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- 1. Human Resource Practices in India Pramila Rao, Ph.D.
- 2. Learning Exercises for Module • This learning module is divided into three 50- minute classes and includes the following exercises (bulleted): • 1. Background information and federal Laws: o A presentation from students (slide 9). o Quiz on Class I content. • 2. Culture and HR practices: o Socrates Seminar (slide 22). • 3. Indian HR practices o Quiz on Classes II and III content. o Article discussion (slide 32). ©SHRM 2008 2
- 3. Module Outline Class 1: • Welcome to India. • Quick facts. • History and societal background. • Business facts. • Best Indian companies to work for (2007). • Federal laws. Class 2: • National cultural profile (GLOBE study). Class 3: • HR practices: > Staffing. > Training. > Performance appraisals. > Compensation and benefits. ©SHRM 2008 3
- 4. Class 1 Background and Federal Laws ©SHRM 2008 4
- 5. Welcome to India Namaste (pressing of the palms together) is the traditional greeting of Indians. • The Indian flag: o Colors have symbolic representation. ©SHRM 2008 5
- 6. India Quick Facts • Population: 1.1 billion. • Political structure: Democratic republic. • Government: President, prime minister and two Houses of Parliament. • The ruling party: Congress. • Twenty-eight states and seven union territories. • Seventeen distinct languages: Hindi and English are the official languages. • Religion: Hinduism (83%), Muslim (11%), Christian (2%), Sikh (1.9%), Other (1.8). • Literacy rate: 65%. • Indian currency: Rupee ($1= 40 rupees). ©SHRM 2008 6
- 7. History and Societal Background • British colony for 100 years. • Great national leader: Mahatma Gandhi. > Ghandi introduced the concept of non-violence protest. • The Indian social system is dominated by a caste system. Four specific castes; Brahmins, Khastriyas, Vaishyas, Shudras. Created distinct labor categories. Associated status differences. ©SHRM 2008 7
- 8. Business Facts • Today, India is the fourth largest economy in the world. • Until 1991, there was an import substitution policy that favored domestic industries. • After 1991, there was active foreign investment with a very strong trade liberalization policy. > Foreign direct investment in India increased dramatically ($15.8 million in 1997 compared with 0.3 million in 1991). • In 2000, the Y2K computer crisis required worldwide computer remediation provided by software engineers. • Indian software engineers were found to be very dedicated and hard-working (Friedman, T. 2005; “The World is Flat”). ©SHRM 2008 8
- 9. Mercer’s 2006 Best Companies to Work For in India • Infosys Technologies Limited (IT industry). • MindTree Consulting (IT industry). • Satyam Computer Services Limited (IT industry). • Dr. Reddy’s Laboratories Limited (pharmaceutical company). • Sapient Corporation (business and technology consulting). • Agilent Technologies (IT industry). • Johnson & Johnson (consumer health care company). • Covansys India (IT industry). • HCL Comnet (IT industry). • HSBC; Hongkong and Banking Corporation (banking services). ©SHRM 2008 9
- 10. Class Presentation Exercise • Divide students into groups based on class size. • The instructor will assign each group one of the best companies identified in the previous slide. • As a homework assignment, each group will research two best HR practices from their assigned company using the Internet, academic or practitioner journals. • Each group will have 8-10 minutes during the next class session to present their best HR practices. ©SHRM 2008 10
- 11. Federal Employment Laws • HR began to play a significant role with the early enactment of these employment-related laws: • The Workers’ Compensation Act of 1923 ensured that employers compensate employees for work-related injuries. • The Trade Union Act of 1926 gave formal recognition to trade unions. • The Industrial Disputes Act of 1947 led to the increased role of industrial relations (employees were distinguished by the work they did such as permanent, temporary, trainee etc.). • The Factories Act of 1948 regulated the work environment in factories to ensure the safety of employees. • The Employees Provident Funds and Miscellaneous Provisions Act of1952 required employers to provide contributions for retirement. ©SHRM 2008 11
- 12. Federal Employment Laws • The Minimum Wage Act of 1948 established minimum wages that vary from state to state. • The Payment of Bonus Act 1965 provides for a minimum bonus of 8.33 percent of salary, even if the organization is not making any profit. • The Persons with Disabilities Act (PWD) of 1995 was landmark legislation for disabled people in India. ©SHRM 2008 12
- 13. Indian HR Associations • In the 1940s and early 1950s, two professional HR associations were established to acknowledge the importance of HR: • Indian Institute of Personnel Management (IIPM). • National Institute of Labor Management (NILM). • In1980, the two associations merged to form the National Institute of Personnel Management (NIPM). • NIPM is the only group engaged in the advancement of HR, industrial relations and labor welfare. • NIPM has a working relationship with HR groups in the United States, Australia and the United Kingdom. ©SHRM 2008 13
- 14. Affirmative Action • Affirmative Action: • Based on the caste system. • Federal jobs and admissions to colleges are strongly influenced by quotas for caste reservations. • State governments can set aside 50 percent of jobs based on different castes. To get increased support from the public, some states have 75 percent of job reserved. ©SHRM 2008 14
- 15. Quiz 1 Please take the quiz on Class 1 of this module. ©SHRM 2008 15
- 16. Class 2 Indian Culture and HR Practices ©SHRM 2008 16
- 17. Cultural Profile (GLOBE Study) • Power distance: o India: 5.47 (rank 16). o Morocco : 5.80 (highest score). • Institutional collectivism: o India : 4.38 (rank 25). o Sweden: 5.22 (highest score). • In-group collectivism: o India: 5.92 (rank 4). o Philippines: 6.36 (highest score). • Uncertainty avoidance: o India: 4.15 (rank 29). o Switzerland: 5.37 (highest score) . Source: Chhokar, J., Brodbeck, F., & House, R (Eds) .(2007). Culture and leadership across the world. The GLOBE book of in-depth studies of 25 societies. Lawrence Erlbaum Associates. Mahwah, New Jersey. ©SHRM 2008 17
- 18. Definition of Cultural Dimensions (GLOBE Study) • Power distance: The degree to which organizations and societies accept power. • Institutional collectivism: The degree to which organizational and institutional practices encourage collective action. • In-group collectivism: The degree to which individuals in societies reflect collectivist behavior. • Uncertainty avoidance: The degree to which organizations and societies avoid uncertainty by relying on practices and procedures. • Performance orientation: The degree to which upper management in organizations and leaders in societies reward group members for performance excellence. ©SHRM 2008 18
- 19. Cultural Profile (GLOBE Study) • Performance orientation: o India: 4.25 (rank 9). o Switzerland : 4.94 (highest score). • Assertiveness: o India: 3.73 (rank 53). o Albania : 5.80 (highest score). • Future orientation: o India : 4.19 (rank 15). o Singapore: 5.07 (highest score). • Gender egalitarianism: o India: 2.90 (rank 55). o Hungary: 4.08 (highest score). • Humane orientation: o India: 4.57 (Rank 9). o Zambia: 5.23 (highest score). ©SHRM 2008 19
- 20. Definition of Cultural Dimensions (GLOBE Study) • Assertiveness: The degree to which individuals in organizations or societies are assertive in social relationships. • Future orientation: The degree to which individuals in organizations or societies plan for the future. • Gender egalitarianism: The degree to which organizations or society promote gender equality. • Humane orientation: The degree to which individuals in organizations or societies reward individuals for positive behavior. ©SHRM 2008 20
- 21. National Culture and HR Practices • Scholars have found a strong connection between cultural dimensions and HR practices. • High power-distance cultures create: Hierarchical organizational structures. Loyal and committed subordinate workers. Autocratic relationships between managers and subordinates. • What kind of HR practices would low power-distance cultures adopt? • What staffing practices would high power-distance cultures encourage? ©SHRM 2008 21
- 22. National Culture and HR Practices • High institutional-collectivism cultures prefer: Group harmony and cooperation. Conformity to societal norms valued. • High in-group collectivism cultures feel: A very close bond with their organization family, friends and relatives. • What kind of HR practices would low institutional collectivism cultures adopt? • What staffing practices would high in-group collectivism cultures encourage? ©SHRM 2008 22
- 23. National Culture and HR Practices • High uncertainty-avoidance cultures create: o Formalized procedures to minimize unpredictability. o Clearly defined roles for employees. o Focus on security and trust. • What kind of HR practices would low uncertainty- avoidance cultures create? • What staffing practices would high uncertainty- avoidance cultures encourage? ©SHRM 2008 23
- 24. Socrates Seminar: Learning Exercise • Ask students to read : Javidan, M., & House, R. (2001). Cultural acumen for the global manager. Lessons from Project Globe. Organizational Dynamics, 29 (4), 289- 305. • Conduct a Socrates Seminar where students ask “why,” “what for” and “so what” questions for the cultural dimensions listed below as well as the dimensions discussed in the previous slides. • Performance orientation. • Assertiveness. • Future orientation. • Gender egalitarianism. • Humane orientation. 24
- 25. Class 3 Indian HR Practices ©SHRM 2008 25
- 26. Staffing Practices • Resumes seek strong educational background. • Employee referrals (predominantly used for middle and senior management). • Succession planning (predominantly used for middle and senior management). • Elaborate employment tests related to the job, especially at entry level. • E-recruitment: Naukri.com was the first e-portal established in 1998 (naukri means job in Hindi ). ©SHRM 2008 26
- 27. Staffing Practices • Newspaper advertisements are used to brand the company to potential applicants. • Newspaper advertisements will specify age and gender requirements. • Personal questions will be asked in interviews/resumes about: Age Marital status Family plans (women planning to start a family) Family background Caste background Photos to be included Verification of educational certificates ©SHRM 2008 27
- 28. Training Practices • Training (future orientation): • Education is extremely valued, and training is an extension of it. • Entry point training programs (3 to12 months of orientation). • Ongoing training programs. • Development programs (promotions involve training). • In-house training centers are a common feature in Indian organizations. • Deductive learning style in training: Known as “top- down approach” where learning principles start with general concepts and move toward specific application. ©SHRM 2008 28
- 29. Performance Appraisal • Cultural dimensions of collectivism and power distance make objective appraisals a challenge. Supervisors and subordinates develop close relationships. Organizational loyalty is as important as work performance. Employee promotions are frequently based on seniority. • Annual performance appraisals. • Supervisors provide performance ratings that are frequently inflated due to personal relationships. • Employment at will does not exist in India. Employment termination carries a social stigma. ©SHRM 2008 29
- 30. Compensation and Benefits • In addition to a base salary, compensation includes: > House rent allowance (HRA*). > Medical allowance. > Dearness allowance (DA*). > Leave travel allowance (LTA*). > Commuter allowance. > * These allowances are frequently referred by their acronyms • Several categories of leave (vacation) exist: > Sick leave: 7 days (medical certificate required). > Casual leave: 7 days (for personal and family emergencies, requires prior permission of boss). Employees can take maximum 2 days at a time > Annual leave: 3 weeks (after one year of employment). > Federal holidays: About 20 days. ©SHRM 2008 30
- 31. Compensation and Benefits • Retirement age: > 55-60 years (private sector);. > 60 years (public sector). • Retirement Benefits: Employees receive two lump-sum payments when they retire: > Provident Fund (similar to 401(k)) • Typical contributions: 10-12 percent of base salary (employer and employee). • Payable on retirement, voluntary separation, death. > Gratuity • Only employer contributes (15 days salary per year of service). • Tax-exempt for employees. • Payable on retirement, voluntary separation, death. ©SHRM 2008 31
- 32. Compensation and Benefits • Organizations are seen as an extension of the family. Provide both short-term and long-term personal loans. Personal loans for housing, car, home maintenance and family emergencies. Loan amounts vary by position and level in organization. All employees after their probation (confirmation) period are eligible. • Many medium and large organizations have cafeterias with subsidized lunch facilities. ©SHRM 2008 32
- 33. Compensation and Benefits • Executives receive special benefits to reflect status such as: • Club memberships. • Overseas training. • Company housing. • Company cars. • Provided with drivers. • International cars. • Operational and maintenance costs. • Phone bill reimbursements. • Organizations provide business and cell phones. ©SHRM 2008 33
- 34. Quiz 2 • There will be a quiz based on slides 13-33. ©SHRM 2008 34
- 35. Article Discussion • Grossman, R. (2006). HR's Rising Star in India. HR Magazine. 46-52. • Identify and discuss three major HR challenges in India. • If you were hired as the HR director for a multinational corporation in India, how would you overcome these HR challenges? • Which two HR strategies of PPMS do you think are effective? ©SHRM 2008 35
- 36. References • Budhwar, P., Luthar, H., Bhatnagar, J. (2006). The dynamics of HRM systems in Indian BPO firms. Journal of Labor Research, 27(3), 339-360. • Babu, V. (2006). Infosys: Incredible Infy; What's the secret sauce that makes Infosys the best company to work for, year after year? Business Today, pp 88. • Budhwar, P., & Khatri, N. (2001). A comparative study of HR practices in Britain and India. International Journal of Human Resource Management, 12(5), 800- 826. • Challapalli, S. (2005). Those grand jobs. The Hindu, Business line. Retrieved from http://www.thehindubusinessline.com/catalyst/2005/03/3 1/stories/2005033100070100.htm ©SHRM 2008 36
- 37. References • Chhokar, J., Brodbeck, F., & House, R. (Eds). (2007). Culture and leadership across the world. The GLOBE book of in-depth studies of 25 societies. Lawrence Erlbaum Associates. Mahwah, New Jersey. • Deshpande, S. (1992). Compensation Legislation in India. What US investors need to know. Compensation & Benefits Review, 24(5), 57-60. • Grossman, R. (2006). HR's Rising Star in India. HR Magazine, 46-52. ©SHRM 2008 37
- 38. References • World Flag. http://www.worldflags101.com/i/india- flag.aspx. • http://www.disabilityindia.org/pwdacts.cfm. • Klie, S. (2006). HR around the world. Canadian HR Reporter, 7-8. • Merchant, K. (2006). Companies in India offer a taste of the sweet life. Financial Times (Asia edition), 23-24. • Ratnam, V., & Chandra, V, (1996). Sources of diversity and the challenge before human resource management in India. International Journal of Manpower, 17, (4/5), 76-96. • Tyler, K. (2006). Infosys Technologies Ltd. HR Magazine, 56–60. ©SHRM 2008 38
- 39. References • Saini, D., & Budhwar, P. (2004). HRM in India. In Managing Human Resources in Asia-Pacific. Routledge. London and New York. • Srinivasan, N. (2002). Flawed Law. India Together. ©SHRM 2008 39
Editor's Notes
- Namaste is the traditional greeting and is done as shown by the model in the picture. This greeting can be used any time during the day. It literally translates to "I bow to you". The word is derived from the Indian language Sanskrit. Namas means to bow or salute and te means to you. On the Indian flag orange represents courage and sacrifice; white represents purity and truth; and green stands for faith, fertility and chivalry. The wheel in the center represents each hour of the day, as well as the endless circle of life.
- India has a parliamentary form of government with two Houses in the Parliament (Rajya Sabha and Lok Sabha). Though the president is the supreme commander of the Indian armed forces, the prime minister and the elected ministers are responsible for running the country. The majority of Indians do not eat beef for religious reasons. Because of this, hamburger giants like McDonalds opened restaurants in India and offered soy burgers. Hindi is as the national language because it is spoken by the majority of the population. Indian children are exposed to at least two to three languages during their school years as a part of their curriculum and through social exposure to people from different states. Knowledge of a regional language is considered a definite employment asset, especially for supervisory employees.
- Mohandas Karamchand Gandhi is rightly (and officially) known as the father of the nation. He pioneered the concept of non-violent protest that inspired other great freedom leaders like Dr. Martin Luther King, Jr. The Indian social system is dominated by a caste system that fosters inequality, power and hierarchical management. The British reinforced the caste system because they equated it to their own class system. The British also introduced the census in India so they could identify different labor groups and employ them to their best advantage, thereby further emphasizing labor differences among groups. Caste is derived from the term castas, which was introduced by early Portuguese invaders in the 16th century to describe the tribes, groups or families they observed working in separate groups. The caste system is divided into four principal labor categories based on a social and economic hierarchy. Brahmins are considered the intellectual leaders. Kshatriyas are considered the soldiers of war; Vaishyas are business traders; and Shudras are unskilled laborers. The caste system has created distinct labor categories and status differences among the groups. Brahmins are considered the highest in the caste hierarchy and Shudras the lowest. You can learn more about the British presence in India and the caste system by accessing “The Indian Caste System and The British” online at http://www.infinityfoundation.com/ECITcastebritishframeset.htm.
- Prior to 1991, India had a closed-door policy toward direct foreign investment, and the government controlled most economic and business activities. There were strict ownership restrictions that allowed foreign companies to have only 40 percent equity when collaborating with domestic companies. While multinational companies generally complied, the classic case often quoted in business text books is that of IBM and Coca-Cola. Both organizations were asked to leave India because of lack of ownership compliance. In 1991, a new prime minister realized that to compete in the global market, India needed foreign investment. As a result, the government slowly began to ease some multinational ownership restrictions. The United States quickly became the largest investor in India with nearly $570 billion invested between 1991-2002. You can learn more about India’s foreign investment policies by accessing “Foreign Direct Investment in India” at http://www.london.edu/assets/documents/PDF/foreign_dir_investment_india.pdf. India is recognized as a global leader in software development. The Indian software industry has been instrumental in the international attention the country receives today. India has a well-educated English-speaking workforce who can communicate easily with other English-speaking cultures. The workforce is also often commended for its strong work ethic and willingness to work 12-hour days, six days a week. In addition, professional labor costs are significantly lower in India--almost 25 percent lower than in the United States. Global consulting group McKinsey estimates that if a multinational bank of 1,000 employees moved to India, the bank would save $18 million annually in labor costs.
- A study by Mercer identified these companies to be the best companies to work for in India. As you will notice, most of the companies are from the IT industry, further demonstrating how important the IT industry is to the Indian economy. The Indian software industry has grown from a mere US $150 million in 1991-92 to a staggering US $5.7 billion (including more than $4 billion of software exports) in 1999-2000. In 2003, Infosys Technology, the top company on Mercer’s list, was identified by the American Society for Training and Development (ASTD) as one of the best companies providing global training. The results of the Mercer study helped benchmark best employment practices in the industry.
- Divide the class into groups of two to three students. This class exercise can be spread over two class sessions, and a part of the class time can be used for presentation. Encourage students to note their questions during their research so they have a thorough understanding of the HR practices of their assigned company. For increased class participation, ask how these HR practices differ from the HR practices students have observed at a current or previous organization for which they have worked. The instructor can also ask each group to provide a 2-3 page summary report of their researched HR practices with references. The last page should include the students’ opinion on the researched HR practices.
- The chronological enactment of employment laws reflects the increased importance of HR in the workplace. Indian organizations also noted the increased visibility and value of HR by migrating away from the use of the term “personnel” to “human resources.” Please read the following articles to get a better understanding of employment laws in India: Employment Law (scroll to Employees' Rights and Remuneration) : http://www.iptu.co.uk/content/india_employment_law.asp. Doing business in India: http://www.indialaw.org/laws.html#law1.
- The Payment of Bonus Act guarantees that a bonus is paid to employees who have worked for at least 30 working days in the year and have salaries of at least Rs.3,500 per month. The payment of a bonus is applicable to every establishment where 20 or more workers are employed, but there are exceptions. Employees who work in insurance corporations, educational institutions, hospitals, chambers of commerce, federal banks and social welfare institutions are not entitled to a bonus under the Act. Bonuses do not have to be paid if the employee is dismissed from service for fraud or misconduct on the premises or for theft, misappropriation or like of the property of the organization. The law is quite controversial because employees want this bonus regardless of whether company is profitable or not; employers do not agree with this required entitlement. Disability in the Indian context includes the following: blindness; low vision; leprosy cured; hearing impairment; locomotor disability; mental retardation; or mental illness. About 50 million people, or 5 percent of India’s population, are affected by some sort of disability.
- The creation of NIPM demonstrates the growing importance of HR in India. Further, links with other global HR organizations allow Indian members to understand and share best practices.
- India’s Constitution provides for affirmative action based on the caste system in both education and employment. In federal jobs, it is common to have departments comprised of a single caste groups. Similarly, trade unions are also organized along the caste lines. Creation of such groups poses organizational challenges because these groups carry their personal differences to the workplace. Please read following articles for more information about the caste system and its effect on HR: Mozumdar, Suman Guha. (2007). Of job hunting and Indian Cast System. Rediff India Abroad. http://www.rediff.com/money/2007/nov/02hire.htm. Anonymous (2007, October 6). With reservations - Business and caste in India. The Economist. London. 385, 8549, 93.
- The GLOBE (Global Leadership and Organizational Behavior Effectiveness) study, conducted by the Wharton Business School (University of Pennsylvania), is an analysis of the cultural, societal, organizational and leadership differences between 62 different societies around the world. The goal of the study was to determine the extent to which the practices and values of business leadership are universal (i.e., are similar globally), and the extent to which they are specific to just a few societies. India was included in the study. India’s high scores on power distance reflect a society that is characterized by a clear hierarchy engendered by both the Indian caste system and British rule. On average, there are at least 12 to 15 levels between a production worker and the CEO in a manufacturing environment. The Indian corporate world is characterized by clear hierarchies and formal structures. Employees are reluctant to disagree with a boss or even call them by their first name. Formal titles such as Mr., Mrs., Dr., Sir or Madam are widely used in both organizations and education. Collectivist cultures are characterized by a tight social framework where members distinguish themselves from in-groups and out-groups. In India, in-group members are usually from the same caste, religion or family. It is easy to distinguish a person’s caste and religion by last name, making it possible to make prejudiced staffing decisions. Recruiting, hiring and promoting employees from one’s own caste are quite common. Many Indian social customs suggest a culture that is ritualistic and avoids the uncertain or unknown. For example, many business decisions, such as opening a new plant, are based on astrological predictions to identify if the time is favorable. For marriages, social customs dictate that the astrological stars of the prospective groom and bride are matched before wedding plans are started.
- It would be helpful for the instructor to read articles on national culture and HR practices. Some articles are suggested below: Javidan, M., & House, R. (2001). Cultural acumen for the global manager. Lessons from Project Globe. Organizational Dynamics, 29 (4), 289-305. Chhokar, J., Brodbeck, F., & House, R. (Eds). (2007). Culture and leadership across the world. The GLOBE book of in-depth studies of 25 societies. Lawrence Erlbaum Associates. Mahwah, New Jersey. The first chapter of the Chhokar book is most helpful.
- High scores on future orientation reflect a society that plans for the future. Indian culture socializes children with axioms such as “always save for a rainy day” from an early age. This future orientation is reflected in personal bank accounts that most Indians open. The government encourages opening such accounts by providing tax breaks for them. There is a societal preference toward male dominance in both corporate and social settings, even though a female prime minister governed India for a long time. Indian women do not enjoy gender equality as many women in Western cultures do (Chhokar, 2007). There is a strong preference for recruiting only men for upper-level management positions.
- Low power-distance cultures tend to have flatter organizational structures, democratic managers and a focus on fairness and equity. High-power distance cultures create loyalty; staffing practices such as internal recruitment and succession planning are very significant. Such practices foster a committed workforce.
- Low institutional-collectivist cultures generally advocate individual achievement and value employee creativity. Compensation practices are geared toward awarding individual performance, and employee initiatives are valued. High in-group collectivist cultures create an environment of nepotism and favoritism. Providing personal and family references for jobs is common and expected. It is not unusual for personal relationships to supersede employment criteria.
- Low uncertainty-avoidance cultures promote risk takers, flexible roles and quick decision-making. Cultures high in uncertainty avoidance adopt a lot of test-taking and seek elaborate information from job applicants, such as age, family background, etc., to minimize or reduce any unpredictability in the hiring process.
- More information about how to conduct a Socrates Seminar is provided in the learning exercise document. Instructors should provide encourage students to ask numerous questions to ensure that they have a good grounding in national culture dimensions.
- Resumes are closely examined to identify successful work experiences, career stability and, most importantly, continuous academic achievements such as enrollment in relevant graduate classes, certification, etc. Such academic achievements are considered by the employer as a barometer of the potential learning capability of the applicant. The emphasis on learning and education can be linked to the cultural dimension of future orientation. Employee referrals and succession planning are predominant in the Indian work environment, especially for middle and upper-level jobs. Employers from collectivist cultures like India hire and promote employees whom they know. These staffing practices promote loyalty and retention. Employment testing is also common for entry-level positions. Potential employers subject applicants to rigorous math, analytical and communications tests to identify high-potential learners. It is believed that having such cognitive information about the applicant increases the reliability of the hiring process. Such extensive testing is associated with the cultural dimension of uncertainty avoidance. In India, the sheer magnitude and size of online recruiting is staggering by Western standards. On average, large Indian companies recruit about 10,000 entry-level positions annually; screening resumes for authenticity and relevance is a staffing nightmare.
- Indian job advertisements often specify educational qualifications and age requirements for potential jobs. Indian companies use branding in their recruitment process. The status-minded Indian employees like to work for employers that have a name and are well-recognized in employment and social circles. Therefore, newspaper advertisements frequently provide detailed company information. Subsequently, the employee is considered the “brand” and a walking advertisement for the company. Personal questions are often asked during the hiring process. Questions about marital status, caste and family background will be asked during the interview or on a bio-data form. Employers frequently discriminate on the basis of caste, which is easily recognizable by the first and last names. Verification of recent educational certifications, degrees and certificates is asked from applicants during the interview process. Married female applicants are frequently asked during the interview if they are planning to start a family. Please print and provide examples of state federal job applications to students. These can be found online at: http://governmentjob.googlepages.com/UppscAppl.JPG. Ask students to comment on the kind of information sought from applicants by Indian employers.
- Indian organizations spend quite a bit of money on training because it is considered an extension of academic learning, which is very valued in India. It also relates to the cultural dimension of future orientation, which makes employees seek any form of learning to have constant marketable skills. Among Indians, training creates loyalty to the company. For entry-level employees, there is often a large disconnect as to what they are taught in graduate school and what they have to do when they enter the workplace. Therefore elaborate entry-level training focuses on soft skills such as effective communications, team dynamics and also relevant product-based and technical knowledge. Training programs in India are more extensive and longer in duration. Entry-level employees are in training for between three and 12 months, depending on the size of the company. The average annual corporate training hours can range anywhere between 60 and 120 hours. The best company in providing training is Infosys, with an annual training budget of about $145 million. Entry-level Infosys employees spend about four weeks on initial training. Organizations often pair with both well-known local and international universities to provide continuing education for their employees. To learn more about training in India, instructors may want to review the following articles: Training 2008: World View, Focus on India (available at http://www.itapintl.com/focusonindia.htm). Top 5 IT firms spend $438 million on training (available at traininghttp://www.livemint.com/2007/11/12001337/Top-5-IT-firms-spend-438-mn-o.html).
- The collectivist culture of India makes performance management quite challenging. Superiors and subordinates develop close relationships, making a formal appraisal process difficult. Supervisors frequently inflate the work performance of subordinates because personal friendships between supervisors and subordinates blur objective evaluations. The Indian work culture also emphasizes organizational loyalty over performance and efficiency. Further, promotions are usually based on seniority, making organizational tenure an important performance criteria. Organizations usually have annual performance reviews with the supervisor providing comments on employees performance. However, leading Indian companies are adopting a very progressive approach to performance management by adopting a 360-degree approach or management by objectives (MBO). Instructors: Please read “Performance appraisal takes center stage” for more information about the Indian performance management system. This article is available online at http://hrinindia.multiply.com/journal/item/43/Performance_Appraisals_take_centre_stage_ .
- A base salary is provided with several other allowances that are typical to Indian employers. The base salary usually accounts for 40 to 50 percent of an employee’s salary. The remaining salary is comprised of several allowances. Housing is expensive in India, and employers often reimburse a portion of the housing expenses through a House Rent Allowance, or HRA. Medical allowances come in a variety of forms. Organizations may reimburse expenditures incurred by the employee or his or her family for medical treatment; pay a fixed allowance for routine check-ups; or participate in a group medical insurance policy. The dearness allowance (known as cost-of-living in the United States.) is calculated as a percentage of the base salary. It is an allowance provided to adjust the cost of living and may vary depending on the job’s location (rural vs. urban areas). Leave travel allowance (LTA) permits two tax-free travel opportunities in India within a four-year period. LTA is provided based on an employee’s salary and level in the organization. This includes employees and their family members. For more information about these additional allowances, instructors may want to read the following online articles: http://www.pacificbridge.com/publication.asp?id=31: Recruiting in India http://www.pacificbridge.com/publication.asp?id=30: Recruiting in India For public holidays in India, please read: http://www.worldtravelguide.net/country/120/public_holidays/Indian-Subcontinent/India.html
- There is a distinct retirement age in the private and public sectors. Public-sector employees retire at age 60. Private-sector employees have a choice of retiring anytime between ages of 55 and 60. Two specific retirement funds are available to all Indian employees: Provident Funds: This fund is similar to the 401(k) in the United States, where both employees and employers contribute. Gratuity: Employees do not contribute to this fund. It is calculated based on years of service.
- Organizations are seen as an extension of the family, and they often help employees achieve both personal and material goals by providing short- and long-term loans. Some organizations provide a variety of food at a subsidized cost, encouraging a family atmosphere.
- Executives or senior management are frequently offered special perks. These special perks are associated with increased social status. Employees in the Indian culture like to have visible indicators of increased status and wealth because they signify work achievement.
- The instructor should have students read the article in class. The students should jot down their answers for these three questions and then discuss their individual answers as a group.