Micro Small and Medium Enterprises (MSME) have a significant role in the growth of Indian economy and contribute to generating employment especially in the rural areas. But, the performances of the MSME in the globalization period have not been satisfactory as the number of sick MSME is increasing year by year. The MSME in India now face a tough competition from large industries and are not adequately equipped to compete with the global players. There are many challenges in the MSME of India and HR practices are one of the major problems. Many industries claimed that the P-CMM is a strategy for transforming an organization in the modern era by improving workforce practices progressively. Therefore, this paper specifically tries to enlighten the important of P-CMM and its relevant applications to solve the HR problems faced by the MSME of India.

1. Asian J. Management; 8(2): April- June, 2017
132
ISSN 0976-495X (Print) www.anvpublication.org
2321-5763 (Online)
RESEARCH ARTICLE
People Capability Maturity Model (P-CMM) Facing the Key HR
Challenges of MSME in India: A Theoretical Approach
Jianguanglung Dangmei
Research Scholar, Department of Business Management, Indira Gandhi National Tribal University (IGNTU),
Amarkantak – 484887
*Corresponding Author E-mail: joeldangmei@gmail.com
ABSTRACT:
Micro Small and Medium Enterprises (MSME) have a significant role in the growth of Indian economy and
contribute to generating employment especially in the rural areas. But, the performances of the MSME in the
globalization period have not been satisfactory as the number of sick MSME is increasing year by year. The
MSME in India now face a tough competition from large industries and are not adequately equipped to compete
with the global players. There are many challenges in the MSME of India and HR practices are one of the major
problems. Many industries claimed that the P-CMM is a strategy for transforming an organization in the modern
era by improving workforce practices progressively. Therefore, this paper specifically tries to enlighten the
important of P-CMM and its relevant applications to solve the HR problems faced by the MSME of India.
KEY WORDS: P-CMM, MSME, HR Challenges, Globalization, Indian Economy.
1. INTRODUCTION:
It is a known fact that the MSME play an important role
in the economic and social development of India. As
these enterprises enter into a new era, there is a need on
how to develop the capabilities of the workforce in
aligning with the organizational objectives in the view of
globalization. It is crucial for them to develop their own
competent human resources with the market conditions
to compete with the big industries. If these sectors have
to survive alongside with the big companies, they will
need to retain their key people and ensure that they have
the right skills and competencies. However, there are
serious emerging issues of HR practices posing
challenges to the survival of MSME in India. Therefore,
this paper emphasis on the framework of P-CMM which
needs attention for revamping the HR practices
Received on 28.01.2017 Modified on 18.02.2017
Accepted on 20.03.2017 © A&V Publications all right reserved
Asian J. Management; 2017; 8(2):132-136.
DOI: 10.5958/2321-5763.2017.00022.1
2. OBJECTIVES OF THE STUDY:
Following are the main objectives of the study:
(i) To study the Human Resource challenges of MSME
in India.
(ii) To understand the concepts and significances of P-
CMM for revamping the HR practices of MSME in
India.
3. RESEARCH METHODOLOGY:
It is exclusively based on the secondary data that focuses
on the theoretical and practical knowledge of P-CMM
that could revamp the HR practices in connection to the
MSME poor performances in India.
4. HUMAN RESOURCE CHALLENGES OF
MSMES IN INDIA:
Sonia and Kansai (2003) tried to understand the effect of
globalization on MSME in India from 1973-74 to 2008-
09 and their study concluded that MSME failed to put up
impressive performances in the post-reform era. It has
been identified that the main problems of small
enterprises are attracting talent, motivating and retaining

2. Asian J. Management; 8(2): April- June, 2017
133
the key employees (Singh and Vohra, 2005). They do
not have formal HRM policies, but they follow only
some of the HR practices like recruitment, selection,
training and development (Srimannarayana, M., 2006).
The reasons behind the numbers of sick MSME which
are increasing year by year have been found to be the
ancient production process and less employee morale
(Pandey, A.P. 2007). Inadequate wage and salary, lack
of incentives, bonus, social security and wellbeing
measures, labor market victimization and absence of
trade unions have also been identified as major issues in
smooth running of the SMEs (Srimannarayana, M. 2006;
Vettriselvan.R., and Balakrishnan. A., 2011; Narware,
P.C. 2011). Recently, it has been found that the shortage
of skilled labor and managerial incompetence emerged
as key hurdles in the SMEs of India (The Financial
Express, 2011).
5. PEOPLE CAPABILITY MATURITY
MODEL:
It is a maturity framework that focuses on the continuous
improvement of management and development of human
assets of an organization (Curtis B. et al., 2009). It
emphasizes on the improvement of workforce capability
and addresses critical people issues in the organization.
It is intended to develop individual capability, building
work groups and culture, generating motivation and
managing performance, and shaping the workforce. It is
a guideline for an organization on how to attract,
develop, motivate, organize and retain the talent needed
for organizational development (Cutis B. et al., 2003).
6. UNDERSTANDING THE
CHARACTERISTICS OF MATURITY
LEVELS OF P-CMM:
There are five maturity levels in the P-CMM. They are
(i) Initial, (ii) Managed, (iii) Defined (iv) Predictable and
(iv) Optimizing (Curtis B. et al., 1995). The details of the
content of each maturity level are given in Fig1 below.
LEVEL 5
OPTIMIZING
LEVEL 4
PREDICTABLE
LEVEL 3
DEFINED
LEVEL 2
MANAGED
LEVEL 1
INITIAL
CHANGE
MANAGEMENT
CAPABILITY
MANAGEMENT
COMPETENCE
MANAGEMENT
PEOPLE
MANAGEMENT
INCONSISTENT
MANAGEMENT
Repeatable Practice
Competency-based Practice
Measured & Empowered Practice
Continuously Improving Practice
Fig1. The five maturity levels of the P-CMM
(Source: Curtis, B., Hefley, B., and Miller, S. A. (2009). People Capability Maturity Model
(P-CMM) Version 2.0, 2nd ed., Technical Report, Software Engineering Institute.
(i) Level 1: Initial:
According to Curtis et al. (2002), organizations at the
initial level have difficulty in retaining talented
individuals and the workforces at this level are often ad
hoc and inconsistent. Organizations exhibit four
characteristics at the initial level: inconsistency in the
performances, displacement of responsibility, traditional
practices and detached workforces (Curtis et al., 2009, p.
15). Some other characteristics at the initial level are
lack of relevant knowledge or skill, unclear objectives or
feedback, work overload and environmental distractions
(Curtis et al., 2009, p. 21). Managers often lack skills
and put little importance on evaluation and improving
the ability and performances of people who report to
them (Curtis et al., 2002). Managers do not have the
ability to systematically build up the competitive
capability of the workforces. They do not accept
developing the workers as a personal responsibility.
They only perform workforce activities such as
interviewing job candidates, conducting performances

3. Asian J. Management; 8(2): April- June, 2017
134
appraisal with little preparations leading to poor staff
decisions or disgruntled employees. Furthermore,
individuals pursue their own agendas and consequently
turnover is high (Curtis et al., 1995). Therefore,
organizations at the initial level have difficulties in
retaining workers and lack common purpose on
management responsibilities as well as there is high
employee turnover rate (Rothman, 2001).
(ii) Level 2: Managed:
At the managed level, the goal is to integrate basic
management discipline into workforce activities through
repeated practices and focus on managers to take
responsibilities for developing and implementing
relevant, appropriate and interactive practices for
employees. The practices consist of communication,
coordination, staffing, work environment,
compensations, performance management, training and
development (Curtis B. et al., 1995, 2009). The primary
objectives at the managed level are to eliminate
problems and build the workforces to perform their work
responsibilities effectively. The practices are to ensure
that the workers have the required knowledge and skills
to perform their current assignment. In doing so, the
workers start to grow and develop their workforce
responsibilities seriously and show greater consistency in
the performances within their group (Curtis B. et al.,
1995). It also focuses on improving the capability of the
workforce and making activities as personal
responsibilities of their job. These practices build a
foundation for attaining a higher level of maturity in the
organizations. The significant of the practices at the
managed level is to get rid of the frequent failure of
organizations improvement programs as the programs
often fail due to unprepared management team. The
basic practices address the immediate problems of the
managers and equip them for more complicated practices
at higher levels. It creates mangers that are vigilant to
problems that hamper performances in their units and
starts to manifest commitments in the organization to
continuously improve the knowledge, skills and
performances of its workforce. They demonstrate these
commitments in policies and providing the resources
needed to support the basic workforce practices. They
also reinforce these commitments by holding all
managers accountable for the performances of workforce
practices in their respective units. Subsequently,
managers are focused on individual performances and
coordinating individual’s performances into effective
unit performances. Therefore, at the maturity level 2,
organizations activities are characterized by developing
workforce capability of units to meet commitments and
this capability is attained by ensuring that people have
the right skills required to perform their assigned works.
The benefits organizations received when they execute
the improvements guided by the P-CMM in the managed
level are reduction in voluntary turnover and poor
relations with the immediate supervisors (Curtis B. et al.,
2002).
(iii) Level 3: Defined:
According to Curtis B. et al. (2002), at the defined level,
organizations clearly discover core competencies and
bring into line with business strategies and objectives. It
is integrating the practices and capability of the
workforce to strategic business objectives. It is to
increase the competitive advantage by developing the
various competencies that must be integrated in its
workforce to accomplish its business activities. Each
workforce competency constitutes a distinct combination
of the knowledge, skills, and process abilities required to
perform some of the business activities that add to an
organization’s core competency. These workforce
competencies are critical pillars that hold the strategic
business plan and their absence poses a severe risk to
strategic business objectives. After the workforce
competencies are well defined, the management
executive focuses on systematical training and
development practices enabling development in its
workforce competencies. At this level, it is competency-
based processes for defining workgroup roles and
operating processes. Workforce now organize
themselves by applying standard competency based
processes rather than relying only in the interpersonal
coordination skills developed at managed level. They are
empowered to make decisions about the business
activities as they have the knowledge and skills that are
needed to achieve a superior level of performance. Thus,
a common participatory culture is developed through
empowering workgroups. As a result, the entire
workforce starts to share responsibility for developing
increasing levels of capability in the organizations. The
organization must build an environment that involves
people in decision making about their business activities
to use the ability of the core competent of the workforce.
(iv) Level 4: Predictable :
Curtis B. et al., (2002) stated that the organizations
properly handle and manage the capability of the
workforce competencies at the predictable level. It is
sustained through formal mentoring converting
workforce capability and performances quantitatively.
Organizations can predict the workforce capability as it
can be quantified through the competency-based
processes they use in performing their assignments.
Organizations preserve the results of the performing
competency-based processes to be reused by others due
to its high effective performances. In the process, they
put trust in the method through it was produced and use
the processes that have been proven effective. This trust
in the methods gives the managers the confidence to
empower workgroups. Managers then transfer
responsibilities and authority for the committed workers
with the belief that the workers have the competent to

4. Asian J. Management; 8(2): April- June, 2017
135
perform work effectively. Organizations use these data
generated by the competency-based processes for
planning, improvements, evaluations and take corrective
action when necessary. These data enable the
management to make more accurate predictions and
better decisions (Curtis et al., 2002). Mentoring,
organizational capability management, quantitative
performance management competency-based assets,
empowered workgroups and competency integration are
the expected areas for in implementation in the level 4
(Curtis et al., 2002, 2009).
(v) Level 5: Optimizing:
The main priority at the optimizing level is focused on
continual improvement. The results of the quantitative
management from the level 4 are utilized to guide
improvements in the optimizing level. Individual
workers are encouraged to make continuous
improvements. This level aligns personal, workgroup
and organizational competencies to achieve workforces
continuously. It helps the organizations to attain
workforce innovation, organizational performance
alignment and continuous capability improvement
(Curtis et al., 2002, 2009).
7. The Key Process Areas of the P-CMM:
The key process areas (KPA) explore and identify the
capabilities that are required to achieve a particular
maturity level. They illustrate the practices that an
organization must implement to improve its workforce
capability at each maturity level (Curtis et al. 2009). The
details of the key process areas of the P-CMM are shown
in the Fig2 below.
Fig2. The Key Process Areas of the P-CMM
Source: Curtis, B., Hefley, B., and Miller, S. A. (2009). People Capability Maturity Model (P-CMM) Version 2.0, 2nd ed., Technical Report,
Software Engineering Institute)
8. PROCESS AREA THREADS IN THE P-
CMM:
The process area threads consists of four themes that run
through the P-CMM: (i) Developing capabilities, (ii)
Building teams and culture, (iii) Motivating and
managing performance and (iv) Shaping the workforce.
These four themes address the key process areas linked
across maturity level. Further, the implementation of key
process areas at one level is seen as establishing the basis
for practices and capabilities at the next level. These
themes facilitate in understanding the structure of the
model and the relationships among the key process areas
within the P-CMM (Curtis et al. 2009) as given below in
Fig3.
9. SIGNIFICANCES OF P-CMM FOR MSME
OF INDIA:
Curtis, D.B. et al (2002) clearly identified that P-CMM
is a strategy for transforming an organization by
improving workforce practices progressively. The P-
CMM not only addressed turnover but also increases
workforce moral, productivity gain and provides an over
organizational improvement strategy (Curtis, B., 2003).
It is a promising technique in the human resource subject
and an emerging approach in human resource
management for organizational development (Curtis et
al., 2009). It is a well set course of actions that hold
distinctive transformation in each progressive level by
aligning with the objectives, performances and changing
LEVEL 5-OPTIMIZING
Continuous Workforce Innovation,
Continuous Performance Alignment,
Continuous Capability Improvement
LEVEL 4 – PREDICTABLE
Mentoring, Organizational Capability Management,
Competency-Based Assets, Empowered Workgroups,
Competency Integration
LEVEL 3 – DEFINED
Participatory Culture, Workgroup Development,
Competency-Based Practices, Career Development,
Workforce Planning, Competency Analysis
LEVEL 2 – MANAGED
Compensation, Training and development, Performance
Management, Work Environment, Communication and
Coordination
LEVEL 1 – INITIAL
Staffing

5. Asian J. Management; 8(2): April- June, 2017
136
needs of the organizations (Pulikkalakath, 2007, p. 5).
The P-CMM framework creates a working environment
where practices are repeated; best practices are
transferred among groups and enhances the capability of
the employees (Curtis B. et al., 2009, p. 13). It provides
opportunities to career potentials and motivation to
improve performances than before (Curtis B. et al., 1995,
2002). It is a roadmap for evolutionary development
from ad hoc and inconsistent performances to mature
elevating and superior performances contributing to the
organization’s capability offering high-quality products
and services (Curtis B. et al., 2009).
Maturity Levels Process Area Threads
Developing
Capabilities
Building teams and
Culture
Motivating and Managing
Performance
Shaping the Workforce.
5
Optimizing
Continuous Capability Improvement Organizational Performance
Alignment
Continuous Workforce
Innovation
4
Managed
Competency-Based
Assets, Mentoring
Competency Integration,
Empowered Workgroups
Quantitative Performance
Management
Organizational
Capability Management
3
Defined
Competency
Development,
Competency Analysis
Workgroup
Development,
Participatory Culture
Competency-Based
Practices, Career
Development
Workforce Planning
2
Managed
Training and
Development
Communication and
Coordination
Compensation, Performance
Management, Work
Environment
Staffing
Fig3. Process Area Threads in the P-CMM
Source: Curtis, B., Hefley, B., and Miller, S. A. (2009). People Capability Maturity Model (P-CMM) Version 2.0, 2nd ed., Technical Report,
Software Engineering Institute
CONCLUSIONS:
This paper finds that the P-CMM is highly relevant to
overcome the key HR challenges in the MSME of India.
If the executive managers strictly follow the protocol of
each maturity level of the P-CMM, it will bring
tremendous changes in the HR practices developing
highly competent skilled workforces needed for the
continuous growth of the MSME. Therefore, it is
suggested to the HR managers to introduce P-CMM for
revamping the HR practices of MSME in India.
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