29
Abstract
Human Resource (HR) professionals in Indian Public Sector Enterprises (PSEs) have traditionally focussed
on administrative tasks, recruitment and employee assessment. Understanding the cultural, social and
economic context and the drivers of socio-economic change is critical to understanding the magnitude and
impact of the evolution of HR function in Indian PSEs. We present a contextual analysis of the evolutionary
changes and the resultant new role of the HR function and the HR professional in large manufacturing
PSEs in India. An evolved HR function and HR manager can deliver immense value to the organizational
competitiveness of large Indian PSEs in the global marketplace by embracing change and creating a role
for itself as the vehicle and agent of organizational change bymanaging the development of the organization's
most important resource - its people.
Key Words : Liberalization, HRM, Performance Management.
Transition in Human Resources Function in Public
Sector Enterprises in India - in the context of
economic reforms
Ms Kamakshi Raman*
Ms Usha Singh**
Background
After independence in 1947, India adopted a planned
government intervention strategy to build its
predominantly agrarian economy. Facedwith pockets
of acute poverty, the country's leaders adopted a
socialistic economic development policy with
exclusive public ownership of key industries including
Defence, Railways, Cement, Fertilizers and Iron &
Steel. The objectives of Public Sector Enterprises
(PSEs) were to build infrastructure for economic
development, create employment opportunities,
promote balanced regional development and
generate development resources. Investment in PSE
infrastructure spurred the growth and prosperity
of private sector enterprise. Establishment and
support of engineering and technical educational
institutions by the government ensured availability
of technically skilled manpower. PSEs played a
strategic and commanding role in the nation's
economic development.
However, initial exuberance over the role of PSEs
in creating new areas of industrial and technical
competence dissipated over the years. Numerous
structural problems including low productivity, poor
project management skills, over staffing, lack of
technological upgrades, inadequate attention to
research and development, low priority to human
resources development and above all, a lack of
autonomy and political interference, began to
manifest in many of these enterprises. By the end
* DGM (Pers), SAIL, New Delhi
**Sr Manager (Pers), SAIL, New Delhi
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Feature Article
30
Feature ArticleGROWTH, VOLUME 33, NO. 4, JAN-MAR, 2006
of June 1991, India's foreign currency reserves had
dwindled to US$ 975 million - not enough to pay
for two weeks of imports. Part of the nations gold
reserves were pledged as collateral to access the
international market and avoid a loan of default.
Exports shrunk and foreign commercial lenders
refused loans to India. Industrial growthwas negative
at 1.3 percent while inflation soared at above 16
percent. The GDP growth in the Fiscal Year 1992
was less than 1 percent.
These problems underscored the compelling need
for the country to review its inward-looking �permit-
and- licence Raj� policy of excessive bureaucratic
control. Faced with these critical problems,
Government of India embarked on the structural
liberalization of the Indian economy, which was a
turning point event in the country�s economic
development. It was realized that the process of
liberalizing the economywould be akin to un-caging
a tiger, in the same vein as other successful south-
east Asian economies. The excessive protectionist
policy instruments of duties and tariff
barriers served to keep the tiger safely
confined and prevented other
predators from coming in. With these
protections removed, all competitors
would need to fend for themselves in
the extremely competitive global
market. The government understood
the Darwinian principle of survival of
the fittest in a highly competitive, free
market environment and realized the
lackof experienceof PSEs in competing
in such environments. In an effort to
mitigate the negative impact of the sudden economic
changes and facilitate the transition to the freemarket,
the Indian government decided to liberalize the
economy in a phased manner.
This liberalization has shaken the fundamental
founding principles of PSEs and questioned their
position in, and relevance to, the Indian economy.
In the post 1991 liberalization era, PSEs do not enjoy
any special privileges or benefits from the Indian
Government. Most have to bear the burden of past
legacies while competing with smaller and more
competitive private enterprises. Unlike the
experiences of other countries like Great Britain,
which adopted sweeping privatization, the public
enterprise in India continues to be an important
component of Indian industry evenafter liberalization.
At the same time, there is growing consensus that
theGovernment has nobusiness engaging in business
and industry should concentrate on social issues
like health, education and social security. There is
a case for Government�s withdrawal from non-core
sectors for long term efficient use of capital, and
letting these enterprises operate independently in
an increasingly competitive and market oriented
environment. However, in certain core sectors of
the economy, PSEs continue to play an important
role for the Indian economy.
Following liberalization of the Indian economy, PSEs
underwent fundamental restructuring to bring in
greater flexibility, competitiveness and accountability
to ensure higher returns and greater transparency
for the public investments in PSEs In the human
resources area, these efficiency driven
changes included staffing decisions
resulting in the elimination of low
priority jobs and management
interventions to change the mindset
of employees As discussed earlier,
given the contextual perceptions of
PSEs with respect to their socio-
economic position in the nation�s
mindset, such fundamental and
structural change has great
significance and deep impact upon
many large PSEs� human resource
base, and indeed onmuch of the nation�s populace.
The following sections present a contextual analysis
of the evolutionary changes in the human resources
function and the resultant new role of the human
resource manager in large manufacturing PSEs in
India. The authors believe that understanding the
cultural, social and economic context and the drivers
of socio-economic change is critical to understanding
themagnitude and impact of the evolution in Indian
PSEs. The importance of PSEs to the Indian economy
and its populace and the relevanceof effective human
Unlike the experiences of
other countries like Great
Britain, which adopted
sweeping privatization,
the public enterprise in
India continues to be an
important component of
Indian industry even
after liberalization.
31
Feature ArticleTRANSITION IN HUMAN RESOURCES FUNCTION IN PUBLIC SECTOR ENTERPRISES IN INDIA : RAMAN & SINGH
resource management to the success of PSEs,
underscore the need for multi-faceted contextual
analysis of the issues presented in this paper. We
use our analysis to develop and present a vision of
the emergent role of HR and the new HR manager
in Indian PSEs.We envision these new evolutionary
roles of both the HR function and the HRmanagers
are necessary to maintain the competitiveness and
relevance of PSEs in the new Indian economy.
Transitory Role Of HR
The new economic policy has pushed the Indian
economy into the race for competitiveness in the
global marketplace. Many national economies have
created global competitive advantage by making
structural adjustments accompanied by right
investments on developing their human resources.
The same strategy has worked at the organizational
level. While the new economic environment has
significance for all stakeholders, it is especially
important to the HR fraternity due
to its unique situation as the primary
means by which an organization
harnesses and nurtures its people
power. The HR function has
undergone aparadigmatic shift from
a primarily administrative function
meant to take care of the comforts
of employees in day-to-dayworking;
to its current role as a strategic
partner in the organization�s
effectiveness in realizing its strategic
goals. It is necessary for HR to
proactively anticipate trends and to
develop strategic responses to
manage the challenge of change.
Here we present some of the evolutionary changes
that have defined the transitory role of HR, in various
HR sub-systems in large manufacturing PSEs of the
Indian economy.
Manpower and Recruitment
System
Transition from recruitment to downsizing :
This is an important transitionwhich has taken place
with the onset of globalization in the country and
represents a paradigm shift in howhuman resources
are perceived by organizations. In the late 50s and
early 60s, as many manufacturing PSEs were being
established, they were seen as vehicles to fulfilling
the social obligation of generating employment. PSEs
were established in areas of low economic
development and displaced the local and tribal
populace from their homes and agricultural land.
Therefore they had a well-publicized commitment
to provide employment in lieu of this displacement.
At the time, large scale recruitment was the key
activity for Labour / Welfare Officers of PSEs.
With economic liberalization, these enterprises
started to benchmark their productivity level and
manpower costs with their domestic and global
competitors. This led Indian PSEs to realize that
the advantage of low employment cost in India was
being eroded through the social benefits of excessive
staffing. The hidden costs of excess, labour, including
the lack of accountability from
excess bureaucracy, over-
supervision, culture of casualness
and low motivation, were also
recognized. These factors drove
the focus on the lean and nimble
organization and the subsequent
change in HR policy from
benevolent and socialist
recruitment to efficiency driven
downsizing. For example, the steel
industry, which was amongst the
first sectors to be thrown open to
market economy and the
globalization in the country, was
labour intensive. The extent of
change can be appreciated by the extent to which
the Public Sector Steel Industry was compelled to
design innovativemeasures to drastically downsize.
This was one of the largest downsizing interventions
in India�s post economic liberalization. From the
employee strength of 192,000 in 1991; to 189,500
in 1995; to 159,900 in 2000; and 126,900 in 2005,
the steel PSE has approximately reduced its staffing
levels by 50% in the last 25 years.
The HR function has
undergone a paradigmatic
shift from a primarily
administrative function
meant to take care of the
comforts of employees in
day-to-day working; to its
current role as a strategic
partner in the organization�s
effectiveness in realizing its
strategic goals.
32
Benchmarking productivity with global players
towards focus on leaner nimble workforce
Erstwhile manpower practices of manpower based
on time and motion studies was done away with,
due largely to experiential learning that indicated
that these studies reduce productivity levels. In
addition, changed requirements on the production
floor, such as new work methods, faster response
time, smaller group sizes, a greater reliance on
automation and rejuvenating the structure and
operations of departments, added to the challenge
ofHRmanagers to position the right number of trained
manpower. For example, during the massive
modernization of Steel Plants in the mid 80s, the
HR challenge was to identify young, educated and
employees from the existing work-force who had
the right attitude to adopt new technology .The
HumanResourcePlanning forModernization involved
detailed planning to ensure that therewere no delays
in the new technology being commissioned, while
manpower selected internally. Furthermore, the
opening of the Indian Economy forced PSEs to
benchmark their staffing levels against global
competitors. These factors made the manpower
norms of yesteryears a thing of the past and resulted
in a relatively leaner workforce. Today, almost all
PSEs have awell-defined, long-termmanpower plan
for 5-10 years, which is aligned with their business
plans. They aim to reachmuch lower staffing levels,
with detailed succession, retirement, recruiting, and
downsizing plan in the coming years.
Designing and implementing innovative employee
separation schemes
With the current focus on a lean and nimble
organization, the taboo associated with the
downsizing is now a thing of the past. Large PSEs
worked ingeniously to downsize. For example, faced
with a severe cash crisis, the Public Sector Steel
Industry opted for Voluntary Separation Schemes
basedondeferred payments to limit large, immediate
cash outflows and create a win-win situation for
both the employees and the organization. The
scheme received a tremendous response andmore
than 13,500 employees took voluntary separation
in a fourmonth period in 1999. To ensure its success,
HR professionals reached out to target employees
by counselling them, and even their familymembers,
to help employees decide to accept the golden
handshake being offered. In addition, sabbatical
schemeswere introduced to encourage employees
to take up alternative employment or vocations. It
is noteworthy that the same organizations that
competed to employ more manpower in the past,
designed innovative methods to shed excess staff,
in spite of labour legislations that strictly denied a
hire and fire policy.
Ratio of white collared to blue collared
Technological advances emphasized the shift to
operate more with more skilled and technically
qualified, managerialwhite collared personnel. This
weakened the impact of labour unions and gave
Name of PSE Industry Year of White collared Blue collared Ratio :
Inception employees employees White/Blue collared
Steel Authority of Steel 1955 14329 112528 1 : 7.9
India Limited
Bharat Heavy Heavy 1964 9984 33318 1 : 3.3
Engineering Engineering
Limited
National Power Power 1975 9294 14197 1 : 1.53
Grid Corporation
Oil and Natural Oil 1993 38000 15000 2 : 5.1
Gas Commission
Table 1 : The changing ratio of Skilled, white-collared and unskilled and semi-skilled blue-collared employees
since inception in large manufacturing PSEs in India.
Feature ArticleGROWTH, VOLUME 33, NO. 4, JAN-MAR, 2006
33
management the flexibility to avail of specific
outsourcing options as needed in complementary
areas such as maintenance, capital repairs and
project modernization. Table 1 below shows this
shift fromunskilled and semi- skilled, �blue-collared�
employees to a more skilled, �white-collared�
workforce. This can be appreciated by the reducing
ratio of Blue-collared to White collared employees
from their inception in the four key manufacturing
PSEs operating in core sectors.
Changed profile of the skilled workforce
In earlier times, a basic college education was
considered adequate for successful careers in areas
such as Marketing, HR and Finance. Recently, the
scenario has changed with preference for
management education. However, the scenario has
not changed much in the Technical areas, where
management skills are developed with on-the-job
training, coupled with exposure to management
courses conducted in-house or by
management experts off-site.
Industrial Relations (IR)
Systems
Transition fromworkers/unions
appeasement to union-
management partnership :
IR used to be a dreadedword for
organizations in large PSEs. The
pre-liberalization era saw
increases in the bargaining power
of trade unions, due to the fact
that themajority of the workforce
was illiterate and gullible.
Additionally,many key trade union
leaders took to mainstream national politics. The
union movement was a powerful force to reckon
with for human resources and industrial relations.
This led to a culture of union appeasement. Industrial
peacewas brokered by placating influential union
leaders and their demands for populist measures
to be taken by organizations.
This scenario changedwith economic liberalization
and the opening up of PSEs. Unions and workers
understood the business realities and, today, are
partners-in-progress and involved in the business
growth plan. As a result, management is able to
implement strategies and initiatives driven by
business needs and cost competitiveness, including
downsizing and rationalization of employee benefits,
reducing and re-evaluating subsidies. Industrial
Relations Systems in India have transitioned from
aposition ofunionappeasement to one characterised
by a union-management partnership.
Transition from labour legislation compliance to
employee development
As model employers, the Indian PSEs had a history
of providing employees with amenities and benefits
beyond those required by labour legislation. With
economic liberalization and efficiency driven staffing,
it dawneduponPSEs to investmore in theeducational
and skill development of employees to ensure a
motivated and vibrant workforce that would go the
extra mile to meet organizational objectives.
Excessive amenities and benefits
are replaced by measures for
effective employee development
such as training, re-training, skill
development and re-deployment.
Transition from communication
with unions to direct dialoguing
with workmen
During the economic
liberalization, Indian PSEs
realized that understanding
business realities and objectives
need not be confined to
management or union leaders.
Rather, this understandingmust
be appreciated by the entire
employee base. With an increasingly educated and
skilled workforce, communication of business
requirements and objectives became all the more
necessary. The declining image of union leaders
and their alienation from theworkforce contributed
to this need. Efforts were made to install systems
characterized by open and large-scale
communications, leading to change-ready
organizations. Understanding the strength of direct
dialogue with the workforce, upper management
Feature ArticleTRANSITION IN HUMAN RESOURCES FUNCTION IN PUBLIC SECTOR ENTERPRISES IN INDIA : RAMAN & SINGH
Unions and workers understood
the business realities and, today,
are partners-in-progress and
involved in the business growth
plan. As a result, management is
able to implement strategies and
initiatives driven by business
needs and cost competitiveness,
including downsizing and
rationalization of employee
benefits, reducing and re-
evaluating subsidies.
34
and CEOs of large PSEs invested time and effort
in reaching out to the employees. Appropriate use
of e- communications technology has made direct
interaction with CEOs of large PSEs possible. For
example, in the Steel PSE, approximately 75,000
employees, unprecedented number, were included
in the communications initiative by topmanagement
in 2005 alone. In theOil Sector PSE, employee portals
facilitate a direct dialogue with the Chief Managing
Director and the Head of HR. This was literally
unheard of in earlier times and has been very popular
amongst the workforce. These trust development
efforts and the consequent new found faith in
management has had significant beneficial impact
on industrial relations, human resources, and on
entire organizations� flexibility and receptiveness
to change.
Performance Management System
Transition from �confidential report employee
evaluation system� to
performance appraisal systems:
The previous Annual Confidential
Report (ACR) system adopted by
PSEs was used as a mechanism to
promote or discipline employees.
It contributed very little to the
improvement of employee
performance. Typically, the ACR
system had a prevalence of
personality-oriented traits like �zeal�,
�keenness�, �loyalty�, �personality�,
�patience�, �sobriety �,
�resourcefulness�, �tact�,
�temperament�. Work related traits
were either conspicuous by their
insignificant numbers or by their entire absence.
There was a considerable element of subjectivity
into the appraisal report in the ACR system.
Here, the challenge for large PSEs was to design a
performance appraisal system that would effectively
differentiate theperformance of employees and serve
as an instrument of reinforcement, positive and
negative, and motivate employees to contribute to
realization of organizational goals. In this regard,
the systemic improvement put into effect include:
mutual establishment of Key Result Areas (KRAs)
at the beginning of the year that are directly linked
to business results; performance evaluation against
these KRAs, thereby substantially reducing subjective
evaluation; assessing readiness for future growth
through potential assessment, 360 degrees
performance evaluation and the Balanced Scorecard
approach.
Linking rewards to performance
The majority of compensation packages of PSEs
employees are linked to hierarchical levels in the
organization and do not give significance to
performance contributions However, progressive
PSEs have attempting to depart from this position
by offering greater linkagewith individual and team-
based performance. The variable pay group and
departmental schemes are linked to profitability
parameters, techno-economic performance
measures and reaching sales and
production targets For instance, in
one Oil PSE, there are over 250
individual best performance
awards for Customer Interfaces,
with an annual value of
approximately US$ 300,000
Individual and team excellence is
increasingly being recognized by
PSEs through such attractive
performance-based reward
mechanisms.
Career and Succession
Planning System
Transition from Seniority-based
to merit-based promotion
Traditionally, career planning for blue collared
employees in PSEs continues to follow the well-
entrenched seniority-based system. However, for
white collared employees, PSEs have recognized
the need to differentiate based on performance to
ensure grooming for future leadership positions.
In many PSEs, well defined Career Path Models are
made available at the entry stage. These provide
for the development ofmultiple skills andmanagerial
Feature ArticleGROWTH, VOLUME 33, NO. 4, JAN-MAR, 2006
In many PSEs, well defined
Career Path Models are made
available at the entry stage.
These provide for the
development of multiple skills
and managerial abilities
through job rotation and inter-
disciplinary assignments
covering multiple levels in the
organization, multiple location
and sites of operation and
multiple functional operations.
35
abilities through job rotation and inter-disciplinary
assignments covering multiple levels in the
organization,multiple location and sites of operation
and multiple functional operations. This provides
transparency and instill a long-term outlook for
employeeswith options for career growth. Measures
such as Assessment and Development Centres,
CompetencyMapping and various Psychometric tools
are currently used in varying degrees to facilitate
the process of career and succession planning. Role
Directories have been developed to clarify the
desirable attributes required for future senior roles.
As a result of these measures, merit based growth
is an accepted norm in PSEs, as against seniority
dominating the system earlier.
Of late, many PSEs have further departed from
seniority based career planning systemsby identifying
key positions linked to their business plans and
identified rising executives who could best fit the
key positions. Though many of these �key drivers�
are relatively lower in the hierarchical
level, they are being given wide global
exposure and the autonomy to operate.
This picking up of the �blue-eyed boys�
has posed further challenges to the HR
professionals to carry the rest of good
performers in themainstream, through
much career counselling and morale
boosting measures. Continual review
of organization structures are carried
out in PSEs to speed-up decision
making to keep up with the need of
the times.
Training Systems
Transition to training for employee development:
For the workforce, training was initially focussed
on technical skill development since many PSEs
were recruiting unskilled labour .Training was done
with the help of in-house training institutes. Over
the years, as amore technically qualified and skilled
labour force started to join the industry, the emphasis
shifted to development and upgrading of required
technical and operational skills. Additionally, due
to manpower downsizing, multi-skill training and
training for re-deployment were emphasized. For
example, the concept of the �master� skilled worker
with credibility and respect on the shop floor, training
his co-workers gained popularity in the Steel Industry.
For the white collared employees, a 12-18 month
induction training period consisting of both technical
and managerial training is common practice
Additionally, management programmes are
developeddelivered in-houseor deliveredby external
management experts Many large PSEs have
established Management Institutes with state- of-
the- art technology and full fledged in-house trainers.
At different levels in the hierarchy, project and
operational issue based training is being provided
in India and abroad.
HR As A Strategic Business Partner
Strategic alignment ofHRwith Business objectives:
With liberalization, HR departments are integrating
and in many cases, deriving their operational plans
from strategic business plans. This aligns their focus
to the mission, vision, and business
goals of the organization. Almost all
leading PSEs have a well defined HR
Philosophy Statements that form the
basis for development the core values
andbehavioural norms for employees.
Workshops and communicationswith
large group of employees occur on
a continual basis to reinforce the
understanding and applicability of the
HR Philosophy, HR Vision and its
Mission.
Role transformation of HR
Increasingly, the traditional
administrative and routine tasks that defined the
HR function are being automated or performed
elsewhere. Developments in information technology
have led to the automation of many routine
administrative tasks. The increased organizational
cost-consciousness has resulted in several HR
activities being outsourced. Efforts to increase the
accountability of linemanagers for their performance,
has resulted in empowering them to manage all
their resources, including human resources. Thus,
HR is now focussed on roles that are more strategic
Feature ArticleTRANSITION IN HUMAN RESOURCES FUNCTION IN PUBLIC SECTOR ENTERPRISES IN INDIA : RAMAN & SINGH
With liberalization, HR
departments are
integrating and in many
cases, deriving their
operational plans from
strategic business plans.
This aligns their focus to
the mission, vision, and
business goals of the
organization.
36
in nature, such as employee commitment and
motivation.
HR focus on building organizational culture for
enhanced employee commitment andmotivation:
The significance of establishing the desired
organization culture is a recognized agent to bring
in synergy in the organization. Realizing that
organizational culture is relatively enduring, HR
managers are striving to understand it and develop
specific and appropriate interventions to enhance
employee commitment, motivation and
performance. Tools such as Employee Satisfaction
Surveys, Culture and Climate study are commonly
used by PSEs to understand the organization culture.
These are administered both by in-house HR
managers and external experts and consultants. For
example, organizational culture is being measured
on the parameters of �OCTAPACE� (Openness,
Collaboration, Trust, Authenticity,
Pro-action, Autonomy, Confrontation
and Experimentation, www
.tcm.com/trdev/udai_pareek.htm).
Role of HR in divestment, mergers
and acquisitions
The global phenomenon of
concentrating on core competency
has been adopted by Indian PSEs
through restructuring and
strengthening of core businesses
functions and competencies, and
divestiture of non-core areas. For
example, the Steel PSE divested its
�Captive Power Plants� as it considered �Making Steel�
its core business. Such strategic moves involved
handling employees� anxiety, their apprehensions
and expectation. This was a significant task in light
of the significant impact on the hugeworkforcewith
strong union support. Similarly, present attempts
to consolidate industry dominance in the Power
and Oil Sectors through Mergers and Acquisitions
would challenge the HR fraternity to establish the
cultural fit and manage the uncertainties in
employees� minds. HR managers have played
significant leadership and coordination roles in
facilitating theseprocesses by acting as change agents
and communicating the business imperatives of the
restructuring exercises being undertaken.
HR As A Social System
Focus towards Corporate Social Responsibility
(CSR)
Traditionally, large PSEs functioned as representatives
of the State in their manufacturing bases and served
regional development objectives throughmeasures
such as building andmaintenance of roads, schools/
colleges, hospitals, peripheral development and adult
literacy and education in the nearby villages.
However, the reasons of carrying out such initiatives
have undergone a change over the period of time.
It has been realized that such initiatives provide
strategic gains and ensure a continuous social
importance for the PSE. They help to build a brand
name which serves to attract the best talent and
helps business. These PSEs have
taken advantage of their legacies
of being �Temples of Modern India�
and made further investments in
their commitments to Corporate
Social Responsibility. Many PSEs
have allocated parts of their net
profits towards CSR efforts and
continue to work for social
improvements in areas such as
Disaster Relief Management, Water
Management Projects, providing
Drinking Water, eradication of
diseases like Tuberculosis, AIDS
control.
Transformation of values at work-place
As India joins the global economy and sheds many
of its formerbarriers, there is an interesting resurgence
of its faith in its own ethos and values. Several HR
thinkers and practitioners are finding meaningful
application of the traditional Indian values framework
in their efforts towards corporate and national
renaissance. Based on the foundations of Indian
traditions and values, many are advocating the need
to significantly transform the values at theworkplace,
which was certainly not considered business-like
in the yester years.
Feature ArticleGROWTH, VOLUME 33, NO. 4, JAN-MAR, 2006
Many PSEs have allocated
parts of their net profits
towards CSR efforts and
continue to work for social
improvements in areas such
as Disaster Relief
Management, Water
Management Projects,
providing Drinking Water,
eradication of diseases like
Tuberculosis, AIDS control.
37
Transitory Role of the HR
Professional
Weutilize the above evolutionary contextual analysis
of the economic liberalization and the transitory
role of HR in PSEs, to present the transitory role of
the HR professional in this context. To arrive at the
future Role of the HRProfession andHRprofessional,
we trace the evolutionary changes in the profile of
the HR manager in the last 50 years or so, driven
by the abovementioned changes in the HR function.
1950�s And 60�s : Welfare Focus
The primary role of �labour officer� in this era was
to ensure adequate intake of unskilled and semi-
skilled workforce and lure them to plants/projects
to be set up in �green field� sites, ensuring their
discipline, providing a comfortablework atmosphere.
In all, it was a purely administrative function.
70�s And Early 80�s :
Personnel Focus
In addition to the welfare focus
mentioned above, additional
responsibilities in these times included
managing the industrial relations front
and ensuring a strong collective
bargaining position, designing and
managing compensation structures,
performance appraisals and promotion
policies, rewards and incentive systems.
80�s : HRD Focus
The focus of the HR professional in the
80�s shifted to development of the
organization�s human resources with a focus on
designing of training interventions for employee
development, designing employee career paths,
planning for future successions.
90�s Onwards : Strategic Focus
In this period, the focus of the HR professional has
seen a paradigmatic shift from supporting business
strategy to playing an integral role in driving the
business strategy .This is accompanied by amove to
a more consultative style of operation. In addition,
the HR professional plays a primary role in ensuring
and building organizational work culture, ensuring
ways of increased employee commitment during this
period. In addition, HR plays an important role in
building strategic and tactical intangible assets for the
organization, including its brand name and goodwill
through initiatives such as CSR, enhancing employee
morale and assessing and improving organizational
culture.
Vision and Challenges for the HR
Profession and the HR Professinal
In the 15 years since the liberalization of the Indian
economy, many PSEs under have acquired the scale
of operations and economic means to be significant
players in their global markets. The primary role of
the human resources function in these PSEs is to
prepare the organization and its workforce to
continue to face this challenge successfully. In order
to survive and prosper in this competition, HR must
facilitate the organizations to nurture learning by
stimulating creativity and innovation
and creating appropriate
organizational cultures that foster the
empowerment of its people.
HRmust play a vital organizational role
in promoting and deploying flexible,
family-friendly workplace practices.
Flexiblework schedules and time-off,
family and personal leave and
sabbaticals, job sharing,
telecommuting, employee assistance,
counselling, child and elder care,
financial consulting, are some of the
instruments that may gain a greater momentum in
IndianPSEs. Thechallenges facing theHR in the future
are :
1. Developing a global mindset inside the HR
organization, including a deep understanding of the
new global competitive environment and the impact
it has on the management of people worldwide;
2. Aligning core human resource processes and
activities with the new requirements of global
competitionwhile simultaneously responding to local
Feature ArticleTRANSITION IN HUMAN RESOURCES FUNCTION IN PUBLIC SECTOR ENTERPRISES IN INDIA : RAMAN & SINGH
HR must play a vital
organizational role in
promoting and
deploying flexible,
family-friendly
workplace practices.
38
issues and requirements; and
3. Enhancing global competencies and capabilities
within the HR function so it can become a borderless
business partner in rapidly exploiting business
opportunitiesworldwide.
While we have earlier mentioned the strategic focus
of the HR function in the last 15 years, we need to
accept the fact that there is still a large gap amongst
PSEs not fulfilling this role of being a business partner.
The HR function in PSEs today is going through an
internal struggle of learning to do away with the
routine administrative issues that have traditionally
been its sense of identity and power and recognition
within organizations. An additional struggle is the
challenge of acquiring new competencies to emerge
as change agents for the organization while dealing
with issues which are traditionally �non HR�. Many
HRdepartments of PSEs in the recent past are headed
by so called �nonHR� executives and this has shaken
themythofHRbeing the jobofHRpeople alone.Many
HR professionals are reluctant to
accept the fact that they need to
acquire complete business skills,
beyond just excelling in HR
competencies, to devise appropriate
HR strategies that are strategically
alignedwith business objectives.
The authors believe that to pursue a
vision of strategic alignment with
business objectives for the HR
profession, future HR managers
themselves should have the following
qualities :
Business Driven - Irrespective of the organization
sheworks for, theHRDManager should be driven
by the business purposes or objectives.
Research Driven - Even if she doesn�t undertake
research herself, she should be willing to base
their judgments and strategies on sound scientific
enquiry and research findings.
Process Sensitive - She should be sensitive to
internal processes including work organization,
organizational structure, business functions
including their cost and benefits, decisionmaking
styles, centralized vs. decentralized control, and
the organization�s culture, values, norms.
Systems Driven - She should be able to see
systems as facilitators of routine business function
and enhancers of organizational effectiveness,
while understanding their limitations. Awareness
of variety of systems that deal with business
functions like TQM, ISO, MIS, SAP, ERP, HRIS,
financial information system is not only beneficial,
it is required-
Good Human Being - She should have a positive
view of people and be a value-driven human
being.
Change Manager - She should have analytical
and diagnostic skills and be skilled and trained
in managing the dynamics of change and use
of various managerial interventions in
organizational dynamics. She should display role-
making behaviour, as opposed to role-
taking, and have the ability to see
the big picture and integrate
themselves and their interventions
with the business they serve.
Moving beyond the traditional
recruitment and performance
appraisals, she has to realize that real
development of the human resources
of an organization cannot occur if a
large part of her time is spent on
routine administrative tasks. As a
willing participant, shemust embrace
change and serve as the vehicle and
agent of change in organizational culture, its values
and missions to achieve the strategic alignment
between the organization�s objectives and its most
important resource - its people.
Conclusions
HR professionals in Indian PSEs have for decades
focussed on creating and administering systems,
career development, training, selection and rewards
that define the key parameters for assessment of
employees basedonorganizational roles and careers.
Feature ArticleGROWTH, VOLUME 33, NO. 4, JAN-MAR, 2006
The HR function in PSEs
today is going through an
internal struggle of
learning to do away with
the routine administrative
issues that have
traditionally been its
sense of identity and
power and recognition
within organizations.
39
Traditionally, the human resource function added
value by creating systems that produced
bureaucratically correct behaviour and the
predictable and orderly development of people and
their careers. Not surprisingly, it gained a reputation
as the bastion of the status quo. However, with the
passing of the era of the traditional bureaucratic
organizations, stability needs to be replaced by
accepting and embracing change, innovation and
new organizational designs. This represents both
a major threat and a major opportunity for the HR
function to re-invent itself as a strategic partner in
achieving organizational objectives. Without
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Feature ArticleTRANSITION IN HUMAN RESOURCES FUNCTION IN PUBLIC SECTOR ENTERPRISES IN INDIA : RAMAN & SINGH