REVIEW OF LITERATURE

Review of Literature is the soul and the light of the research. The researcher is being

guided by the relevant and related literature available in regard to the topic of the research.

The researcher has to carry on adequate and effective literature to support and validate his

research. The research will be accepted as a scientific research only when the Review of

Literature is done. The review of literature helps the researcher in understanding the concepts

and theories involved in the study.

Hence, the researcher has taken up review of literatures relevant and related to the topic

to help him carry on his research on the right direction.

Human resources play a vital role in community, organization and country as a whole.

The growth of any organization is having a direct correlation with its human resources. The

human resources are highly perishable and critical in its nature. So the resources have to be

monitored on an on going basis. There are so many factors which contribute to the growth of

human resources development. They are generally called as ingredients or the tools of the human

resources. They are;

 Selection, recruitment &placement

 Training and development

 Performance appraisal &counseling

 Reward – punishment

 Career planning

 Managerial succession plan

 Quality of work life

 All the above mentioned factors are very much essential and specific exercises have to be

undertaken to harness the effectiveness of human resources. They have to be planned

systematically and must be continuous

 Highlight Performers

 Open House Discussions & Feedback Mechanisms

 Reward Ceremonies

 Delight Employees with the Unexpected

1. Safe, Healthy & Happy Workplace

Creating a safe, healthy and happy workplace will ensure that your employees feel at

home and stay with your organization for a very long time. Capture their pulse through employee

surveys.

2. Open Book Management Style

Sharing information about contracts, sales, new clients, management objectives, company

policies, employee personal data, etc., ensures that the employees are as enthusiastic about the

business as the management. Through this open book process, you can gradually create a culture

of participative management and ignite the creative endeavor of your work force. It involves

making people an interested party to your strategic decisions, thus, aligning them to your

business objectives. Be as open as you can. It helps in building trust and motivates employees.
Employee Self Service Portal, Manager On-Line, etc., are the tools available today to the

management to practice this style.

3. Performance-linked Bonuses

Paying out bonuses or having any kind of variable compensation plan can be both an

incentive and a disillusionment, based on how it is administered and communicated. Bonus must

be designed in such a way that people understand that there is no payout unless the company hits

a certain level of profitability. Additional criteria could be the team's success and the individual's

performance. Never pay out bonus without measuring performance, unless it is a statuory

obligation.

Management institutes face the challenge of reorienting their courses to reflect newer

HRM concepts. The department of management studies at IIT-Madras has attempted such

changes.

Human Resource Management is much discussed in today's business world. But how

well is it understood? In a world where people's competencies and skill sets are described in

paragraphs rather than in a few words and where media reports of salaries make us do a double-

take to ensure that seeing is indeed believing, it is becoming increasingly challenging to manage

this high potential we consider as the country's asset.

Earlier considered a support function for any business, HRM today is required to take on

a more strategic role in order to align itself with the organisation's business strategies. Hence, the

HR manager is expected to take on the mantle of a business partner along with managers of other

line functions, in driving the firm's strategies.

 The shift in focus from traditional HRM to strategic HRM was inevitable. Competitive

advantage for an organisation lies not just in differentiating a product or service or in becoming

the low cost leader but in also being able to tap the company's special skills or core competencies

and rapidly respond to customer's needs and competitor's moves. HR management can play a

role in identifying and analysing external opportunities and threats that may be crucial to the

company's success. It is in a unique position to supply competitive intelligence that may be

useful in the strategic planning process.

Competency mapping

With the growth of the industries in the `knowledge-verticals', human talent is

undoubtedly the most important asset today. To make sure that a company selects the right

person for the right job, and manages him/her carefully, processes like competency mapping are

gaining ground. Competency mapping is a process of identifying key competencies for a

particular position in an organisation, and then using it for job-evaluation, recruitment, training

and development, performance management, and succession planning. In conjunction with the

balanced scorecard, this can be an extremely robust tool to manage an organisation's

performance. Despite the growing level of awareness, however, in India, competency

development and mapping still remains in the nascent stages of implementation.

As far as the HR function is concerned, the time has perhaps come where it needs to be

treated as a line function with every manager having HR activities as part of his line

responsibilities, rather than treating HR as a separate, support-providing activity only. Today's

manager is expected to wear multiple hats — that of a leader, internal change agent, coach,

counsellor, mentor — in addition to his/her `technical' responsibilities. This would entail that
every manager, irrespective of his/her functional area of specialisation, would have to have a

thorough grounding in concepts and processes of HR.

At the IIT-Madras Department of Management Studies, the curriculum followed in the

HR area of specialisation reflects a response to these changing trends, where, in addition to

incorporating the newest trends and best practices in the traditional HR course curriculum, newer

courses in cross-cultural management, change management, and international HRM attempt to

familiarise the students with new concepts.

It has become fashionable among organisations to use terms such as HRD (Human

Resource Development) and HCM (Human Capital Management) as being representative of the

changing trends in HR practices. Merely renaming the function is however not going to be

sufficient. The need of the hour is for premier institutes such as the IIMs, IITs as well as other

professional institutions to rise to the occasion and re-design their curriculum and pedagogical

methods in consultation with the industry, in order to train their students to meet the changed

expectations of the industry.

A dominant theme within the human resource management (HRM) literature concerns

the identification of "best practices" that will enhance both organizational performance and

employee commitment. Although research exploring the impact of these practices at the level of

the individual is considerably limited, it is implied that they may be applied both across and

within organizations, yielding favourable outcomes such as higher organizational performance

and enhanced employee commitment. This is despite claims that commitment is

multidimensional and that certain organizational and individual variables are related to different

forms of commitment. It is possible that organizations seeking to promote commitment might

need to tailor HR practices to suit employees' needs, thus challenging the best practice

perspective at the employee level. This article extends on the literature by examining whether the

relationship between attitudes towards HR practices and commitment is moderated by career

stage. The empirical research is based on an employee attitude survey within three financial

service organizations in Ireland (N = 288). Using hierarchical regression analysis, the findings

show that interaction effects are evident regarding attitudes towards HR practices and affective,

continuance, and normative commitment. The implications of these findings for the management

of commitment are discussed.

The Foremost and prime HR function in any organization is recruiting the right person

and then getting requisite quality and quantity of work (Read productivity) for a reasonable

period of tenure, in line with organizational goals (Do most of organizations and the top HR

Bosses themselves know about it?). One can call it Strategic Human Resource Management,

which uses various tools and techniques for motivation, appraisal, training, cross cultural

management, emerging issues in personnel laws like, sexual harassment and competence

mapping, etc.

In fact HR function is main responsibility of a supervisor and not of a HR Department,

and higher goes the role and scope of responsibilities, higher the supervisor in Organization

Hierarchy. In many organizations, for instance, IT industry, one has very loose or flattish

hierarchy due to knowledge workers outfit.

Over the decades HRM became a separated out function graduating from a simple Time

Office function to a high profile Division in organizations until recently when most of HRM

functions have been leased out (Outsourced) and what is left with HR departments is Planning
and Strategy. But unfortunately the supervisors have abandoned their prime responsibility to

manage men and think that this better be taken care of by HR Specialists. This is simply a myth.

Increasing globalization and migration of labor in both directions like the financial

capital, the challenges of staffing, retention and motivation of highly skilled workers from wider

canvass and background and even education background, is really serious issue that better be not

ignored by Businesses.

My experience in Corporate sector in India in various types of organizations ranging

from Steels to Textiles, Chemicals and Services sector has been quite amusing and educative as

far as the way HR has been handled by various types of entrepreneurs in India right from SBEs

to the so called Large corporate units.

Majority of Indian businesses still treat employees as commodities and expect them to

come trained and skilled in specific areas they are hired for (Even in US it is not feasible despite

Industry Institutes interface). Hire and fire has been very popular policy in India and suppressing

welfare laws regarding labor has been a favorable pass time, and matter of satisfaction & pride

for Indian Businessmen. It was often observed by me that rapid expansion of businesses were

scarcely accompanied by timely organizational structuring, expansion, training and growth in

pace with such expansions and thus most of such expansions fell flat, even destroying their

existing business lines and profitability.

The problem with HRM is that one cannot use clear cut formula that can be applied in

particular situations due to highly subjective, emotional and cultural deviation amongst the

employees.
 Secondly skilled and committed workers will become more and more scarce commodity

due to rapid global expansion of business, high aspiration levels, fast growth mentality of youth

including job-hopping, mobility of labor across borders and rapidly changing technologies.

This is just too much to handle for traditional HR experts and involvement of Top line

functional supervisors is essential for strategic growth of organizations. Indian businesses have a

soft belly there due to still continuing contemptuous and casual attitude towards employees.

As we move from Time Office to Personnel Management and on to HR Management to

Human Asset management to Intellectual Capital paradigms, drastic changes in HR practices and

HR organizations in Businesses is inevitable.

Another thing to understand is that there is not very strong correlation between wages &

incentives and motivation level of employees as is generally thought. Motivation and stability of

employees is rather complicated task determined by several volatile factors, for instance, cultural

background, family unit, education level and type, age, job satisfaction and so many others still

not fully understood.

It is another myth of HRM that giving doses of some foreign trip and 50 or 100 hrs of

boring and stereotyped training sessions (requirement of TQM, ISO 9000 also) will raise

motivation, skills and work style standards of employee. Most important change required is

commitment, interest and achievement motivation within framework of organizational goals.

One thing is very clear from above discussions that Quality and stability of Employees in

organizations is going to be key differentiator and even main foundation for survival of a

business in coming times and that too in highly nebulous environment of labor markets.
 The third Myth worth mentioning is that employees always work better by giving better

facilities, rewards and training sessions. I have found it to be doubtful in most situations. In fact

the best way to train and induce employee to work and achieve higher is to create slight stress in

work environment and little bit of job in security. As they say, throw the child in waters and it

will pick swimming faster- very well applies to all human activities. There is no substitute for

experience gained repeatedly by varied situations of decision-making and it is really confounding

as to why inexperienced graduates from B-schools colleges are paid unreasonably high wages.

Some one may like to deeply probe the issue whether such high remunerations are really

effective in extraordinary achievements of organizations?

One of the main reason for rise in corruption and materialistic pursuit by public sector

employees is envy towards unusually high wage rates in so called hi-fi and MNC organizations

around the globe, particularly in countries like India that are having poor quality of Public

Administration, public awareness and legal systems.

We can see that there is acute crisis facing the HR Managers who are yet to get their own

roles re-defined and who have to find or create leaders in multi cultural setting in a highly

competitive business environment and tight job market, with very high attrition rates in some

sectors, like in Call Centers and software industries, and developing requisite inner motivation

levels and soft skills that are often neglected in promotions and wage fixations (Here 'wage' is

being used as a generic term for all kinds of compensation structures at all levels).

While loyalty can be developed and maintained in employees, I would like to explode

fourth Myth in HRM by revealing the fact that loyalty also has frequently roots in ethical,

community and genetic background (We may call these attitudes, or inherent attitudes or life
positions taken by an employee during initial grooming in young age). There is need to develop

yet more effective psychometric tests or procedures to sift the candidates for right combination

of IQ, EQ and loyalty index (I would like to find a formula for this term). One big damage

globalization has done is to popularize the western materialistic high-growth rate focused

employee culture   prevalent in US where employees have little emotional concern with

organizations they work (Even Japan is fast becoming victim to this epidemic!).

Another challenge facing Organizations is to handle legal pressures relating to employee

related laws of newer types like gender bias, racial or caste bias in employment, sexual

harassment (At least two very senior officials of Indian Organizations have already been charges

or accused of this in USA), ethical issues in handling organization information and challenges of

multi-ethnic or multi-cultural staffed work places.

Work place diversity is a good major of challenge in Organizations. This will grow in

near future. According to Thomas (1992), dimensions of workplace diversity include, but are not

limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation,

educational background, geographic location, income, marital status, military experience,

religious beliefs, parental status, and work experience.

The future success of any organizations relies on the ability to manage a diverse body of

talent that can bring innovative ideas, perspectives and views to their work. The challenge and

problems faced of workplace diversity can be turned into a strategic organizational asset if an

organization is able to capitalize on this melting pot of diverse talents. With the mixture of

talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond
to business opportunities more rapidly and creatively, especially in the global arena (Cox, 1993),

which must be one of the important organizational goals to be attained.

A key issue that influences success in international arena is the awareness of cultural

differences and thus development of both a business strategy and corresponding HR strategy that

is consistent with the culture of host country. The interface between culture of the organization

and culture of host country become important. Instead of leaving these issues to be tackled by

HR personnel, the senior executives in international business arena have to take the HR

strategies and solutions in their own hands.

More and more Informational technology is being used in organizations to deliver HR

services (Example HRSC of IBM) and a good part of these are being outsourced. This is natural

outcome in changing business environment and brings in both advantages of expertise and

economics. Large organizations otherwise also cannot cope with information exchange

requirements in huge staffed organization in traditional manner unless they follow IBM like I

nitiatives. The example of IBM HRSC is an attempt to combine people, technology and customer

service, much as it does with its external customers. The center service about 20 business units in

areas including benefits, retirement planning, compensation, employee suggestions, staffing, job

posting, orientation, performance management, EEO compliance, employee separations, leave of

absence, and skill development through 80 customer service representatives. This will be more

or less true for all leading organizations in services sector in particular in near future. IBM too

had repositioned itself as service driven organization.

Indicator Traditional HR Strategic HR
Responsibility for HR Staff Specialists Line Managers

Focus Employee Relations Partnership with internal and

external customers

Role of HR Transactional, Change follower and Transformational, change leader and

respondent initiator

Initiatives Slow, reactive and fragmented Fast, proactive and integrated

Time Horizon Short-term Short, medium, Long (as necessary)

Organic-Flexible, whatever is

Control Bureaucratic-roles, policies, procedures necessary to succeed

Tight division of labor, independence, Broad, flexible, cross training, teams

Job design specialization

Capital, Products People, knowledge

Key investments

Cost center Investment center

Accountability
The traditional HR function

As the situations opening this illustrates, traditional actions by HR practitioners and

traditional expectation for the HR function by line managers and other stakeholders sometimes

interact to create a conspiracy of failure for the HR function. These problems can be classified

into several common complaints about traditional HR practices and into several specific

problematic roles thrust upon HR practitioners. Both the complaints and problematic roles are

worthy of review, since they help shed light on the needs for a new way of thinking about the HR

function.

The traditional HR assumes a role of handling transaction as they arise. In India in most

of organizations that are still bossed by 60+ adults from orthodox family business background

(Babu ji culture), the role of HR personnel is not understood by them and they mostly serve as

front for the CEO's decisions ranging from hiring, firing, wages, promotions and all kinds of

manipulations. The traditional HR itself branched out as scientific division of labor relieving line

managers from highly subjective, time consuming and inconvenient activities related to

employee and which were not considered crucial to profit making and growth of organization.

Strategic HR plays role of transformational change agent with focus on and in line with long

term or strategic goals of organization.

To become strategic the HR managers will have to be drawn from general Management

rather than specialist training background, have to adopt long term and strategic focus and

persuade management to look beyond current performance. Further, most of senior executives

including entrepreneurs themselves hardly appreciative benefits and possibility of HRM as

strategic partner. In fact most managers view HR with dislike being rule machines that hinder

flexibility and carrying out of jobs.

It is surprising but true that most senior executives in India as well as owners view human

assets as liability and not owned by them and therefore a high-risk investment. HR activities in

organizations are mostly taken up to do face lifting and present modernized face of organization

because the direct benefits of HR are difficult to see and quantify. The HR and training budgets

get axe first when need arises to do so.

A dominant theme within the HRM literature concerns the identification of 'best

practices' that will enhance both organisational performance and employee commitment. Though

research exploring the impact of these practices at the level of the individual is considerably

limited, it is implied that they may be applied both across and within organisations, yielding

favourable firm level outcomes and employee behaviours. There is growing support among

researchers for a more complex understanding of commitment. Meyer and Allen (1997) suggest

that commitment is best viewed as multi-dimensional, comprising affective, continuance and

normative dimensions. Employees displaying each dimension of commitment will remain in an

organisation because they feel that they want to, need to or ought to do so. Research suggests

that certain organisational and individual variables are related to different forms of commitment.

There is also evidence that both commitment and work attitudes differ over the stages of an

employee's career. This presents the possibility that organisations seeking to promote

commitment may need to tailor HR practices to suit employees' needs, thus challenging the best

practice perspective at the employee level. This paper extends on the literature by examining

whether career stage has a moderating influence on the HR-commitment relationship. The
empirical research is based on an employee attitude survey within three financial service

organisations in Ireland (N= 288). Using moderated multiple regression, the findings highlight

the extent to which interaction effects are evident regarding attitudes towards HR practices and

continuance and normative commitment, though not affective commitment. The implications of

these findings for the management of commitment are discussed

The construct of human resource (HR) attributions is introduced. We argue that the

attributions that employees make about the reasons why management adopts the HR practices

that it does have consequences for their attitudes and behaviors, and ultimately, unit

performance. Drawing on the strategic HR literature, we propose a typology of 5 HR-attribution

dimensions. Utilizing data collected from a service firm, we show that employees make varying

attributions for the same HR practices, and that these attributions are differentially associated

with commitment and satisfaction.

As organisations battle to get the most from their existing people in an environment

characterised by skill shortages, the role of human resource practices in fostering employee

engagement and commitment is paramount. This paper reports the findings of an Australian

study, which examined the current relationship between human resource management practices

and the retention of core (critical) employees working in nine organisations. This research

specifically, reports on the conditional nature of the relationship between organisational and

human resource practices, and commitment. The findings of the study have important

implications for human resource academics and practioners.

Its features include:

  Organizational management

 Personnel administration

 Manpower management

But these traditional expressions are becoming less common for the theoretical discipline.

Sometimes even employee and industrial relations are confusingly listed as synonyms,[4]

although these normally refer to the relationship between management and workers and the

behavior of workers in companies.

The theoretical discipline is based primarily on the assumption that employees are

individuals with varying goals and needs, and as such should not be thought of as basic business

resources, such as trucks and filing cabinets. The field takes a positive view of workers,

assuming that virtually all wish to contribute to the enterprise productively, and that the main

obstacles to their endeavors are lack of knowledge, insufficient training, and failures of process.

Human Resource Management(HRM) is seen by practitioners in the field as a more

innovative view of workplace management than the traditional approach. Its techniques force the

managers of an enterprise to express their goals with specificity so that they can be understood

and undertaken by the workforce, and to provide the resources needed for them to successfully

accomplish their assignments. As such, HRM techniques, when properly practiced, are

expressive of the goals and operating practices of the enterprise overall. HRM is also seen by

many to have a key role in risk reduction within organizations.[5]

Synonyms such as personnel management are often used in a more restricted sense to

describe activities that are necessary in the recruiting of a workforce, providing its members with
payroll and benefits, and administrating their work-life needs. So if we move to actual

definitions, Torrington and Hall (1987) define personnel management as being:

“a series of activities which: first enable working people and their employing organisations

to agree about the objectives and nature of their working relationship and, secondly, ensures

that the agreement is fulfilled" (p. 49).

One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4

fields for the HRM function

 Strategic business partner

 Change management

 Employee champion

 Administration

However, many HR functions these days struggle to get beyond the roles of administration

and employee champion, and are seen rather as reactive than strategically proactive partners for

the top management. In addition, HR organizations also have the difficulty in proving how their

activities and processes add value to the company. Only in the recent years HR scholars and HR

professionals are focusing to develop models that can measure if HR adds value.[7]

HRM strategy

An HRM strategy pertains to the means as to how to implement the specific functions of

HRM. An organisation's HR function may possess recruitment and selection policies,

disciplinary procedures, reward/recognition policies, an HR plan, or learning and development

policies, however all of these functional areas of HRM need to be aligned and correlated, in

order to correspond with the overall business strategy. An HRM strategy thus is an overall plan,

concerning the implementation of specific HRM functional areas.

An HRM strategy typically consists of the following factors:

 "Best fit" and "best practice" - meaning that there is correlation between the HRM

strategy and the overall corporate strategy. As HRM as a field seeks to manage human

resources in order to achieve properly organisational goals, an organisation's HRM

strategy seeks to accomplish such management by applying a firm's personnel needs with

the goals/objectives of the organisation. As an example, a firm selling cars could have a

corporate strategy of increasing car sales by 10% over a five year period. Accordingly,

the HRM strategy would seek to facilitate how exactly to manage personnel in order to

achieve the 10% figure. Specific HRM functions, such as recruitment and selection,

reward/recognition, an HR plan, or learning and development policies, would be tailored

to achieve the corporate objectives.

 Close co-operation (at least in theory) between HR and the top/senior management, in the

development of the corporate strategy. Theoretically, a senior HR representative should

be present when an organisation's corporate objectives are devised. This is so, since it is a

firm's personnel who actually construct a good, or provide a service. The personnel's

proper management is vital in the firm being successful, or even existing as a going

concern. Thus, HR can be seen as one of the critical departments within the functional

area of an organisation.
  Continual monitoring of the strategy, via employee feedback, surveys, etc.

The implementation of an HR strategy is not always required, and may depend on a number

of factors, namely the size of the firm, the organisational culture within the firm or the industry

that the firm operates in.

An HRM strategy can be divided, in general, into two facets - the people strategy and the HR

functional strategy. The people strategy pertains to the point listed in the first paragraph, namely

the careful correlation of HRM policies/actions to attain the goals laid down in the corporate

strategy. The HR functional strategy relates to the policies employed within the HR functional

area itself, regarding the management of persons internal to it, to ensure its own departmental

goals are met.

Functions

The Human Resources Management (HRM) function includes a variety of activities, and

key among them is deciding what staffing needs you have and whether to use independent

contractors or hire employees to fill these needs, recruiting and training the best employees,

ensuring they are high performers, dealing with performance issues, and ensuring your personnel

and management practices conform to various regulations. Activities also include managing your

approach to employee benefits and compensation, employee records and personnel policies.

Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves

because they can't yet afford part- or full-time help. However, they should always ensure that

employees have—and are aware of—personnel policies which conform to current regulations.

These policies are often in the form of employee manuals, which all employees have.
 Note that some people distinguish a difference between HRM (a major management

activity) and HRD (Human Resource Development, a profession). Those people might include

HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel

inside of organizations, including, e.g., career development, training, organization development,

etc.

There is a long-standing argument about where HR-related functions should be organized

into large organizations, e.g., "should HR be in the Organization Development department or the

other way around?"

The HRM function and HRD profession have undergone tremendous change over the

past 20–30 years. Many years ago, large organizations looked to the "Personnel Department,"

mostly to manage the paperwork around hiring and paying people. More recently, organizations

consider the "HR Department" as playing a major role in staffing, training and helping to manage

people so that people and the organization are performing at maximum capability in a highly

fulfilling manner.