Human Resource Management in India - Literature review Example

Human Resource Management in India Introduction Over the years, India, a free market economy has adoptedmanagerial practices from other regions around the world. Today, the management mind-set in India is influenced by the constant changes in the global business environment. India is a society that is stratified into the caste system, and this also influences the decisions taken by the recruiting managers. However, the government has ensured that no caste is ignored in terms of employment opportunities in Indian job market. Globalisation has bought attitudinal change with regards to labour policies and practices in India and this can be attributed to the liberalisation of markets that came along with it. In today’s Indian business environment, the management focuses on logic rather than charisma in the implantation processes. Top management of organisations in this country focuses on empowerment and accountability to tackle various challenges affecting the globalised business environment. Among the challenges facing the globalised business environment today include innovative technology and product planning (Srimannarayana, 2008). On the other hand, a key feature in India’s workplace is the demographic uniqueness. The population of working age in India is expected to increase in the near future to over 986 million people. This will likely put the country’s ability to create more jobs in a critical situation in terms of absorbing the skilled population into job positions at the moment and in the near future. In a country where a large population of young people are reaching the working age annually, more jobs are needed to prevent living standards in the country from declining. The government, as the leader and the planner of the economy needs to come up with measures to support the jobless, by providing jobs. The retirement age in India is between 55 and 58 years, but the workplaces are dominated by the youth. In a bid to develop a capitalist system, India has embraced liberalisation, and this has influenced changes in corporate mind-set and practices by the human resource managers. (Srimannarayana, 2008). There are ideals in the Indian legal framework that makes India a Welfare State but a majority of human resource welfare policies are neither monitored nor implemented as required. Key institutions that shape and influence HRM in India The service sector in India has continued to experience a tremendous growth. However, a vast majority of Indian are employed in the agricultural industry. The agricultural employment scene is dominated by highly irregular wage with a majority of worker employed in its informal component (Mazumdar, 2010). The constitution lays the policy framework on the policy and welfare state. The law promises an equal pay for an equal work done by both men and women. It additionally promises to protect the welfare of the workers. The Indian service industry has seen a developing trend of using non-permanent t labour in recent days. This can be attributed to the passing and enactment of federal policies that makes retrenchment difficult and expensive to an employer. The Indian law creates social soft net for the working citizes. An example of a law that regulate the Indian Labour-market is the Industrial Disputes Act of 1947. The law prohibits the laying off an employee who is on the master roll of a factory and has been in employment for a period not less than one year. In case of retrenchment, the act puts a responsibility on the employer to give proper notice that communicate the cause for the same. Another law that regulates the Indian labor market is the Factories Act of 1948 that gives permanent employees the right to leave with pay, as well as safety while working. The acts require that the employer pay for overtime work at a wage rate higher than the standard level (Fernandes, 2003). Conversely, there exist a gap in the laws touching on the treatment of contracts and casual laborers. There is no legal framework that serves to protect this class of employees. They can be laid off and retrenchment can be done without any compensation whatsoever. Such legal framework has served to encourage the employers to prefer hiring contacts and casual labourers since they are a cheaper source of labour in the long run. The firm can hire and fire contract workers as a matter of necessity without giving any explanation. In India, the law regulating contact labour is contained in the Contract Labour Regulation and Abolition Act of 1970. The regulations establish a contract worker ought to be paid as per the minimum wage policy of the country. A provision of the act that favour the employee is the one requiring the principal employer to provide decent working condition. This includes availing clean drinking water and sanitary services (Fernandes, 2003). The majority of workers landing contracts and casual jobs in the country have more than twelve years of formal education. This a change in trend observed before the onset of globalization when the majority of Indian contract and casual laborers were semi-skilled. This can be attributed to the developments in the Indian educational system. The priority of a majority of the poor and the uneducated caste has change with more people attending colleges and vocational training institution in search of knowledge and skills necessary to get employed in the Indian economy. Their skills are needed to drive innovation and creativity in India’s business environment that is now embracing technological advancement to match other emerging economies such as China, for instance (Garg, 2015). With the advent capitalism, organizations are seeking to hire skilled workers with the aims of remaining competitive in the marketplace. As a result of a focus on the knowledge-based economy, developing advanced skill has become a necessity to secure employment in most of India’s organizations. Educational institutions in India are developing to cater for local human resources needs, as well, those of international labour market. This development has resulted in high levels of unemployed but trained human capital within the countrys economy. The Indian government continues to extend welfare to the unemployed youths through programs like the Rural Employment Guarantee Scheme act 2005. The program guarantees a hundred working days a year to anyone who is willing to work. In a liberated labor market like the one for India, forces of demand and supply will always play a significant role in setting the remuneration policies of organisations. The supply of skilled labour in India exceeds the demand and therefore institutions are giving lower packages compared to other fast growing and developed economies. Huge differences exists in the remuneration packages offered by organizations in India. With the changing expectations of employees, there have been changes in various sectors of India’s economy. For instance, the better pay offered by some employers in various organizations in India has resulted in the high labour turnover. Educated youth in India are shifting from one organization to another in looking for better incentives. The turnover is influenced by offshoring that typically retains employees for a relatively shorter period (Holtbrugge et al. 2010). As well, organizations in India also face a challenge in terms of keeping senior executives who are moving to MNCs that are joining the Indian market due to the liberalization of the economy. Growth and development in the fields of Information Technology (IT) and the business process outsourcing has been a major boost for the labour market in the country. The growth can be attributed to the cost advantage of offshoring in additional to the value added services provided by the talented Indian human capital. This development has led to the growth of institutional of high learning in the country, especially the ones offering engineering courses (Jain et al., 2012). According to Sayeda et. al. (2010) the Indian IT sector is in the process of consolidating its competitive position in engineering services outsourcing (ESO). This deals with global innovation capacity in design, innovation, research as well as engineering. This assertions are backed by the increased demand for competent engineers in India and the global labour market as a whole. The National Association of Software and Service Companies (NASSCOM), and the Confederation of Indian Industries (CII) have designed policies and initiatives aimed at enhancing human resource skills and competencies. The plans have been formulated in collaboration with the Indian government agencies, academic institutions, and practitioner in the field of academia. India has a massive workforce, as a result, the trade unions exist to safeguard the rights of employees working in the various sector of the Indian economy. The country is accustomed to HRM malpractices where employees work in sweatshops and are exploited by their employers. Trade unions in India have gained dominance due to the exploitation of the low-income earner considered to lack the right qualifications. From the early 90s when the country embraced liberalization, a number of changes have taken place regarding corporate mindset and HRM practices (Azmi & Msushtaq, 2015). The growing population of the educated class in India also means that HRM practices need to emphasize regional diversity (Cooke & Saini, 2010). Initially, human resource was not valued in India due to the focus on the caste system. Due to the liberalization of its economy, organizations are now driven by strategy rather than culture. Today, the policies implemented by the Indian government have allowed organizations to recognize the importance of employees in achieving competitive advantage in the marketplace. In essence, key institutions such the prevailing political system play key role in providing an enabling environment where organisations embrace practices that can improve organizational performance. Such human resource practices will include, providing incentives for employees such as pay rise and offering in-service training to develop skills of workers (Holtbrugge et al. 2010). On its part, the government is has engaged in measure to support the growth and development of human resource. The government is in itself an employer. It employs citizen to enable it deliver services to the public to deliver its welfare state duties. every week it publishes job vacancies available across the country. Labour-market in India Then labor market thrives in a laissez-faire environment. There is minimum government involvement as long as employers adheres to the set rules. The competition arena in the Indian labour market has changed in recent decades. Initially the competition used to be amongst local employers and involved organisation trying to play the control regime to their respective advantages. With the advent of globalisation competition has moved to the international arena. Employer are competing for high quality workforce with other multinational organisations around the globe. At the same the same time employers are now enjoying greater freedom in pursuit of their respective strategic imperatives (Mazumdar, 2010). Evidently, the demographic uniqueness in India in terms of the population of the working age poses a challenge for employment opportunities for the youth. In India, millions graduate annually from institutions of higher learning and are released into the job market. However, the employment opportunities are fewer compared to the population of job seekers. This results in a situation where more youth are unemployed and end up in the informal sector, especially the agricultural sector. In contrast, India is ranked high among the emerging economies and as such, the country is more focused on a knowledge-based economy (Azmi, 2011). The economy is currently focused on the pharmaceuticals, biotechnology and the information technology sectors. As such, prospective job seekers are advancing their education to gain an edge in a competitive job market that is influenced by specialized skills and education level. However, the emergence of the knowledge-based industry in India has contributed to the liberalization higher education. As more institution join in the sector has affected the quality of education. Skill sets provided by many graduates do not match the industry needs. (Stumpf et al. 2010). On the other hand, the recruitment and retention in India’s job market are influenced by innovation and creativity. Most organisations that are setting up their businesses in India are focusing more on the youth due to their enterprising and innovative nature in a technological era. Offshoring is gaining prominence in India. Service industry in India appears to absorb more of the fresh graduates due to the nature of work in the service sector than the ageing workforce (Karthikeyan et al. 2014). The countrys retirement age is between 55 and 58; however, there is need for experienced personnel in some sectors such as the health sector or institutions of higher learning to provide directions and transfer knowledge to the youthful and inexperienced personnel (Srimannarayana, 2013). Evidently, the increased population of graduates in India’s job market has an impact on the pay due to the flooding of the job market. In addition, recruitment in India’s job market is very competitive due to the huge number of graduates joining the job market annually. This has resulted to some graduates moving abroad to other economies in search for better paying jobs (Budhwar, 2012). On another note, while liberalisation fast tracks economic development, there is need to develop policies that protect workers. The entrant of multinationals into the Indian market requires the responsible authorities to ensure that sound practices are adopted. India is a country with a very diverse culture. Therefore, the government should implement policies that foster cultural balances. The benefits of an emerging economy are more felt by those living in the big cities than those in rural areas. Every year, huge population of rural inhabitants are migrating to cities looking for a better life (Tansky et al. 2010). The emergence of the knowledge-based industry in India has seen organisations now embracing SHRM practices to ensure that their employees adapt to the changes in a competitive business environment. The HRM practices adopted by organisations include pay rise for high performing employees and training to improve the skills of employees. In a knowledge-based industry, retaining high performing employees is critical in ensuring that an organisation remains relevant in a competitive business environment. This is because a knowledge-based enterprises are driven by innovation and creativity. As such, the competitive advantage is enhanced by retaining the skilled and experienced workforce who can improve productivity (Neirotti, 2013). The Indian human recourses sector needs proper management of the various institutions that have an influence on the labour market. The government should ensure that graduates gets the skills that matches the economys need. This will help to avoid situations where graduates specialise only in a certain field. As a matter of facts, majority of available jobs are found in big cities, there is a need for organisations to exploit opportunities in other regions. This will help them to cut on additional costs of paying high salaries by exploiting the benefits of cheap labour away from the big cities in India (Muduli, 2012). Unemployment as a key macroeconomic issue facing India While India is categorized among the emerging economies in the world, it still grapples with issues of high unemployment rate. This has led to the widening of the gap between the rich and poor in a culturally diversified society such as India. The real benefits of economic growth are felt in the cities where majority of industries are located. Workers can find a source of employment to improve their living standards, the high unemployment rate in India can be linked to the government’s failure to deal with illiteracy rate in various parts of the country. Due to illiteracy rate, a large part of the population in India cannot access formal employment in the different sectors of a knowledge-based economy. On another note, the working age population in India is high and thus exceeds the number of opportunities in the job market (Chatterjee, 2007). The population of youths still in institutions of higher learning continues to rise, and this means that the unemployment rate will continue to rise. In any country, unemployment increases poverty levels. As a result, individuals subject to poverty cannot afford shelter, food, education and healthcare. Consequently, more social problems emerge and impact directly on a country’s economic development. This definitely requires the government to step up in providing employment for its citizen. For example, poverty is associated with an increase in crime rate which, in the long run, impacts negatively on investor confidence (Sondhi & Nirmal, 2013). The issue of unemployment is not only affect India, but other countries both in the developed and developing world. For example, the 2008 economic recession affected many organisations and, as a result, some collapsed while others retrenched their employees. However, governments around the world have an important role to play in terms of solving the issue of unemployment globally. In India, the government has failed from time to time to implement policies geared to solving the rising rate of unemployment. This is due to the lack of political will by those elected in the government to serve the interest of their constituents (Ramaswamy & Schiphorst, 2000). Further, development is only focused in the big cities while the remote areas of the country are ignored. This leads to a situation where the citizens in the remote area are marginalised in terms of economic development. This represents the government failure in implementing social and economic welfare policies that promotes equality amongst its citizens. As such, they are deprived of the opportunity to improve their living standards by seeking education. Part of the society in India still holds traditional beliefs those impacts negatively on progressive development. For example, the caste system can prevent certain class in the society from progressing in life. In this regard, tackling unemployment require the government to ensure that the resources in the country are equitably distributed. This is will ensure that every part of the country has an opportunity to improve in terms of economic development (Sahoo et al. 2011). The government is channelling a lot of resources the Ministry of Micro, Small & Medium Enterprises to help grow enterprises in the countries. The government is able to channel funds for the established of microfinance organisations where individuals can borrow funds to start a business that can eventually grow to offer employment opportunity to other people. As discussed earlier, the Indian government has invested a huge amount of resources in education as a way of improving the living standards of its citizens. In India, education is affordable to almost everyone. Poverty levels in different parts of the world are on the rise due to illiteracy rate (McDonnell et al. 2014). In this sense, education is a key driver of economic development and when a country invests on education, and then there are more opportunities for skilled human capital both locally and abroad. On another note, employers can tackle the high unemployment rate by embracing HRM practices that enhance low employee turnover. Employers can help reduce the high unemployment rate by expanding their business to other regions and thus creating employment opportunity (Sanyal & Sett, 2011). The unions on their parts should put pressure the government to create more employment opportunity for its citizens and implement better human resources welfare policies . Majority of these unions advocates for policies that ensure growth and development of an entrepreneurial culture. This will empowered youths to start their own businesses. Essentially, the debate over high unemployment rate in India requires the responsible authorities to look for a long term solution due to the uniqueness of the working population. In India, millions of graduates join the job market every year the number continues to rise. As such, it is important for the government to come up with policies that will ensure those joining the job market are employed in different sectors of the economy. As one of the fastest growing economies in the world, India is in a vantage point to attract foreign investors to invest in the country (Chatterjee, 2007). Foreign investors in the India will offer employment opportunities to the locals. However, the national approach to tackling unemployment rate in India is not achieving its goal, and there is a need for the relevant authorities to deal with the issue of citizens welfare firmly, especially employment (Budhwar & Boyne, 2004). Though there are provision in the Indian law that are clearly guiding the nation to welfare state. The problem is that most human resources welfare policies are not adequately monitored and implemented. This has inevitably led to the employment opportunities decreasing, more people are being pushed to find work in the informal sector without any legal protection. Conclusion In a constantly changing global business environment, human resources management and practices are becoming critical in ensuring that organisations remain competitive. India with its individualistic ethics blended with the welfare functionalism and a open market that offers a free and competitive economy. In this sense, there is a case for the concept of the welfare state in India. India is an economy with a position to expand economically, there is still need for the relevant authorities to tackle the problem of unemployment that impacts negatively on the economy. 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