The Indian subcontinent context

Citation

Budhwar, P. and Singh, V. (2007), "The Indian subcontinent context", Employee Relations, Vol. 29 No. 6. https://doi.org/10.1108/er.2007.01929faa.001

The Indian subcontinent context

The Indian subcontinent is the peninsular region of South Asia bound by the Himalayas in the North and East and the Arabian Sea, Indian Ocean and the Bay of Bengal mainly to the South. It usually includes countries like India, Bangladesh, Pakistan, Sri Lanka, Nepal and Bhutan (however, when the Maldives and Afghanistan are also included then the more used term is “South Asia”). The region covers about 4,480,000 km², or 10 per cent of the Asian continent and approximately 40 per cent of its population (Wikipedia, 2007). The GDP of the region grew by an average annual rate of 5.4 per cent during 1990-2003, which is considerably more than most other developing countries. This is mainly due to the strong economic performance by India. Despite impressive economic growth, the region scores very low on the human development index (including nutrition, education and health). It is home to 23 per cent of the world’s population but as much as 39 per cent of the world’s poor (Reddy, 2006). The subcontinent is not a homogeneous region and a lot of variations exist between its countries on key human development indicators, as highlighted in Table I (also see Bhattacharya et al., 2004).

Table I

Basic indicators of human development in the Indian subcontinent

It is worth noting that a strong development of the social sector (such as education and health) in Sri Lanka (from the 1970s onward) in comparison to other countries in the region is clearly responsible for its high performance on most human development indicators. However, the main economic development in the region was initiated from the 1980s onward, when the markets of Sri Lanka and later India, Pakistan, Bangladesh were deregulated and opened to foreign investors (see Chandrakumara and Budhwar, 2005; Khilji, 2004; Budhwar, 2001). Interestingly, the economic growth in the region is due to specific sectors in each country. In both Bangladesh and Sri Lanka it is due to the garment industry, and in India it was initially because of the software sector and then through information technology enabled services (ITeS) and business process outsourcing (BPO), along with a few other emerging sectors such as the pharmaceuticals. In The Maldives it is predominantly the tourism industry, and the same also applies to a limited extent to Nepal (for more details see Reddy, 2006).

In order to enhance intra-regional economic cooperation, in 2004 the national governments in the region outlined the plan to create a South Asian Free Trade Area (SAFTA) by 2016. The intention behind such an initiative is to create a South Asian Customs Union and eventually a South Asian Economic Union – similar to the European Union. To a great extent the success of such ambitions depend on how countries in the region deal with internal strife, conflicts, terrorism and natural disasters. The Indian subcontinent (with the exception of Bhutan and The Maldives) has suffered from widespread armed conflict (such as the ongoing civil war in Sri Lanka, Kashmir and militancy related conflict between India and Pakistan, and the increasing conflict between the Government and Maoist rebels in Nepal) and natural disasters (for example, the tsunami of 26 December 2004 and the 2005 earthquake mainly on the Pakistan side of Kashmir).

The movement of people both within and outside the region seriously impacts its economies and has implications for human resource management (HRM), such as recruitment and retention (also see Ramaswamy, 2003). Both legal and illegal migration from Nepal and Bangladesh to India has been substantial. This mainly involves low-wage and unskilled migrants. On the other hand, there has been large emigration of semi-skilled and skilled migrants from India and Pakistan, initially to the Middle East, and then of highly skilled migrants from India to North America and Western Europe. Similarly, in the 1980s lots of unskilled and semi-skilled migrants from Bangladesh and Pakistan went to Western Europe. From Sri Lanka migration has been mainly due to the internal ongoing war since the 1980s and also for economic reasons, such as many of female domestic workers moving to West Asia (see Reddy, 2006; Baruch et al., 2007).

Such a movement of people results in skills shortage and has serious implications for human resource development (HRD). On the other hand, remittances from migrants from the region working in West Asia, North America and Western Europe make a significant contribution to the economies of India, Pakistan, Bangladesh and Sri Lanka. For example, according to World Bank estimates, in 2003 India became one of the top recipients of remittances in the world (along with Mexico and China), totalling around $17,400 million. In the same year Pakistan and Bangladesh were fourth and seventh highest recipients of remittance incomes in the world, respectively, and such remittances in Sri Lanka were equivalent to 7 per cent of its GDP (for more details see Reddy, 2006). Apart from skills shortages, the region also suffers from a serious imbalance between rich and poor, a significant proportion of the population living below the poverty line, a high level of corruption affecting businesses, population pressure (India and Pakistan have the second and seventh largest populations in the world, respectively), poor infrastructure, less effective economic reforms, and increasing competition from East Asian countries. Despite these problems, the region has a lot to offer to businesses in the global context, such as India’s contributions in the sectors mentioned above. Along with other factors, effective and efficient management of human resources can play a significant role in the economic development of the region (Budhwar, 2004; Ramaswamy, 2003; Debrah et al., 2000).

Developments in Indian subcontinent people management

In comparison to most other parts of the world, the Indian subcontinent has less available literature related to people management. An analysis of the existing literature highlights the following picture. Not surprisingly, the majority of the publications are on India, followed by Sri Lanka and Pakistan, and less on other countries of the region. Within the Indian context, recently many scholars have examined a number of issues related to people management such as the evolution of the personnel function in India (Balasubramanian, 1995; 1994), the role of unions and industrial relations in the new economic environment (Seth, 1996; Sharma, 1992; Sodhi, 1994; Venkata Ratnam, 1996), the factors determining HRM (Budhwar and Sparrow, 1997), HRM and firms’ performance (Agarwala, 2003; Singh, 2003), HRM in multinationals (Venkata Ratnam, 1998; Amba-Rao, 1994), strategic HRM (Budhwar and Sparrow, 1997) and organisational learning capability (Bhatnagar and Sharma, 2005), employee relations (Budhwar, 2003), comparative HR in public and private sector organisations (Budhwar and Boyne, 2004; Bordia and Blau, 1998), emerging patterns of HRM in the business outsourcing sector (Budhwar et al., 2006), the applicability of Western HR models in India (Budhwar and Khatri, 2001), HRD (Rao et al., 1994) and training (Yadapadithaya, 2000), and comparative HR between India and other countries (Budhwar and Sparrow, 1997; Kuruvilla, 1996; Sparrow and Budhwar, 1997). Also, a number of researchers have examined various aspects of organisational behaviour and organisational dynamics (see, for example, Aryee et al., 2002, 2004; Kakar, 1971; Sahay and Walsham, 1997) and the influence of national culture of Indian HRM (see Sharma, 1984; Budhwar and Sparrow, 2002). The above examples give a clear indication about the kind of people management issues explored in the Indian setting. However, it is important to note that this is not an exhaustive list of works published on India (as the creation of such a list is not the focus of this article).

For the remaining countries of the Indian subcontinent there is scant literature available. For Pakistan, perhaps the work of Khilji (2002, 2003, 2004; Khilji and Wang, 2006) is most comprehensive. She has researched and written on various aspects of people management in Pakistan starting from the evolution of HR functions, factors determining HRM policies and practices, comparative HR in local and foreign firms, HRM and firms’ performance, and the challenges facing the HR function in Pakistan. The available literature on Bangladesh is primarily on management of the public sector and governance. Zafarullah (2006) analyses new tools and practices in public governance in both Pakistan and Bangladesh, and Sarker (2005, 2006) explores the factors influencing the success and failure of new public management initiatives in Bangladesh and Singapore.

Some researchers have recently pursued research projects on various aspects of people management in the Sri Lankan context. For example, Akuratiyagamage (2005, 2006) has examined issues related to management development in firms under different ownership in Sri Lanka. Chandrakumara and Sparrow (2004) analysed the impact of work orientation on HRM policies and practices. Wickramasinghe (2006) investigated the validity of training objectives. Some scholars have also initiated research in HR-related issues in Nepal. Adhikari and Mueller (2004) provide a good summary regarding the scene of HRM in Nepal. Gautam et al. (2005) examine the constructs of organisational citizenship behaviour and organisational commitment in the Nepalese context.

What can be derived from the above is that:

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  there is a scarcity of people management research in the Indian subcontinent;

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  there is a need to identify key themes along which future research should be pursued; and

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  there is very little evidence regarding the kind of methodologies which might be suitable for conducting useful research in the region.

At present, many of the above-mentioned researchers have adopted Western constructs and measures to examine HRM in the region and have found some interesting results. Given the heterogeneity of the countries within the region, and knowing the limitation regarding the applicability of Western constructs/measures elsewhere, it is important to further develop more region-specific instruments and conduct investigations using the them (Budhwar, 2004). In order to reveal the region- and context-specific nature of people management policies and practices there is a need to identify the main factors and variables that might be determining the same in the subcontinent.

Overview of this special issue

All the papers in this special issue have been specifically written for it. The contribution of Wickramasinghe and Jayabandu examines issues related to “flexitime”, such as employees’ attitudes towards it, their level of satisfaction with it, various hindrances in the adoption of flexitime, and the extent to which flexitime can be effectively used to attract and retain employees. This investigation is based on a sample of 108 employees in 30 software development firms. The findings reveal that flexitime allows autonomy to employees to harmonise between work and non-work demands and enables employees to balance work/life commitments. It is also evident that large companies are offering more flexitime initiatives in comparison to small firms. Further, employees find flexitime to be an important feature to have in their future workplaces. Not surprisingly, those employees who have not experienced flexitime are not yet convinced about its benefits.

The research by Chand and Katou investigates the linkages between both specific characteristics of hotels and HRM systems with organisational performance. The study is based on a questionnaire survey of 439 hotels operating in India. The findings reveal that both higher hotel category (i.e. four-star and four-star) and type of enterprise (i.e. whether the hotel is part of a chain of hotels) are positively related to performance variables. Further, HRM systems including recruitment and selection, manpower planning, job design, training and development, quality circles and pay systems are also contributing towards organisational performance.

Continuing with the theme of HRM and firms’ performance, the paper by Bjorkman and Budhwar examines the kind of HRM practices being implemented in the subsidiaries of foreign firms operating in India and the linkage between HRM practices and organisational performance. This research is based on both a questionnaire survey and interviews with 76 HR managers in as many subsidiaries. The results highlight that both a high-involvement HRM system and the local adaptation of HRM are positively associated with firm performance.

The contribution by Chandrakumara further provides empirical evidence of the impact of HRM fit on citizenship and task performance of employees in seven manufacturing companies in Sri Lanka. The analysis is based on a survey of 433 employees and managers. The findings confirm the thesis of a positive relationship between HRM fit and performance, especially more for citizenship performance than for task performance.

The article by Bhatnagar investigates relationship between talent management and levels of employee engagement. The research is based on a sample of 272 information technology enable services (ITeS) employees conducted using a of Gallup q¹² workplace audit and both focus group and exit interviews. The results indicate the existence of low levels of engagement during the early career phase of employees and its increase with job tenure. There is also a positive linkage between low employee engagement and employee attrition.

Biswas and Varma examine the relationship between psychological climate and employee performance in order to understand the conditions that foster high levels of in-role and extra-role performance. This research is based on a sample of 357 managerial employees working in both services and manufacturing organisations operating in India. The analysis highlights a positive relationship between an individual’s perception of psychological climate and their willingness to engage organisational citizenship behaviours as well as their levels of job satisfaction and individual’s work performance.

Along a similar line, Mathew’s research explores the impact of organisational culture on productivity and quality in two Indian software organisations. Phase one of the investigation is based on 119 in-depth interviews with software professionals, managers, directors, leaders, engineers and people from different functional specialisations. In phase two of the study a questionnaire survey with 463 different levels of employees was conducted. The results provide insight into the way cultural processes tend to influence productivity and quality in people centric and knowledge intensive work contexts of the Indian software sector.

Raman, Budhwar and Balasubramanian provide insights into the key HR challenges faced by knowledge process outsourcing (KPO) organisations in India and the kind of people management policies and practices adopted by these firms to address the same. The empirical evidence is based on one in-depth case study. The findings reveal significant differences in the nature of work characteristics of KPO firms and traditional call centres. The key HR challenges before these firms are in the form of the attraction and retention of talent. To a great extent, the adoption of innovative HR practices along with facilitative leadership helps in dealing with these challenges.

Finally, Gautam and Davis explore the nature of HRM in Nepal. The focus of the investigation is on the strategic integration of HRM into corporate strategies and the devolvement of responsibility for HR to line managers in 26 commercial banks and insurance companies operating in Nepal. The results indicate a relatively higher level of integration of HRM into the corporate strategy in comparison to the devolution of responsibility for HRM to line. The partial level of devolution is more born of a necessity in the absence of a strong HR function.

Pawan Budhwar, Virender Singh

About the Guest EditorPawan BudhwarProfessor of International HRM and Head of Work and Organisational Psychology Group at Aston Business School. He is also the Director for the Aston India Foundation for Applied Business Research and Aston Centre for HR. Pawan has published extensively in the fields of HRM, OB, international HRM and developing countries with a specific emphasis on India. His main research interests are in the areas of international HRM, cross-cultural management, management in emerging markets and work processes in Indian call centres. He has written and co-edited books on HRM in the Asia-Pacific region, HRM in the Middle East, HRM in developing countries and performance management around the globe.

About the co-authorVirender SinghReader in Marketing at the Institute of Management Studies and Research (IMSAR) at MD University, Rohtak, India. His main research interests are in the fields of marketing, consumer behaviour and management of people in the Indian context. His work has appeared in journals like International Journal of HRM and South Asian Journal of Management.