Identifying the “Best” Human Resource Management

Practices in India: A Case Study Approach

Pramila Rao

School of Business Administration, Marymount University

2807 North Glebe Road, Arlington, VA 22207-4299, U.S.A.

Abstract. The primary purpose of this research paper is to detail the human

resource management (HRM) practices of three Indian companies identified by

Mercer, the global consulting firm, as the best companies to work for in India in

2008. The human resource management practices that were researched were

recruitment & selection, training & development, performance appraisal, and

compensation & benefits. India is becoming a major player in the Asian

economy and US multinationals are significantly increasing their presence in

India.

This qualitative paper uses a design strategy of purposeful sampling which

provides rich information about the distinctive companies sampled. The

primary method of data collection was interviews that were tape-recorded,

which was followed by transcription of the data. The data analysis strategy

involves studying each unique case, with cross-analysis following the

individual case studies.

These “best” companies demonstrated a very superior work culture, an

elaborate recruitment system, rigorous training and development, performance-

based work culture and unique benefits. These Indian companies definitely

walked that extra mile to make employees feel motivated, engaged, and

committed.

This study provides successful HRM practices that multinationals can adopt for

their business units in India. Further, this paper highlights the HRM practices

that are integrated with information technology providing an idea of what

human resource management information systems (HRIS) are successful also.

This research proposes a HRM model identifying best practices of this research

that can be emulated by global HRM practitioners. The paper advances theory

by integrating resource-based theory and HRM practices of best companies to

augment the understanding of strategic human resource management better.

1 Introduction

India has become a very important economic power in the today’s international

economy. Economists suggest that it will be the third largest economy in 2040 [18,

31]. There are several reasons that India has become such an economic power today.

The Indian software industry is very instrumental in the attention the country is

receiving today [7]. The country has a very well-educated English-speaking work

force that can communicate easily with other English-speaking cultures. The

country’s work force is also commended for its high work ethic, willing to work 12-

Rao P. (2009).

Identifying the “Best” Human Resource Management Practices in India: A Case Study Approach.

In Proceedings of the 3rd International Workshop on Human Resource Information Systems, pages 69-83

DOI: 10.5220/0002176400690083

 SciTePress

hour long days, six days a week [31]. Professional labor costs are much lower in

India, almost 25% lower than that in the US (10). Global consultants McKinsey

identified that if a multinational bank of 1000 employees shifted to India, the bank

would save $18 million in labor costs [5]. The country has a well-defined private

sector, transparent financial system, and a respect for the law. [31, 7, 24]. Finally, the

time zone difference between the US and India provide customers with the attractive

business concept of receiving solutions around-the clock or 24/7 [5, 29].

The government’s proactive liberalization policy in 1991 opened the doors to

numerous multinationals. Today 125 Fortune 500 companies have their R &D centers

in India [18, 31]. Software companies such as Microsoft, IBM. & Hewlett-Packard

and other US multinationals are significantly increasing their operations in India [29,

23]. For instance, Dell is planning to double it work staff in India over the next three

years to almost hiring 20,000 technical workers. Microsoft is going to add another

3,000 jobs in India over the next three-four years [9]. Ford India is the exclusive

manufacturer of Ikon cars that are exported to Mexico, China, and several African

countries. GE Motors India has developed a noiseless motor for its washing machines

that are supplied worldwide from India. HP Labs India has innovatively created a

model hand-held scanning device, reducing the anxiety of reliance on scanner

machines [30].

US Multinationals in India are offering innovative perks such as concierge

services, on-site cafeterias, interest-free loans (for housing, automobile), educational

benefits, twelve weeks maternity leave, to attract the top talent [25, 3]. Multinationals

are including group term life insurance as a popular employee benefit, which provide

monetary assurance for unexpected death of employees. Intel offers hundred percent

medical benefits to its employees and 80% of the medical benefits to the family of the

employees [3].

The presence of US multinationals has prompted Indian organizations to introduce

several progressive HRM practices in India such as stock options, merit-based pay,

flexible work schedules, part-time work, temporary workers which were unheard to

the Indian corporate world [30, 24, 26, 28]. For example, TISCO (Tata Iron and Steel

Company), India’s oldest steel plant, with the help of external consultants, Mckinsey,

replaced age-old seniority-based promotions with PEP (performance ethic program)

to develop a new brand of employees with greater answerability and independence

[30]. Arvind Mills, a textile giant, introduced Selection Information System, an

innovative staffing practice allowing HR managers to offer a complete online

recruiting process, [30]. A study on three multinationals in India indicated that such

progressive HRM practices are reflected in superior firm performance [16].

This qualitative study is organized as follows: First, it discusses the resource-

based view, which is the main theoretical framework for this study. Second, it

identifies the methodology adopted for this research. Third, it details the best

practices in the results section as indicated by the respondents from the interviews.

Fourth, it integrates the results with the theoretical framework to strengthen provide

the discussion section. Finally, it addresses the contributions to the literature and

practice provides a model of best HRM practices and the HRIS component of the best

practices.

2 Theory: The Resource-based View

Scholars and practitioners have realized a revolutionary method of identifying a

firm’s sustainable competitive advantage. Organizations now look inward toward

their employees and identify human resource management practices to provide an

incontestable source of value and distinctiveness. Therefore an increased awareness

that employees and their human resource management practices (HRM) can provide

organizations with sustainable competitive advantage has been completely entrenched

in the strategic human resource management literature. The key terms that his seminal

study provided to the human resource and strategic literature are value, rare,

inimitability and non-substitutability [8, 19].

Scholars [8, 13, 16] have concluded with studies that an organization’s internal

resources can provide superior firm performance. In an empirical study of human

resource management practices in 80 foreign firms in India, superior human resources

practices (such as elaborate selection, employment branding, employees identifying

their own job content, and performance-based rewards system) provided

organizations with superior firm efficiency and competitive advantage. Specifically,

the study demonstrated that by providing such human resource management practices

made the employees idiosyncratic to the organization. Therefore competitors were not

able to easily duplicate such intangible human capital that was embedded in

distinctiveness [8].

[13] in an international study of 305 best companies in eight countries in Asia-

Pacific region found that “best companies” usually demonstrated three important

work practices- career planning, continuous learning and development, and an unique

work environment. Such work practices provided a complex organizational structure

for competitors to imitate and therefore these “best companies” were able to sustain

their competitive place. The RBV theory supports the concept of inimitability and

matchless competition that best companies are able to provide to their employees.

[16] in an empirical study of foreign and Indian firms with 300 managers

concluded that strategic HRM initiatives such as rigorous hiring, continuous training

and development, frequent performance management, and compensation practices

that provide flexibility and ownership result in providing sustainable competitive

advantage. Further, 68% of the managers from the foreign firms and 65 % from the

Indian firms endorsed that human resource management is a value-driven function,

providing firms with an indisputable advantage.

[1] in a study of HRIS (human resource information systems) on 111 Spanish

firms, identified firms that place a strategic importance on information systems for

human resource functions were superior to competitors that did not place such

strategic importance. HRIS can be defined as any IT (information technology) support

to manage human resource management functions. Such coordination between

information systems and human resource management functions provide a complex

social structure very difficult for competitors to duplicate.

A corporate example that elucidates this integration between HRIS and HRM is

that of Best Buy, a national US electronic retailer with its revolutionary flexible work

policy of ROWE (results-only work culture). This unique work practice allows

employees set their own work hours and are held accountable only for their work

results, and not by their physical presence in the organization The ROWE program

has demonstrated 35% work productivity increase and more than 50% decreased

employee turnover. Employers communicate with their employees through IT support

of laptops, blackberries, and cell phone- a work concept possible only because of

close integration between HR and IT [14].

3 Methodology

This qualitative study uses purposeful sampling with interviews as the primary data

collection method to analyzes each unique case followed by a cross-analysis [22]. The

use of multiple cases increases the reliability of the research and avoids the bias from

a single company case study. Several international HR scholars [20, 21] have used

this method successfully to get in-depth perceptions of global HR practices.

Qualitative studies allow interpretation of several interesting themes within specific

cases and across the cases from this study [21, 22].

[22] suggests that purposeful sampling of few organizations provide

organizational rich information even though the sample size might be small. The most

important kind of information in qualitative research is that the context of

understanding is as seen by the respondents actually experiencing the phenomenon in

question, therefore providing undeniable authenticity. Therefore [22] suggests that the

respondents’ answers’ are synonymous to quantitative data and the qualitative

researcher is comparable to the survey instrument.

This qualitative research examined the human resource management practices of

the three best companies as identified by Mercer global consulting company in 2008.

The goal of this ethnographic study was to understand the best human resource

management practices in selection, training, performance appraisal, and

compensation. Table I provides the description of these companies.

The informants for all the companies were senior human resource managers

responsible for human resource management practices in their company. The

interviews were conducted by phone in October and November 2008. Each interview,

conducted in English, lasted for about 60-90 minutes. Several steps were taken to

ensure that the researcher had accurate information of the interview. The open-ended

questions were sent to the participants ahead of time so that respondents could reflect

and provide accurate interpretation to the interview questions.

Semi-structured interviews were conducted as such interviews allow

interpretations of research topic in respondents’ own words, without providing any

Table 1. Demographic profile of Indian organizations.

Organization Full-time

employees

Domestic

Branches

Full-time HR

employees

Industry Education of HR

Director

Company A

4162 4 45 Information

Technology

Masters in Business

Administration

Company B

300 14 21 Pharmaceutical

Industry

Masters in Business

Administration

Company C

44,000 NA NA Information

Technology

response bias [20]. For instance, research questions that were addressed were “what

are your three successful selection practices and please explain why they are

successful.”

Every effort was made to capture the informant’s point of view on staffing

practices by taping the conversation and also taking notes diligently during the

interview process. The tape recorded interview was transcribed for complete clarity of

the interview. The tape recorded conversations were heard several times to get the

main themes of the interviews. Finally, a summary of the interviews were sent to the

informants to ascertain accuracy. Subsequent email interactions with respondents

were maintained to for clarification and comprehension of interview material [22].

4 Results

This section provides a description of human resource management practices as

identified by the respondents from their interviews. The four main research questions

are:

Research Question 1: Identify three successful staffing practices and please

explain why they are successful?

Research Question 2: Identify three successful training practices and please

explain why they are successful?

Research Question 3: Identify three successful performance appraisal practices

and please explain why they are successful?

Research Question 4: Identify three outstanding benefits that you provide and

please explain why they are successful?

4.1 Case 1: Company A: Information Technology

This company in the information technology industry has about 4000 employees with

its as main offices in India and in the US.

Recruitment and Selection. The three most successful recruitment and selection

practices are elaborate interviews, employee referral programs, and internal

recruitment.

Elaborate Interviews: Qualified applicants have two technical interviews and a final

management interview with senior HR managers. The technical interviews are usually

done by a panel of technical experts, who are superior to the level that is being hired.

At the final interview, the senior management identifies the attitude and the culture

congruency of applicants with that of the company’s. The technical managers receive

special training to conduct hiring interviews. Regular coaching sessions for

conducting effective interviews are arranged for hiring managers. The company

emphasizes role-based hiring: therefore for each role, a defined competency is

identified which includes the acronym of CLASS (Caring, Learning, Achieving,

Sharing and Social). Hired applicants should demonstrate technical, functional and

organizational skills based on the competency model. In the respondent’s words, the

whole process of recruitment is seen as:

“Recruit for attitude, train for skill, and develop for leadership. Our process is to

recruit people and not profiles; recruit for a career and not for a job.”

Employee Referral Programs: Thirty percent of the employees are hired through

this successful staffing method. The monetary rewards Indian employees receive are

Rs 10,000, while US employees receive $1000 for referring qualified candidates. A

specific dimension of this referral program is to also reward families of the

applicants’ who have been selected as the company recognizes that without the help

of their families applicants cannot contribute long hours of work. So families of

applicants’ are recognized with several monetary incentives such as dinner and store-

coupons.

Internal Recruitment: Senior executives are hired predominantly through this

method as they are rotated through different functional levels. The organization also

feels a strong sense of commitment to their internal pool and provides vacant postings

to their internal employees first. Internal vacancies are posted via an intranet so that

internal employees might be first aware of career opportunities within the

organization.

Training and Development. Learning and remaining current in technical knowledge

is an important aspect of the IT Industry. The training department, which is known as

Culture and Competence, is responsible for all the learning initiatives. The company

conducts about ninety-one percent of their learning initiatives internally, with their

own employees, and only nine percent of the training initiatives are outsourced. In

the respondent’s words:

“The company focuses on building the capacity to learn and an emphasis on

increased interaction from participants as opposed to being instructor-led and

theoretical.”

The main training initiatives identified as successful are leading performance

workshops, professional workshop, and learning communities.

Leading Performance Workshops: This workshop is designed to train middle and

senior-level leaders who are managing teams, motivating talent, and transitioning

high performers to leadership roles. This workshop content includes visioning,

building teams, performance management, resource management, customer

management, appreciating conflicts, and adversity management. These workshops are

conducted by senior successful leaders, providing a very hands-on approach to the

training process.

Professional Workshop: This workshop aims at building self-management skills for

employees who move to upper-level positions. Such positions require employees to

manage teams and interact with high-profile customers. This workshop content

focuses on understanding the big picture, identifying the traits of a successful

professional, and learning workplace etiquette.

Learning Communities: In a knowledge industry, it is critical that employees

constantly build and learn new skills to be differentiators in the competitive market

place. Therefore the organization has provided adequate opportunities for employees

to continuously enhance their skills and competencies by forming learning

communities. Such groups are self-organized and members share their valuable work

experience and learning. There are about thirty learning communities in the

organization that participate in specific computer learning domains. In addition, the

company has launched a global online learning system, focused on collaborative

learning among its global employees.

Performance Management. The performance process follows consists of setting

objectives, a mid-year review, and a final evaluation. The performance process is

elaborate and developmental in its method of operation. In the respondent’s words,

the process is very successful because:

“The process aligns the individual objectives to the organizational objectives.”

The main performance management initiatives identified as successful are

performance assessment, behavioral assessment, and 360 degree-feedback.

Performance Assessment: The performance assessment is set against different

objectives at the beginning of the year. The various types of objectives include the

role-based objectives (what project work employee is doing), organizational

objectives (how does it contribute to the organizational goals), personal objectives

(how has the employee’s performance improved over previous year’s objectives) and

out-of-the-box objectives (innovative and creative way of doing things).

Behavioral Assessment: The behavioral attributes are driven by the CLASS acronym

(Caring, Learning, Achieving, Sharing and Social) competency model. As part of

their annual performance appraisal, employees have to provide a self-appraisal. This

self-assessment carries a significant weight in the overall performance appraisal.

360 Degree-Feedback: This method solicits feedback from the supervisor, peers, and

subordinates. It provides an undeniable comprehensive feedback to employees from

different perspectives. The feedback is anonymous and the scores are aggregated and

presented to the individual. This is mandatory for management cadres (mid-

management) and optional for junior-level of management.

Compensation & Benefits Practices. Several pay practices ensure a workplace that

is committed and caring to its employees. The predominant benefits are work-life

balance practices, employee stock ownership options, and on-site facilities for new

mothers.

Work-life Balance Practices: Employees are encouraged to take vacations as a part

of the company’s philosophy to maintain a strong work-life balance. This is facilitated

by providing variety of opportunities such as the federally mandated vacations and

also encouraging employees to take annual sabbaticals. Female employees have the

option of taking up to 12 months loss-of- pay to care for a family member or to

accompany their spouses on overseas trips. Female employees can also choose

reduced hours of employment to balance work and life.

ESOPS (Employee Stock Ownership Options): The company provides ESOPS to

all their employees-this benefit is not restricted to any specific levels but applied

universally. ESOPS increases accountability, provide a sense of belonging and most

important gives employee a sense of ownership in the company.

Day-care Centers for New Mothers: New mothers often face the hard conflict of

leaving their newborns at home when they return to work after three months. To help

new mothers transition, the company has an innovative work facility which allows

new mothers to bring their infants to work. Trained professionals watch over these

infants, while the mothers focus on work and also get to see their infants throughout

the day. Women receive 90 days of paid leave for maternity and new mothers can

take 365 days with loss-of- pay to care for their child. Further, women are guaranteed

of their jobs when they return from maternity leave.

4.2 Case 2: Company B: Pharmaceutical Industry

This company has about 300 employees and is has main operational units in the US

and UK, with their biggest manufacturing unit in Russia.

Recruitment and Selection. The three most successful recruitment and selection

practices are employee referral programs, internal recruitment and global internships.

Employee Referrals: This method of recruitment known as Parichay (Indian word

means “introduction’) allows employees to refer their friends or family who are

qualified for the job.

Such referrals have monetary rewards to the employee who refers qualified

applicants. This has also proven more cost-effective. Also, as the jobs in the

pharmaceutical industry are quite difficult to articulate to external recruiting vendors

(such as placement consultants) because of their high job technicality. Therefore, such

recruitment methods of having current employees explain the fundamental job details

to potential applicants, such as friends and family has proven to be very effective.

Internal Recruitment: After completing two years in the organization, current

employees can apply to any of the different jobs advertized through the internal job

portal. An interesting point to note is that employees do not need to tell their line

managers as the whole internal recruitment process is confidential till the employees

get the job. Once the applicant gets another internal job, he/she has about 1-3 months

to give notice to their boss. Any vacant jobs are first internally advertized and then

open to the external labor market demonstrating a very strong commitment to their

internal labor pool.

Global Internships Program: This recruitment method identifies high-performing

applicants globally from universities for both management and technical applicants

through elaborate selection process such as interviews, group exercises, technical and

cognitive tests (analytical tests) and presentations. Finally, they are given a pre-

placement offer (PPO) and applicants can identify if there is a fit between their

personal values and those of the organization’s- therefore in this process applicants

self-select themselves.

Training and Development. The main in-house training initiatives identified as

successful are know your basic training initiatives, back-to basics training initiatives

and long-term education:

Know-Your- Basics (KYB): This training initiative trains employees to understand

their business unit holistically- therefore from different perspectives- internal,

customer, and leadership perspectives. For example, an organizational recruiter

should understand how recruiting impacts their business unit and organization.

Back-to-basics (B to B): This is a certification program that empowers employees to

be thorough in the basic essentials of their job. For instance, an employee in

production should be cognizant of total-quality management practices in

manufacturing. This organization is unique in providing certifications to different

functional departments.

Long Term Education: The organization focuses on providing continuing education

for all its employees to improve competency development, employee engagement,

and professional. Several leading Indian universities conduct advanced classes at the

organization, which is extremely beneficial to the employees, providing a platform of

continuous learning.

Performance Management. The main performance management initiatives

identified is the use of PERFECT (Performance enhancement coaching tool) appraisal

management system. The goal setting for employees are obtained from the balance

scorecard for each business unit.

PERFECT: In this approach the organization uses a face-to-face dialogue approach

for its performance appraisal as this provides a rich opportunity to have an actual

dialogue about employees’ performance. Therefore both the managers and employees

can discuss any performance shortcoming and also highlight areas for development

and coaching. In this system, employees also have the right to disagree with the

performance rating providing reasons for doing so. The organization is of the opinion

that online appraisals focus on performance documentation instead of discussion and

dialogue, which is critical for identifying the actual reasons for employee

performance.

Compensation & Benefits Practices. The predominant benefits are performance

bonus, stock options and opportunities to interact with top management.

Performance Bonus: This organization was a pioneer in providing variable pay in

the Indian pharmaceutical industry. The two main forms of variable pay are

performance bonus (an employee gets this bonus if his/her individual target is

achieved and as well as their target of the business unit is achieved) and profit sharing

(an employee gets this bonus if the company target and individual target are

achieved).

Stock options: This is provided not only to senior-management but also to middle -

management – these stock options are contingent on employee performance.

Coffee with the CEO (chief executive officer): The organization offers professional

networking with the different business unit leaders to discuss important issues such as

mentoring, coaching and leadership. This is open to employees at all levels, therefore

providing a rich platform of discussion for internal career growth.

4.3 Case 3: Company C: Information Technology

This company has about 44,000 employees and is has main operational units are in

the US and UK.

Recruitment and Selection. The three most successful recruitment and selection

practices are employee referral programs, external recruiters and e-recruitment.

Employee Referrals: The organization recruits 30-35% of their employees through

employee referral program. The recruitment teams work closely with current

employees to get such referral details coordinating employee vacancies,

advertisements ensure qualified applicants are recruited. Employee referrals receive

monetary rewards.

External Recruiters: The organization hires 15% of their offshore resource needs

and around 25% of domestic requirements through qualified recruiters. The external

recruiters are evaluated on their performance on an on-going basis of every quarter,

based on applicant quality, retention, and employee job performance.

e-Recruitment: The organization uses established domestic and international job

portals (such as Naukri, Monster, Jobs Ahead, Dice, Job Street). On an average 20-

25% of the new hires are done through e-recruitment. The company has agreements

with these e-recruitment vendors whereby their technical representatives are in

constant communication with the organizational recruiters to understand the features

of the portal and also ensure good quality applicant profiles.

Training and Development. The main training initiatives identified as successful are

leaders as teachers, real-time training initiatives and Planet Satyam.

Leaders as Teachers: The organization provides consistent leadership training to

potential leaders. Successful leaders offer learning and development opportunities to

emerging leaders with hands-on experience. Potential leaders are expected to role-

play business scenarios and identify business decisions. In 2007-2008, Leaders as

Teachers contributed 82,400 hours across 12,154 teaching and mentoring learning

opportunities spread over 60 locations around the world.

Real-Time Learning (RTL): This training and development initiative enhances

productivity without taking employees away from the workplace. This is designed to

specifically improve the quality of interaction between customers and employees.

RTL involves direct observation, timely feedback, experiential learning and coaching

as it actually happens in the workplace. Performance consultants are assigned to work

teams and during any onsite customer visit, the consultants observe employee’s

performance with the customers directly. Finally, these consultants provide unbiased

feedback that identifies any training, developmental or coaching issues.

Planet Satyam: Employees world-wide now have access to an entire range of

educational programs at the click of a mouse. This is a novel web -radio/ TV channel

that creates a highly interactive learning platform of thousands of online courses,

webinars, wikis, blogs across several domains such as technical, behavioral, and

management education for employee enrichment.

Performance Management. The main performance management initiatives

identified are accelerated career tracks for top performers; mandatory job rotations

and forced attrition.

Career Tracks for Top Performers: High performing employees are identified for a

fast career growth in the organization. This is very rewarding for employees who

want to immediate results for their superior performance.

Mandatory Job Rotations: Employees are rotated through different functions so that

they can have a well-rounded organizational functional expertise. This is mandatory

for all employees so that can get a good business exposure in different functions.

Forced Attrition: Employees who perform at the bottom 10% of their annual

performance goals are asked to leave the organization. The organization places a

strong emphasis on superior performance and therefore will not tolerate under-

performers.

Compensation & Benefits Practices. The predominant benefits are flexible benefit

plans, expatriation & repatriation benefits and health and life insurance benefits.

Flexible Benefit Plans: This includes several components such as transport

allowance, leave Travel allowance, medical reimbursement and company car.

Employees have the flexibility to pick and choose any benefit from this flexible plan

that they would need. This provides lot of flexibility as employees’ needs for benefits

are usually quite diverse.

Expatriation & Repatriation Benefits: Usually approximately. 10% of employees

are on overseas assignments. Therefore some benefits offered to overseas employees

are relocation benefits, 14 Days of initial travel expenses and commuting allowance in

the host country, travel expenses for the family, housing and car assistance in specific

countries.

Health & Life Insurance Benefits: Employees are covered under comprehensive

Health & Life Insurance Benefit plans which are competitive and are in line with the

statutory & regulatory requirements of the various countries where the company

operates. For e.g. in India, 100% of the premium contribution is made by the

company to cover the employee and his/her family under the India Health Insurance

Plan.

5 Discussion

[13] on a study of Asian companies found that “best companies” had a very strong

focus on their employees and therefore their management practices were a very high

organizational priority. They also observed that these best companies demonstrated

high performing work cultures, continuous learning, and a strong sense of employee

engagement. Organizations that consider their employees as their most important

capital and therefore human resource management practices a very strategic

organizational concern are able to maintain that edge over their competitors.

The RBV endorses the view that employees and their management practices can

provide unmatched competitive advantages. There are several examples of

“inimitable” HRM practices in the US corporate. The Internet king Google, has a

work policy of allowing employees to decide their own work time with a 70-20-10

policy (work project, personal development and creativity), so well-known in the

American corporate, but very difficult to imitate [11]. The ROWE (results only work

environment) flexible work policy of US electronic retailer, Best Buy, has

revolutionized the work concept of not having to be physically present at work by

providing employees absolute work flexibility [14]. In the hospitality industry, Ritz’

Carlton’s daily employee-line ups, elaborate talent-hiring process, and $2000 frontline

empowerment culture is applauded in the hospitality industry, albeit very difficult to

duplicate. Booz Allen, a US management consulting firm, recognized as the best in

training and development, offers $5000 in tuition reimbursement (graduate education

and professional development) annually to its employees- and considers employee

development as a shared task between the employer and employee [17]. Table 2

identifies the various “best” HRM practices provided by these three Indian

organizations.

Staffing practices such as employee referrals and internal recruitment provide a

very idiosyncratic network of employees that are unique to that organization. Such

applicants usually have realistic job expectations, are grounded in the organizational

culture and values, and therefore are able to perform very well in new positions

almost immediately [19]. Further, [6] argues that developing and identifying

employees within the context of the organizations can definitely be an

“inimitable”source of competitive advantage. Such employees also develop a deep

sense of loyalty and rich internal network.

Table 2. Model of Successful HRM practices.

HR Practices

Staffing Training Performance

Management

Compensation HRIS

Internal

Recruitment

Employee

Referrals

Elaborate

Interviews

Global

Internship

programs

E-recruitment

External

Recruiters

In-house training

programs

Learning

Communities

Educational

Assistance

Role-based

objectives

360 degrees

feedback

Developmental

Appraisals

Forced Attrition

Stock Options

Day-care centers

Flexible benefit

plans

Internal job

postings

E-recruitment

Learning

Communities

Planet Satyam

(world-wide

learning via

web/TV/radio)

The paramount advantage of global recruiting (such as e-recruitment and global

internships) is the ability to identify the most qualified applicant world-wide.

Therefore, for knowledge-based industries, such as IT (information technology), such

recruitment options is an undeniable staffing advantage to hire the best global talent.

Hiring qualified applicants definitely adds value and provides distinct competitive

edge to organizations [27].

The three companies provided intense in-house training and learning opportunities

to their employees- both technical and management. Scholars suggest that in-house

training programs that are tailored to specific organizational needs provide a very rich

collaborative learning environment. Employees learn hands-on from their leaders and

also have regular opportunities to develop both their technical and management skills.

Such intense training and development definitely adds positive value for the firm

augmenting several positive HR outcomes [8, 16].

A case in point-Booz Allen Hamilton, US consulting firm, recognized globally as

the number one organization for training and development, spends 6.3 % of its payroll

on training and development. The organization provides almost 800 learning courses

and provides several in-house leadership development training initiatives. The

organization boasts of several positive HR outcomes such as increased retention,

reduced turnover, being the employer of choice, and an annual savings of almost $18

million dollars [17].

Performance management that is frequent and developmental allows employees to

achieve superior results for organizations [16]. These three organizations had an

emphasis on frequent and comprehensive feedback, learning collaboratively from one

another, and providing career guidance. [12] suggest that providing employees with

positive solutions to their performance evaluations and frequently discussing

performance is the best way employees will overcome negative connotations

associated with this annual process.

On the other hand, the forced attrition method (identified as a performance method

by one of the three companies) might seem a radical approach in performance

management. Forced attrition is a performance method where the lowest 10 % of the

employees in performance appraisals are asked to leave the organization. This method

is still adopted by some very high profile US and UK companies. Microsoft and GE

use forced attrition performance method regularly in dismissing the lower 10 % or

under-performers of the organizations. Their justification is that this performance

method would motivate employees to constantly to provide their best to

organizations, resulting in superior firm performance. In a global survey of UK

managers, 77 % of the 562 managers surveyed indicated they would prefer a forced

attrition method of performance appraisal [2].

Compensation and benefits that are unique, provide flexibility, and ownership

offer organizations with immense value in terms of becoming an employer of choice,

having reduced turnover and increasing employee retention. The three organizations

interviewed provided unique benefits, flexibility in choice of benefits and also a sense

of ownership in their compensation practices [16].

Organizations that offer unique benefits and care for their employees are able to

maintain their competitive edge in the industry relentlessly. A case in point- the

Internet giant, Google, the number one Fortune 100 company for several years,

provides benefits that are unmatched in American corporate, such as offering free

food in their 15 ethnic restaurants, on-site child-care center, $5000 for adoption

expenses, free movie nights, and paid 12 weeks maternity leave for their employees or

Googlers [11, 15].

Finally, this research paper identifies how HRIS provides a strategic advantage for

these companies. The integration of technology for identifying internal and external

potential candidates through e-portals allows the organization to provide an

idiosyncratic network of internal employees and also get the best qualified candidate

externally, thereby adding value to the firm. Consistent and continuous learning is

made possible by these “best” companies by technology support which provides for

global learning communities. A strong focus on organizational learning has shown to

definitely contribute to sustainable competitive advantage [1, 16].

6 Conclusions

This study provides three significant contributions to the literature. First, it showcases

the current best human resource management practices in organizations identified as

high-performing in a very successful economy. This study focuses on an economy

that is moving forward in leaps and bounds [18, 7]. [18] emphasizes that India and

China are the most successful emerging economies with India becoming the world’s

“back-office” and China becoming the “factory of the world.” Multinationals should

increase their awareness of cultural practices in these upcoming economies and

identify proactive human resource strategies. Multinationals are establishing to India

at an increasing pace with about 15,000 joint-ventures in India today [4].

Second, this study provides a model of best practices for both domestic and global

companies to adapt in their business units. As India and China race to become the

high economic world powers, multinationals should be cognizant of successful

practices in these upcoming economies. Multinationals that “glocalize”- absorb the

best from different cultures- are most likely to succeed in this amazingly flat world

[7].

Finally, this study integrates and provides what HRIS practices are successful so

organizations can be mindful how successful organizations have integrated their

technology support to advance the performance of human resource management

functions. The HRIS functions that are provided are detailed in Table 2.

Organizations that use their HRIS to support their HRM efficiently provide an

indisputable edge, as suggested by the non-traditional work approach of Best Buy in

the United States [1, 14].

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