HRM IN THE SOUTH ASIAN CONTEXT: A
COMPARISON OF HRM IN INDIA, PAKISTAN, AND SRI LANKA
Zia Ullah,
Assistant Professor, University of Central Punjab, Lahore. Email: dr.ziaullah@ucp.edu.pk
Muhammad Zeb Khan, Assistant Professor, Sarhad University of Science
& IT, Peshawar. Email: zebkhan.ba@suit.edu.pk
Abstract. A recurring
question in contemporary organizations is how to deal with HRM (human resource
management) in the wake of globalization and an emerging knowledge economy. Many research studies have been
conducted to examine the extent to which HRM practices converge and diverge in
different socio-cultural contexts. National institutions and local
cultures are cited as the major stumbling blocks for HRM convergence. However, it is also true that
regional clusters have many things in common (cultural similarity, level of
economic development, and geographical proximity etc.) make conditions that ultimately lead to isomorphism in HRM. The
study in question attempts to look
at the extent of convergence and divergence of HRM in India, Pakistan, and Sri Lanka that constitute one cluster. The
study specifically examines various HRM practices including training,
compensation, and employees’ safety in the light of recommendations of International Labor Organization (ILO). The goal of
this study is to develop a model of HRM which best describes the
situation in the three countries for guiding
effective employment, deployment, and development of human resources.
Key Words: HRM, culture, convergence,
divergence, globalization
Introduction
Though the field of
human resource management (HRM) is in transition by breaking away from it
micro-focused role towards a macro strategic paradigm (Khatri,
Budhwar 2002), it is still in its infancy in developing countries
despite its strategic importance for organizations. The current research on HRM suggest that it is moving away from its
traditional role of managing routine employment activities to assuming a
strategic role in formulating organization’s strategies
(Budhwar 2001). The enlarged role of HRM is
due to the fact that there is a positive correlation between HRM and organizational
performance (Schuler, Jackson 2008) in the midst of tough competition as a result of ICT
(Information and Communication Technology)
revolution. The ICT revolution coupled with fading away of trade barriers have led to increase in global
trade which, among other things, requires a different approach to HRM (Bondarouk, Ruël 2008). Looking at HRM from a global
perspective is the domain of IHRM (International Human Resource Management)
where research is driven by certain assumptions.
The first assumption is that the process of globalization will ultimately bring
in uniformity in HRM by integrating economies, markets, and workforce (Ferner
1994). Multinational
Corporations (MNEs) are the principal players in internationalization of the
world. Local organizations, out of necessity or isomorphism, tend to adopt the
HRM practices of MNEs. Contrary to the convergence thesis, there is ample
evidence that contextual factors such the level of economic development, institutional arrangement, and culture selectively
allow (filtering) HRM practices to diffuse (Dowling, Schuler, Welch 1999; Tayeb 2005). According to Budhwar, Chand, and Katou (2007) and Soomro, Gilal, and
Jatoi (2011), HRM practices (training, selection, career planning,
employee participation, job definition, compensation, performance appraisal)
were found correlated positively with the employee performance in South Asian
region. Hafeez, McEvoy, Keoy, and McPherson (2008) has found that there is a large number of small firms
that do not institute formal HR practices in large organizations in the
region. However, according to Dessler
and Tan (2006), respect for continuity in the Asian region is not a
barrier to adopting modern HRM systems, rationalization and efficiency, and
recognizing individual achievement for young managers.
There are eight
countries (Afghanistan, Bangladesh, Bhutan, India,
Maldives, Nepal, Pakistan, and Sri Lanka) in the South Asia region. The region, though rich in natural resources,
has yet to achieve the desired socio-economic development with its impact on
the quality of HRM in organizations which is still in its embryonic stage (Khilji
2004). Indian managerial practices had a great impact of British corporate
system for almost two hundred years (Khan,
Miah, Manzoor 2014). Because of shared history and level of economic
development, this paper attempts to understand the dynamics of HRM in three
South Asian countries (India, Pakistan, and Sri Lanka) and
develop a model which depicts the
convergence/divergence phenomenon.
While developing the model, the study focuses on whether or not HRM is cultural-free
in this region. The study examines the impact of national culture on HRM using Hofstede’s cultural model and ILO’s policies
and standards as frameworks.
Analytical
Framework
Regional culture has
had a significant impact on the way people manage organizations and the way
employees make sense of their working environment (Abdullah,
Boyle, Joham 2010). More significantly culture has an important bearing
on interpersonal relations and organizational trust (Vanhala,
Ahteela 2011). To understand the extent of convergence and
divergence of HRM in the three South Asian countries (India, Pakistan, and Sri
Lanka), this study uses the Hofstede’s cultural dimensions as analytical framework. National culture is supposedly the
most prominent, if not dominant, contextual factor which affect HR practices (Khilji 2003). Culture is the set of beliefs,
values, and artifacts that create shared understanding among social actors (Schein 2010). According to Horton and Hunt (1972), culture consists of socially
learned norms, values,
and behavior shared by human group. The organizations, as social actors, must interact with individuals and groups in culturally
acceptable ways to gain legitimacy and survival. In this study, Hofstede’s (1980) four dimensions of culture (power distance, uncertainty
avoidance, masculinity versus femininity, and individualism versus collectivism) have been taken as theoretical lens
for studying HRM in the three selected countries.
According to Tayeb (2005), in every culture there will always be power
asymmetry due to differences in wealth,
education, and social status. Orwell (1946) was of the view that all animal are equal but some are more equal
than others. In high inequality cultures, people in general are afraid of those
in power and they cannot express their disagreement openly. Under such
circumstances, management style happens to be authoritarian and highly
centralized. Uncertainty avoidance is the degree of interest in participating in decision making and risk taking.
According to Hofstede (1980), in uncertainty avoidance
cultures, people tend to avoid ambiguity and take personal risk for making
decisions. Organizations operating in such cultures would expect employees to
be more
comfortable with clear
directions/instructions from senior managers about performance
standards (Tayeb
1988) and the organization structure will happen to be highly
bureaucratic. The concept of individualism/collectivism is not straightforward.
According to Hofstede (1980) individualism means selfishness and freedom whereas collectivism is
about a preference for tradition and collective interests. The relationship between
an organization and its employees could be placed on the individualism/ collectivism continuum (Hirst, Macfarlane 1979). In individualistic culture,
the relationship is contractual in nature
and does not spill over to private spheres (Triandis
1995). Masculinity/femininity, according to Hofstede (1980), has to do with the gender role in society. In a
masculine society, the role of male and female are strictly determined by
society. It becomes rather difficult or unacceptable to change roles. According
to Hofstede, (1980) there is a positive correlation between a country’s
femininity score and the participation of
women in higher level professional and technical jobs.
Standards of
International Labor Organization
In 2001, the governing
body of ILO advanced some labor standards
that all signatory countries are obliged to implement. They are related to training, compensation, safety and health, and
hiring.
Training
·
Governments are required to develop policies for
vocational training and guidance which could facilitate employment at the
national level taking all the concerned parties on board. For multinational enterprises ILO provides the framework to
facilitate them to pursue their training policies.
·
Multinational enterprises are required to provide
necessary trainings to their respective employees at all levels to enable them
to effectively and efficiently dispense away their duties in the pursuance of
organizational goals. These trainings should be in concord with the development
policies of the host country. The trainings, in this regard, should develop generally useful skills and promote
career opportunities and to enable the workforce to compete at local, national
and international levels.
·
MNEs working in developing countries are required
to follow Convention
(No. 142) and Recommendation (No. 150) for Vocational Guidance and Training in the Development of HR
and collaborate with the national firms/organizations. The host governments,
side by side, should encourage both the MNEs and the local enterprises for
devising programs aimed at skill formation and development.
·
As MNEs have first hand experiences in efficient
operation, they, with
the cooperation of the national governments, should provide conducive organizational
environment to the local management within their respective enterprises to broaden and enrich
the experiences of the local management in relevant fields.
Compensation
·
MNEs should not offer less favourable
organizational environment which includes wages, benefits, and facilities to
the locals compared to the ones offered by comparable employers in the country
concerned.
·
MNEs working in developing countries, in
non-competitive employer circumstances, should not resort to employees’
exploitation in terms of low wages,
limited and restricted organizational benefits. Rather they should honour the
national labour and wages policies. No doubt
the MNEs have the right to look at their respective economic positions,
however, such considerations may not compromise on the level of the
satisfaction of basic workers’ needs and the survival of
their respective families.
·
In dealing with the MNEs, national Governments in
developing countries, should undertaking basic precautionary measures whereby
the operations of these MCNs also benefit the less developed areas and lower
income groups as much as possible.
Safety and
Health
·
National government should take upon the
responsibility of making both national and multinational enterprises to comply
with adequate safety and health standards for their respective employees during
their operation. Governments should ratify labour related conventions like
Ionizing Radiation (No. 115), Conventions on Guarding of Machinery (No. 119),
Benzene (No. 136) and Occupational Cancer (No. 139). Governments should employ
all efforts to honour all the principles embodied in these Conventions.
·
MNEs, in
conformity with the local and national culture and environment, should promote
and maintain highly desirable safety and health standards by employing their
relevant experience so as to ensure the protection of the environment from
hazards. They should disseminate and share such standards (that they operate in
developed countries) to all the stakeholders, within the countries where they
operate, including the representatives of the workers in the enterprise, which
they observe in other countries. And, particularly, in case of introduction of
new products or services, they should make known to those concerned any concern
or any special hazards and related protective measures associated with them.
·
MNEs should extend cooperation to any international organization that
is working for preparation, developing and adoption of universal health and
safety standards.
·
Besides compliance with the international safety
and health standards, if needed, MNEs in conformity with the national practices, should cooperate fully
at national and local level with the relevant authorities, the organizations
and their representatives to formulate and establish national and local safety
and health organizations. They should assess the need if such standards
relating to health and safety should be made integral part of employment
agreement.
Comparative
Cultural Analysis
This portion of the
article carries the analysis of national cultures of the countries in question.
Cultural dimensions developed by Hofstede (1980) have specifically been used as criteria to evaluate respective cultures of the countries under
study.
Human Resource
Management in India
Keeping
the diverse and complex multicultural society consisting of numerous languages,
traditions and religions in mind researchers (e.g.,
Tayeb 2005) are of the opinion that in a country where there is
hardly a uniform national cultural, a uniform HRM is beyond rational thinking. However,
contrary to them, there are many researchers (e.g. Mathur,
Aycan, Kanungo 1996;
Sharma 1984; Sinha
1990) do agree with the contention in spite of the exiting diversities in
the national culture there are a number of characteristics that are shared by
majority of Indians. They include: arranged marriages, expression of emotions,
fatalism, friendliness and hospitality. Indian culture is a good example of
collectivism. Some of the critical features of this collectivism is fear of
people in power, large families with more dependents, obedience to superiors, submissive,
friendly, informal, modest, unreserved, collectivist, undisciplined,
caste-conscious and clan-oriented and law-abiding (Budhwar 2001). According to Hofstede (1980) people with low individualism
give preferences to family and group
attainments over their personal work outcomes. Tayeb (2005) demonstrates similar views and conceptualizes her findings regarding Indian
culture as collectivism; clannish, community conscious,
large in-group includes extended family, clan, and friends, but she surprisingly highlights the employee-workplace
relationship as contractual, in-group does not include the workplace,
low level of commitment to organizational interest and objectives. These are
the indicators of individualism. Anyhow such behaviors could be attributed to low responsiveness of management in
term of rewards and could be expected
in collectivistic culture as well.
While analyzing
management style in India, researchers (e.g., Kanungo,
Mendonca 1994; Singh
1990) are of the opinion that this style is characterized
by traditionalism or unwillingness towards easily opting for change, lack of
initiative in problem solving, hesitation in taking drastic and quick decisions
in work-related matters and an indifference to job feedback. However, Hofstede (1993), by contrast,
found that Indian has a moderate uncertainty avoidance culture. In
contrast most of the studies in this regard and hierarchical nature of
organizations support high uncertainty avoidance attitude of employees.
Cast system which is
characterized by inequality and hierarchies is deeply rooted in Indian culture.
On the basis of this national culture organizational culture has been greatly
influenced by it. In other words organizations are hierarchical and people
employed in these organizations have majorly been found status conscious (Budhwar 2001). India’s positioning in Hofstede (1993) research as a
high power distance culture that reflects the hierarchal nature of
Hinduism, the early socialization process that highlights the importance of the
family structure and remnants of British colonial
influence. Tayeb’s (2005) study also
reflects similar findings.
Another aspect of
Indian culture, from Hofstede’s (1980) cultural dimensions is its low masculinity. This can
be observed in the form of paternalistic
management style wherein personalized relationships are preferred over a more
divorced performance orientation (Jaeger, Kanungo 1990). This generates a tender-mindedness and soft work culture that is
associated with a reluctance to take bold
decisions and see them through to the end (Sinha 1990).
Pakistan
The major ingredients of Pakistani culture, as
described by Khilji (1995), are religion, Indian origins, British legacies, and
American influences. More than 96 percent of the population is Muslim
(Government of Pakistan, 2006), but it has been localized due to the
overshadowing impacts of other influences (Latifi
1997). Despite staunch belief of the people of Pakistan in
Islam, it appears to be of least significance on organizational activities in
general and HR policies and practices in particular. Collectivism, risk
aversion, multi-layer organi-zational structures are generally prevailing in
Pakistani society. Pakistani managers want
to follow American management style (Zakaria, 1994). Hofstede (1980, 1993) characterizes corporate culture
in Pakistan as collectivist, associative
and having high uncertainty avoidance
and a high power distance. Employees,
in general, unquestioningly respect authority, people are integrated as cohesive
groups and they are emotional. On masculinity index Pakistanis are found exactly half way i.e. possessing both masculine
and feminine qualities (Hofstede 1993). However, Khilji’s (1999) research suggests that the inclination is definitely
towards masculine qualities.
Organizations
are formally and hierarchically structured. Consequently HR policies and
practices are highly centralized. Employees have hardly any say in decision
making process and have no direct access to the HR departments. Employees enjoy
low autonomy thereby negativel affecting their innovative capabilities. HR
policies and practices are formulated in almost isolation; employees’ feedback
during the formative phase of policies is rarely sought (Khilji 2004). All these organizational
aspects weaken employees’ trust level (Jamal 1998). In other words, Pakistani
employees are detached from their work organization and have individualistic
relationship to their workplace (Khilji 1999). There is a clear cut
distinction between in-group and out-group members (Triandis 1995) and organizations in Pakistan
are seen as out-group while families, and at times co-workers or managers form
in-group. When there is conflict between the two, the latter is preferred over
the former.
Sri Lanka
It
is hard to completely separate Sri Lankan culture from Indian Subcontinent
culture as the country’s people have a long shared history with the Indian Subcontinent people. The geographical location and the
proximity of this country to the mainland exposed it to many different cultural influences. Despite all these objective realities,
the country insularity as an island meant that its people subjectively
modified those influences to create distinct traditions with it own flavor and
identities (Abeysekera
2007).
As
a whole, the country culture exhibits a
number of Asian traits. They include similarities in family relationships and
other common social interactions. However, business management style of Sri
Lankan people has somewhat mix flavor of Asian
traits with Western management philosophies. For example, Nanayakkara (1993) notes that many Sri Lankan managers maintain power
distance of Asian trait with an individualistic cultural traits of West. They,
however, tend to exhibit collective traits in family and other social
interactions. It has also been observed that
Sri Lankan management practices evolved from the British system prior to its
political independence and has adopted mostly similar Western management practices since independence (Nanayakkara
1993). Overall,
employees prefer to have planned HRM
system that follows formal procedures.
In Sri Lanka femininity
is not regarded as an honorable symbol (Jayawardena
Seneviratne 2003). It inextricably intertwined the dominant discourses
on woman in the feudalistic society (e.g., Thiruchandran 1997). Predominant texts in feudalist society such as Jatakas have
had an explicit deployment to create and
promote masculinity as the predominant centre in the feudal society and to
paint femininity as a symbol of dishonorable.
Selected HR
Practices |
India |
Pakistan |
Sri Lanka |
Training |
·
Govt. has set up institutes for vocational
training ·
MNEs mostly
provide in-house training ·
Meets ILO standards |
·
Govt. has set up VTIs and TTBs to impart vocational training ·
Industry provides training through SDCs. ·
MNEs provide training in line with ILO requirements |
·
MNEs generally provide on-the-job training to
their employees ·
Govt. too provides basic skills training in
various occupations as per the demands of both public and private sectors |
Compensation |
·
Wages and other working conditions are better
in MNEs than local companies ·
Collective bargaining plays vital role in wage
determination |
·
MNEs provide relatively better compensation
than other private organizations. ·
Except for some govt. organizations, the power
of labor unions to negotiate wages has weakened over time. |
·
Wages and salaries are mostly higher in MNEs
than other organizations in the private sector and in govt. organizations. |
Safety & Health |
·
MNEs follow the national and international laws
pertaining to health and safety as well as environmental protection |
·
MNEs take care of their employees regarding
their health and safety as compared to local organizations. |
·
MNEs are particular about health and safety of
their employees and meet the ILO requirements in this regard |
Discussion and Conclusion
In the words of Tayeb (1988) culture evolves values, attitudes and meanings
historically. They are, then as time passes, share with the members of a given
community, and which influence their material and non-material way of life.
According to this definition, a culture stems from history. Therefore, a glance
at the history of these countries would be beneficial. A historical look shows
substantial convergence, because of their being colonies of British Empire for
about one century. This colonization is considered one of the driving forces
for nurturing elitism in common society of these countries, particularly,
feudalism and civil servants penchant (Khilji
2004). In practice, the law or the law-enforcing bodies
protect the affluent and the powerful; the rich or powerful can commit a crime
and go unpunished either through bribe or gaunxi (connection) (Hussain
1999). The manifestations of elite culture are also found
within the organizations in the South Asian countries. HR policies and
practices favor marketing or business graduates over other employees and
managers over non-managers (Khilji
1999). Salary differentials between entry-level employees
and executives are as high as 800 percent; biases are reflected in various HR
policies and practices (ibid.) also.
All the countries,
under study, have Indian origins. Pakistan and India have been parts of United
India till 1947. Sri Lankan population consists of Sinhalese migrated from
North India and Tamils migrated to Sri Lanka from South India (Encarta
Encyclopedia 2006). The Indian origin contributes a lot towards convergence in
many aspects of life of the people of respective countries. Thus many of the
prevailing customs and tradition, that form the edifice of the society, can be
traced back to the Indian origins (Khilji
2004). The social set-ups in these countries are family
centered and people are mostly dependent. This pattern of dependence (upon
elders or seniors) pervades all human contact and people carry strong need for
dependence/security. Critical analysis of the superiors’ views, independence in
decision making, and disobedience, are met with disapproval. Consequently, people
accept authority unquestioningly. Thus organizations in these countries, in
general, are highly bureaucratized, with centralized authority, and employees
have to work not to say.
ILO, as an
institution, has substantial impact on HR policies and practices. ILO
recommendations regarding compensation and health and safety have been observed
by MNEs operating is these countries as revealed in the report (ILO)[1].
However, the performance of MNEs regarding training of the employees has been
measured with less satisfaction in Pakistan. This is because of absence of
clear rules initiated by the government to bound MNEs. The HR functions as
training, compensation, and health and safety are minimal as compared to
industrially developed countries. Under such situations, a modest contribution
of MNEs in training, compensation and health and safety seems significant.
Finally, the
study focused on the impact
of national culture
and one supranational institution (ILO) on certain HR practices. National culture can also be
operationalized from different perspectives to evaluate its impact on HRM. ILO,
too, has not inhibited itself to the above mentioned HR functions only. The
implications of its recommendations on other HR functions need to be studied.
There are certain other contextual factors e.g. government intervention,
national institutions, economy, political culture, etc. that have definite
impact on HR practices. This invites further research. It can be safely
concluded that the study does indicate a significant convergence in HRM and
that there have been some common cultural factors operating in these countries.
Cultural uniformity among these countries
plays an important role in developing a model. A model, that represents
realities but at the same time it conceals realities too. So this model limits
itself to indicating same cultural influences and observance of ILO recommendations regarding training compensation
and health and safety in these countries. Further researches are needed
to improve the strengths of the model. However, in this volatile and global
world changes in all walks of life are most frequent. Under such circumstances durability of a model remains at stake.
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[1] International Labour Organization (2001). Subcontinent on Multinational Enterprises: Governing Body, 280th Session, Geneva.