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Contemporary HR Policies and Practices

Author: Dr. Debaprasad Chattopadhyay, Faculty, Globsyn Business School

 

Abstract:

Personnel Management was rechristened as Human Resource Management (HRM). It was in 1969 that Prof. Leonard Nadler of University of Washington, D.C., in the annual conference of American Society for Training & Development held at Miami, USA, articulated the acronym, Human Resource Development (HRD). It was precisely five years down the line, namely, in 1974, that Human Resource Development was first implemented in India at Larsen & Toubro, thanks to the initiative and pioneering work undertaken by the Late Dr. (Prof.) Udai Pareekh and Dr. (Prof.) T.V. Rao, both then of Indian Institute of Management, Ahmedabad. Since then, the fields of HRM and HRD have progressed further transcending into values, ethics, spirituality and work-life integration. The purpose of this paper is to delve into some of the modern practices in the field of HR and decipher few Contemporary HR Policies and Practices as of date.

Introduction:

Personnel management changed into HRM and now traditional HRM is shaping up into people asset management. This involves Human Resource Development which is transparent and trustful and publishes internal policies as employees and managers have the certainty about the fair and equal treatment of all employees. Whereas HRM earlier used to exclusively cater to organizational needs, HRD now dovetails organizational needs, individual needs, national needs and global needs. The acronym HRD was first articulated in 1969 during the annual conference of American Society of Training and Development held at Miami, USA by Dr. Leonard Nadler, a Professor of University of Washington, D.C.. It was in 1974 that HRD was first implemented in India at Larsen & Toubro by Late Dr. (Prof.) Udai Pareekh and Dr.(Prof.) T.V. Rao, both then of IIM, Ahmedabad. The modern HR Management in terms of HRD cannot exist without fairness, honesty and openness. The HR policies earlier were inflexible. They were elaborating the detailed process but they did not explain the real purpose of the policy and the main decision principles included in the policy and its procedures. The Contemporary HR Policies and Practices are different. They are flexible and they navigate managers and employees. They set realistic expectations. The modern HR policies are in tandem with the corporate values and the corporate culture. The culture supporting the responsibility of employees and managers reflect in all such HR policies and procedures. Employees have to be accountable for their decisions and tasks and policies have to allow the freedom to choose the way of the best solution. The transparent HR practices cannot be easily transferred into the policy. The development of the transparent and fair policy is a long term process. Most new practices should not start with the development of the policy, they should have a pilot. The policy should be one of the results of the successful pilot. The modern policy supports innovations and does not build barriers to the organizational development. The policy defines the basic requirements and describes the decision process. It describes obligations of employees and managers. It includes a serious appeal procedure as the employee can complain about the individual procedure.

Literature Review:

The traditional HRM style mainly gives secondary or supportive role to personnel activities of a company. It mainly emphasized on collecting and organizing employee information, monitoring individual performance and implementing organizational policies (Appelbaum and Wohl, 2000). Although human concern came to limelight with the advent of HRM, still it could not acquire center stage. It was a passive and submissive execution of policies drafted by a few seasoned managers without participation of employees lower down the hierarchy. Further, traditional HRM also failed to forecast the challenges of the future. Therefore, there came a new avatar of HRM that started to understand the business strategy from personnel perspective. Modern HRM tends to formulate the corresponding management strategy on human resources to improve delivered service. Also, modern HRM starts to act as a strategic partner with top management team (Beer, 1997; and Mohrman and Lawer, 1997).A transformation in HRM could be visualized through two angles: firstly, the main tasks of HR professionals have changed drastically and a slow and gradual redesigning of structure of HR department is taking place (Selmer, 2001; and Rowley and Bae, 2002).The center of the modern HR work is no longer restricted to basic administration, but it has taken decisive leap towards management consultant and strategy aspects. Secondly, the basic philosophy and approach of HRM have changed a lot. Modern HRM focuses on employee empowerment rather than emphasizing on employee participation. Personnel management changed into HRM and now traditional HRM is shaping up into people asset management. The domain of HRM is receiving renewed attention (Horton, 2003). New improved HRM could facilitate the effective recruitment and retention of valued staff, enhance organizational effectiveness and lend a helping hand in institutionalizing a performance-driven culture through the adoption of a more strategic HR role (Bach and Della Rocca, 2000; and Jaconelli and Sheffield, 2000). HR functions are moving away from their traditional administrative roles and are becoming strategically more involved in their organizations (Bach and Della Rocca, 2000). This new version of HRM has been named as High Performance Work System (HPWS) which includes High Performance Work Practices (HPWP) and Employee Readiness. These practices were called by different names such as ‘high performance work systems’, ‘alternate work practices’ and ‘flexible work practices’ (Delaney and Godard, 2001). There exist various nomenclature and theories regarding HPWS. But unanimously, the practices were defined as an instrument of value creation and value enhancement. The concept of HPWPs has now come to be promoted as ‘best and revolutionary practices’. The modern performance practices are associated with higher performance level than those associated with traditional workplace and employment-related practices (Godard, 2004).Van Buren and Werner (1996) stated that one of the essential elements of HPWPs is employee empowerment. But there is no unity among researchers on what constitutes HPWPs. A wide range of practices are associated with the high performance paradigm (Becker and Gerhart, 1996). The same was supported by Godard (1999) stating that there exists considerable variations in how HPWPs are practiced in reality. Godard (1999) dilated that HPWPs can be divided into two types of practices: alternate work practices and high commitment work practices. Alternative work practices include alternate job design practices like job enrichment, job rotation, etc., and formal participatory practices like quality circle, etc.; and high commitment practices include sophisticated training and development, behavior-based appraisal and advancement criteria. Further, Thompson (2001) divided HPWPs into three heads: (a) high involvement practices that include semi-autonomous team, problem-solving team, etc.;(b) HR practices to build skill, motivation and ability that constitute formal recruitment, regular and holistic performance appraisal, training and development etc.; (c) employee relation to build trust and loyalty among employees. HPWPs and systems were identified as playing an important role in helping firms to reach their business goals and objectives. These work systems tend to improve organizational effectiveness (Boxall and Macky, 2009). HPWPs were found to have a strong positive impact on challenges associated with the operation of a firm, including performance, labor turnover, sales per employee, financial results, etc. (Wood, 1999). These practices are perceived as ‘psychological contract’ between the management and the workers. They foster fairness and trust among employees as they make management deliver on promises and commitment (Guest,2002). These practices enable workers to develop and apply their knowledge and skill at the workplace. HPWPs are beneficial for all: employer, employee and union. The work system creates opportunities for union to revitalize their role and enables them to discard their traditional role in favor of a new role of being the harbinger of employee satisfaction. Thus, they help in building a constructive partnership between these three pillars (Kochan and Osterman, 1994). HPWPs are attractive to government officials and policy elites too. These practices help to address market problems not through strict labor laws rather through practices that enhance performance and participation of an employee. It relieves officials from being an arbitrator in a conflict between employee and employer. These practices concentrate on empowering and enriching employees through increased information flows and devolution of decision making. Thus they are associated with increased employee productivity and loyalty for organization (Wood, 1999).Strategic Partner role of HR transcends to that of Administrative Expert followed by Employee Champion and then to Change Agent. The Psychological Contract referred to above comprises of Cooperative Contract in it’s refinest form originating from Coercive Contract and then Calculative Contract. Once Cooperative Contract is established, it results into Employee Readiness. Employee readiness has been described to inscribe employees’ belief and perception for change. Madsen (2003) defined employee readiness as employees’ mental and physical preparedness for prompt action that looks to improve, alter, vary, or modify existing situation. Armenakis et al. (1993) also measured readiness employees’ beliefs, attitudes, knowledge, perception and intentions. Literature suggests that employee readiness may be altered by workplace factors or individual factors like employee awareness and perception. Both factors are essential to develop employee readiness to incorporate a change. Further researches have explored various other linkages between readiness and individual attitudes and preferences (Eby et al., 2000). Cunningham et al. (2002) stated that employees’ awareness level plays an important role in the mental and psychological preparedness of an employee. Kapoor (2012) also emphasized on awareness factor. Further Kapoor (2012) stated that apart from awareness, employees’ perception tends to play a constructive role in the effective implementation of a practice. Robinson (2006) explained that perception is the key factor that commands the individual response to stimuli. According to Robinson (2006), employee categorizes the raw data and makes sense of these input situations as per their own unique and personal biological, social and psychological framework of mind and exposure. Biological framework includes gender, inherited traits, habits, etc. Psychological frame is reflected by one’s personality, past experiences, knowledge, expectations, current needs, priorities and interests. These studies gave immense importance to individual characteristic as a determining factor of employee perception.

Methodology:

The prime objective of the present research is to explore employee readiness for modern HR practices, i.e., for HPWPs. The incidental objectives of the present research are as under:

  • To study employees’ awareness and perception regarding effectiveness of HPWPs and also to explore availability of modern HR practices.
  • To examine gender, age, experience and educational qualification-based individual variations in employee readiness.
  • To explore variations in employees’ readiness in public and private, in service and manufacturing, and in India and foreign-based firms.

The present study is based upon exploratory-cum-descriptive research design and has used secondary data.

Findings and Discussion:

The following modern trends emerged post-survey of secondary data:

  • Outsourcing: It is the buzz word and makes the task of attaining strategic advantage over the competition much easier. These days the complete HR functions are being outsourced to reduce the burden over the in-house managers so that they can concentrate on much important human resource functions
  • Green HRM: Green Human Resource Management is emerging as an important thrust area for management which can have an enormous impact on people issues in an organization. The term ‘green HR’ is often used to refer to the contribution of HR policies and practices towards the broader corporate environmental agenda of protection and preservation of natural resources. When we talk about Green HR, two essential elements have to be considered: environmentally friendly HR practices and the preservation of knowledge capital. Green HR can adopt various Green processes and practices in different HR functions like acquisition of human capital, their induction, training, performance management and reward management which will have a bearing on the overall carbon footprint of a company.
  • Worker Expectations and Values: The need for empowerment and equality has forced the modern HR practices to evolve. Employees look for involvement and care about their contribution towards the organization. Managing and looking after the employee expectation and values aspects form the major part of any HR practice
  • The work-life integration: The old adage, “all work and no play make jack a dull boy” holds true even in a workplace. It is important to maintain the professional and personal balance or it could lead to several problems that could affect an employee’s life. Formulating a balanced policy isn’t easy and it is a challenge for an HR manager to come up with one. These days most modern HR practices include the option of working from home
  • Bilateral Communication: Improper communication is the root cause of several misunderstanding in an organization. It is very important that both the top management and the general employees can communicate freely and smoothly
  • Managing Diversity: We live in a global village which has shrunk to an extent that people have started moving and are now working in different cultural, racial, religious conditions. Managing such diversity is not easy and hence more modern hr practices and broader policy initiatives are required
  • Workplace Ethics and Spirituality: Rectitude and Care coupled with compassion for employees are fast emerging are potential tools for promoting sustainability thereby curbing high attrition-rate

Employee readiness is a sequel to modern HR practices. Measures like flexi-timings and home-working, virtual offices have been key drivers. Although companies dither to incorporate modern hr policies and practices for fear of uncertain outcomes, those which have done so, have actually benefited from resorting to contemporary practices. While on this, private-sector companies are more prone to include modern policies as public-sector companies have to await long-drawn vetting procedures from their concerned ministries. Genderwise, females are more amenable to implementing/adopting newer approaches and the Millennials are relatively faster to adjust with progressive approaches than their Generation-X or Baby-boomers counterparts. Service sector organizations are swift to respond as manufacturing firms have to be slow-paced on this front as their fixed cost components are proportionately high. Foreign-firms have access to newer techniques chipped in from their respective home-countries as against Indian firms as Trade Union interventions and industrial relations issues need to be borne in mind.

Conclusion:

The shift towards modern tools, practices and culture of HRM is an essential and persistent aspect of every modern-day organization. Relentless and cut-throat competition has forced every organization to upgrade its management of human resource in the most efficient and effective way. HPWPs are more a necessary than a choice for HR managers. But no practice could be implemented without any ground work or without fulfillment of designated prerequisites. Here employees’ readiness acts as a major precondition for successful institutionalization of any modern HR practice. The study reflects the need for tailor-made planning to acclimatize employees to high performance system with different individual characteristics. Study of interaction between individual and organizational variable is an innovative pursuit of the paper. Researchers believe that HPWS is a complex system and has been affected by various factors. Thus interaction between these variables highlights various permutations and combination for a HR practitioner. Future researchers could explore the probable reasons for such widespread variations in employees’ readiness. Further, researchers have an option to explore various other determinants of employees’ readiness. Researchers have defined a number of factors determining the readiness of employees. The present paper could study only from secondary data. Future researchers can include primary data with statistical analysis with interpretation of results thereof.

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