenging. Customers are looking for business process excellence, speedy access to market, improvement in quality, benchmarking to world- class standards.
4. In the increasing scenario of global competition there is pressure mounting on margins from emerging lower-cost outsourcing destinations.
5. Risk factors involved in outsourcing like terrorism and war, disaster and disease make formulation of contingency plans a necessity.
6. For the past two decades, China has been growing at an astonishing 9.5% a year and India by 6%. They are influencing the global economy and leading the outsourcing revolution.
1. Outsourcing expenditure will continue to rise.
2. More countries will find attractive outsourcing options, creating a multi-polar world. The European Union markets will expand their offshoring programs, while Japan will increasingly look to China for its needs, whereas leading on the front will be UK and US.
3. Clients will have greater hold over driving and designing deals.
4. The interlinking of the supply chains as a result of outsourcing will create stability as companies pressurize governments to avoid wars.
5. Unexpected occurrences like war, terrorism, disease, natural disasters and economic disruption can throw a wrench in the works.
6. The rising price of oil will cause oil consuming countries like the USA to be less competitive relying more on India and China for outsourcing.
7. India will show excellence in Services that require advanced English like Knowledge Process Outsourcing (KPO).
8. Political backlash over outsourcing is likely to reduce over time as companies continue to reap the benefits of offshoring.
9. Technological power will shift from the West to the East as India and China emerge as big players in the global outsourcing market.
10. It is expected that by 2015 China will be No. 1, India No. 2 in the global top five outsourcing destinations.
11. Vendor focus will shift from basic skills, processes to domain knowledge, transition challenges, HR issues and governance.
12. Regional outsourcing hubs will develop to enable companies to minimize risk and leverage cultural and linguistic compatibility.
Opportunities for India:
India can collaborate with other countries to create the business environment while providing its domain knowledge and technological expertise for successful outsourcing. For example- TCS has a Latin American arm based in Mumbai, India which serves an insurance client in Chile with a center in Uruguay as a near-shore location.
Knowledge Process Outsourcing (KPO) may soon be the biggest revenue generator in India as BPO companies move up the value chain in their service offerings.
i. Product Innovation:
Now Companies are investing more in innovation and new product development, examples include companies that have invested in R&D in India are Cisco Systems, Motorola, Hewlett-Packard, Google General Motors Corp. and Boeing Co among others.
In pharmaceuticals, India has the opportunity of co-development and ownership of new patented drugs through drug research, clinical trials and manufacturing. Indian pharma major Ranbaxy has an agreement with MNC GlaxoSmithKline to commercialize compounds they develop together.
2. Legal Outsourcing:
India’s qualified lawyers with experience in the British legal system and knowledge of English can offer paralegal support, legal support and patent services. Few Indian companies which are affiliated with American law firms are now able capture a tiny piece of the American market.
India can provide high-quality engineering services in the fields of:
i. Mechanical and Electronic engineering— analysis and design, embedded software.
ii. Plant Design, Process Engineering.
iii. Plant Automation Services.
India can offer management services for IT infrastructure, IT security and maintenance, thus, this sector presents great potential.
We are in the initial stage where payroll processing and basic accounting task is being done for large American companies. However, in the latter stage soon a full range of accounting and tax services will be provided by Indian companies.
Outsourcing Options for India also exist in the field of Financial Research, content development, publishing, web services; human resource outsourcing: recruitment, training, education and many others.
i. In the coming years, China will replace India in the global ITES-BPO industry.
ii. India’s appalling Infrastructure will continue to be a drag on the potential of India paving way to other countries for the competitive advantage.
iii. Other competing countries providing cheaper outsourcing options will provide tough competitors to India—East Europe, Latin America, South Africa.
iv. The education system needs to transform to enable people acquire skill sets that match industry needs.
v. The transition to knowledge processing will be a much bigger challenge for the Indian companies as typical college graduates may not have knowledge or background to understand global issues required by this type of service.
Flexitime allows an employee to select work schedules while keeping in mind the organization’s need to maintain work cover. It means an employee can choose working hours which are convenient, thus easing out the stress of commuting to work.
Indian employers are slowly realizing that allowing flexitime ensures that employee time is concentrated where the business actually needs it. The employees now are opting more and more for “flexitime”. This flexible working strategy is vividly acknowledged as “no-more-late- excuses-to-boss”. Flexitime let a person works according to its biological clock. It means that employees could go to the office from the time they fell doing so.
Because of this privilege, employees could avail of some “breathing spaces” away from the pressure of office works and deadline and the psychological pressure of presence of their boss. Flexitime is deemed to be an important factor to prevent women’s turn-over and provide a useful “trick” for them to re-enter the labor force after giving birth or caring for an old parent.
Kinds of Flexitime:
Flexitour – Employees can select starting and stopping time for work independently and adhere to these timings regularly.
Flexitime – Employees can work during specified core hours, but can make up the rest of work hours as per their wish.
Gliding Schedule – Employees must meet the basic requirement of eight hours a day and 40/48 hours a week. Within that, you can opt to change your arrival and departure time every day.
Variable Day – Employees must meet the basic requirement of 40 or 48 hours (depending on the organization) a week but can vary the number of hours one may work each day.
Maxiflex – One can decide this kind of flexible work schedule which contains the least number of core hours and offers maximum flexibility.
Advantages of Flexitime in Marketing:
Prudential ICICI has shifted its work time from 9 am – 6 pm to 11 am – 8 pm. “There is no point in calling employees at 9 am” says Vasant Sanzgiri of the Human Resources Department of the organisation. “Their work depends on customer convenience and actually begins only at 11 am. This way a lot more work gets done than by sticking to the 9 – 6 schedule.”
a. Creating Goodwill:
Sanzgiri claims that benefits of flexibility observed in terms of time are tremendous too, especially when most of the personnel in this department are female. “The staggered timing lets them avoid the rush hour and commute in comfort,” he says. “And the late hours give them the flexibility to complete their housework before coming to work.”
b. In Media and Advertising:
In the field of media and advertising, flexitime has always been followed. A large number of public relations firms allow flexitime in India. One of these is Prahlad Kakker’s agency, Genesis which has been following flexitime for years now. Kakker says that although the official time to start work is 9.30 am, very few of his employees come in before 11.30 am.
“My office has people coming and going at different times of the day,” he explains” each employee has his own individual responsibility to fulfil, for which he/she chooses his/her own time of working. I attract talent by maintaining flexibility. I have no objection to their schedules as long as they deliver the goods as and when I want.”
Though not very popular in the field of education, the system is incepted in some educational institutions. Colleges like the SNDT at Ghatkopar, Mumbai, require teachers to put in six hours every day, as per their convenience, any time between 8 am and 6 pm, thus giving a leeway of four hours. (Obviously, the actual lecture hours form the core hours when lecturers are expected to be around).
Flexitime, though not very popular concept, and applied by selective companies, needs attention from the hardcore corporate sector, since many professions look upon extra hours as part of the job, especially at the senior level.
Downsizing refers to the planned elimination of positions or jobs with the intention to cut costs and to improve organizational performance. Also known as rightsizing, reorganization, restructuring, and rationalization downsizing, it is a techno-structural organization development intervention that ranges from a mere headcount reduction to a part of a continuous corporate renewal process through which the organization is reinvented.
Reducing head count causes organizations to lose human capital, and be left with unhappy and overworked employees as the remaining employees have to do perform tasks for which they are not trained.
Downsizing remains an attractive option for many organizations since it creates the impression that decisions are made and actions are being taken.
Some experts believe that downsizing is handled in different ways. According to Hopkins and Hopkins (1999), while top management has a moral obligation to act in the best interests of the firm, they also have a legal obligation to protect the rights of employees. To achieve the latter end, the decision of downsizing should be communicated in a timely and appropriate manner with the provision of complete information.
Appelbaum and Donia (2001) suggest that organisations should minimize the negative outcomes of downsizing. They maintain that organisations should carefully review their decision to downsize: Indeed, this option should be resorted to only if other alternatives such as job sharing, pay freezes, wage cuts, and hiring freezes are not feasible. Moreover, the downsizing should be planned on a long term basis so that only those positions and functions that are clearly redundant are targeted. Thus, the .organization does not lose employees who are critical to its survival.
The involvement of employees in the downsizing process cannot be compromised. Thus, two-way and honest communication must be practiced at all times.
Human Resource Management in India?– Future: Population Explosion, Increase in Education Level, Technological Development and a Few Other Changes
Change is the law of nature. Several changes have taken place in the field of management. As a result of these changes, professional management has been replacing traditional management. Similarly, personnel management and Human Resource Management have taken the place of Labour Management.
Unfortunately, there are still some organisations and educational institutions where it is called Labour Management, while most of the organisations and educational institutions have recognised it as personnel management and human resource management. Thus, it is clear that in future more attention will be concentrated on human resource management and development.
However, on account of the following changes in the modern world, personnel or human resource managements are:
1. Population Explosion:
Population has grown rapidly in India and many other countries of the world. As a result, there will be need for new activities, new methods of production and distribution. Because of increase in average expectancy of life, ratio of older employees in the organisation will increase. There will be change in population mix. Personnel policies will have to pay attention to this fact.
2. Increase in Education Level:
In recent years, number of educated workers in the organisation has gone up. Needs of educated workers are quite different from that of uneducated ones. Educated consumers and workers have rendered the job of prospective managers more challenging. Consequently, those personnel policies which were formulated several years ago, when most of the workers were illiterate, will become irrelevant.
3. Technological Development:
Management will also be influenced by rapid technological development. They will need such prospective employees as could operate modern machines efficiently. Besides, constant training will be required to maintain the skill of the existing employees. In future, the organisations will have to make technological forecasting like man-power forecasting. Automatic machines and equipments are opposed by the trade unions. Managements will have to take them into confidence before going ahead with the installation of these equipments.
4. Change in Political Environment:
In order to safeguard the interest of workers, consumers and the society, government will interfere in business. It will take part with greater vigor in labour-management relations. In order to protect the interests and rights of all in the organisation and to strike a proper balance among them, such legislations are likely to be introduced. Hence, the managements while chalking out personnel policies must keep this in mind.
5. Change in Sources of Manpower:
Consequent upon better educational facilities, candidates belonging to scheduled caste, scheduled tribe, other backward class and minorities will be important source of recruitment in future. Hence, while framing recruitment policy in different organisations, these sources must be taken care of.
6. Complexities of Human Relations:
Industrial peace is a significant objective of all industrial institutions. Existence of more than one trade union, affiliation of trade unions with different political parties are other challenging problems for the management to tackle with. In addition, internal trade union rivalries may also pose serious problems for the organisation. It may therefore, become still more difficult to establish good human relations. All this will necessitate greater efficiency and more tact on the part of the human resource management.
7. Greater Importance to Health and Safety Programmes:
Because of statutory pressures, human resource management will have to implement provisions relating to health and security.
In future, more attention will be paid to human resource management.
Besides, the management will also look after the following in times to come:
(i) Leadership will have to shed authoritative approach and adopt participative approach.
(ii) While dealing with the employees they will adopt humanitarian approach.
(iii) Talent and creative capacity will be encouraged. In order to increase the qualities of the employees they will be suitably awarded.
(iv) More preference will be given to humanitarian approach rather than legal and rule bound approach.
(v) Human factors have an important role to play in the achievement of organisations objectives. This approach will be duly recognised.
(vi) Human Resource Management will be given higher status than other functional fields like marketing management, financial management and production management.
(vii) Human resource Management will lay stress on full development of human resources in the organisation.
(viii) Trade unions will be given due importance in the management of the industries.
(ix) Human Resource Management will now include development of the organisation, career planning and development, good industrial environment, national wage policy and social justice, etc.
(x) With a view to solving labour related problems, professional personnel managers will be appointed.
Human Resource Management in India – Barriers to Development of HRM
Development of HRM in India has been very slow, because of the following reasons:
(i) Because of predominance of traditional and family – related management, more importance was given to private profit than to labour welfare. Labour welfare activities were performed simply for the sake of legal formalities. On account of traditional management and authoritarian approach, development of human resource management faced many obstacles.
(ii) Even labourers approach toward human resource management in India is not favourable. Labour class considers management as a class of exploiters. This approach has also hampered the growth of human resource management.
(iii) Managers paid no heed to labour welfare activities due to lack of strong trade unions. If the trade unions are strong, they can compel the management to take necessary steps in this direction.
(iv) Migratory character of workers also hampers the growth of human resource management. They’re not sticking to one place turns management indifferent towards their well-being.
(v) Self-interest of the labour leaders also account for the slow growth of human resource management. They sacrifice the interests of the labourers and enter into compromise with the employers for their selfish ends. Consequently, capitalists did not take any interest in the development of human resource management.
(vi) Several organisations are ignorant about the role of human resource management. They still regard it as an agency to recruit and retrench the members of the staff. This approach has also stood in the way of growth of human resource management.
(vii) Too much dependence on judicial machinery by both labour leaders and the employers for the solution of labour problems has also hindered the growth of human resource management.
(viii) There is lack of requisite ability, creative capacity and essential qualities among human resource managers. It is because of this fact that line managers treat them inferior. Moreover human resource management is not treated as a profession. This attitude has also stinted its growth.
(ix) To develop human resource management as a profession, there is lack of necessary training centres.