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A STUDY OF HUMAN RESOURCE PRACTICES IN BPO SECTOR
Dr. Rupinder Kaur
Assistant Professor in Commerce, GGS Khalsa College for Women, Jhar Sahib, Ludhiana
ABSTRACT
The purpose of the paper is to examine the impact of human resource practices on job satisfaction and organizational commitment on employees of BPO units in and around Chandigarh. The study proposes and tests the hypotheses on the relationship between human resource practices, job satisfaction and organizational commitment. Data is collected from 165 employees. The results indicate that appropriateness of prevalent HR practices is perceived to be different by the managerial employees and HR practices positively impact the level of job Satisfaction and organizational commitment of the managerial employees. Management should pay attention towards enhancing motivation, job satisfaction and organizational commitment through rewards and recognition. Rewards could be monetary or non-monetary depending upon the performance of the employees.
Keywords: Human resource practices, Job satisfaction and Organizational commitment
INTRODUCTION
The impact of industrial liberalization in the domestic economy since 1991 has been very strong. The Indian BPO Units is being nurtured for an exponential growth, since the quota regime has been withdrawn.. The desire to be world class and serve as a benchmark is an aspiration nurtured by most of the companies. Making this transition requires efforts in a myriad of directions. The result is that this units has become one of the largest industrial sectors and export earners in India. These fruitful results have created a very challenging environment for the industrialists, as globalization has lead to setting up of new benchmarks for everyone. „Any practice that deals with enhancing competencies, commitment and culture building can be considered as an HR practice. The practice can take the form of a system, a process, an activity, a norm, a rule, an accepted or expected habit, or just a way of doing things. Good HR practices do indeed make a difference in term of business effectiveness.
Good HR practices are those that contribute to one or more of the three C‟s: Competencies, Commitment and Culture. They need to be identified and implemented cost-effectively, reviewing and revising them from time to time to enhance their effectiveness and appropriateness‟. HR Practices include: HR Planning, Recruitment &
Selection, Induction, Training & Development, three C‟s: Competencies, Commitment and Culture. three C‟s:
Competencies, Commitment and Culture. They need to be identified and implemented cost-effectively, reviewing and revising them from time to time to enhance their effectiveness and appropriateness‟. HR Practices include: HR Planning, Recruitment & Selection, Induction, Training & Development, Performance Appraisal, Career Planning, Fringe Benefits, Reward & Recognition,Welfare Activities as per Statutory Requirement,
85 | P a g e Welfare Activities beyond Statutory Requirement, Safety, Health and Environment Policy, Suggestions Scheme, Promotion & Transfers, Exit Policy.
JOB SATISFACTION
For an individual, Job Satisfaction would mean that something within him reacts favourably to the job and its environment. Locke (1990) gives a comprehensive definition of Job Satisfaction as involving cognitive, affective and evaluative reactions or attitudes and states that it is a “pleasurable or positive emotional state resulting from the appraisal of one‟s job or job experience.”
ORGANIZATIONAL COMMITMENT
Organizational Commitment, or Employee Loyalty, is the degree to which an employee identifies with the organization and wants to continue participating in it actively. Like a strong magnetic force attracting one metallic object to another, it is a measure of the employee‟s willingness to remain with a firm in the future. It often reflects the employee‟s belief in the mission and goals of the firm, willingness to expend effort in their accomplishment and intentions to continue working there.
The works of Meyer and Allen (1991) opened a fruitful line of research with their conceptualization of commitment as a three dimensional construct. According to them, commitment is the aggregate result of three different but related components viz., Continuance Commitment, Affective Commitment and Normative Commitment. The three dimensions are as follows: Affective Commitment is defined as an emotional attachment to the organization such that the strongly committed individual identifies with, is involved in and enjoys membership in the organization. In this case, an individual strongly identifies with the goals of the organization and desires to remain a part of the organization. This is the ideal 'happy' state for an individual.
Continuance Commitment involves commitment based on the costs that the employee associates with leaving the organization. The individual remains with an organization because of a perceived loss of sunken costs. The individual believes that he/she has invested a great deal of effort/time and has to remain in the organization.
Continuance commitment develops on the basis of two factors: The magnitude of the investments individuals make, and the perceived lack of alternatives (Allen and Meyer, 1990). Normative Commitment involves the employee‟s feelings of obligation to stay with the organization. Workers with a strong normative commitment feel that they ought to stay within the organization because he/she believes they should. Based on this commitment, the individuals exhibit certain behaviours because they consider it the right and moral thing to do.
II. REVIEW OF LITERATURE
Simmons (2003) highlighted the need for balancing performance, accountability and equity in stakeholder relationships by pursuing socially responsible HR practice. Harel and Tzafir (1999) highlighted the effect of human resource management practices on the perceptions of organisational and market performance of the firm.
Chen, Hsin-yi (1995) examined the difference of organisational climate and human resource practices between American and Chinese companies in Taiwan. Jacobson, R. (2006) in his research paper has emphasized that the most widely used and an effective tool for performance appraisal as perceived by human resource professional is 360-degree competency assessment process. He studied the systems that aim to improve workforce performance. He opines that an appraisal system should have the full support of senior management. Hyde and
86 | P a g e Pethe (2005) opine that, in management, the current era is the era of Human Resource Development and Employee Involvement. There is a direct relationship between the concept of employee involvement and employee empowerment and organizational growth and development. Ramesh, T. (2005) studied the changes occurring in the field of human resource management in today‟s era. He observed that today‟s competitive business climate presents the HRM function with a number of important challenges and opportunities – dramatic advances in technology, in recruiting, selection, training, appraisals, rewards and other human resource practices. Singh, K. (2003) studied the effect of human resource management practices on the firm performance in India. He examined that the aim of the human resources in the organization context is to ensure the availability of competent, motivated and learning employees to the organization to facilitate the achievement of its business objectives. Dhawan, S. K. (2001) found in his study that job satisfaction varies with the type of job, level of organizational hierarchy, personality types etc. he examined five factors for job satisfaction i.e.
opportunity, learning & challenge, influence over superiors, work enjoyment & meaningfulness, satisfaction with work group and desirable future. Kassahun, T. (2005) As per his findings, there is a significant difference in perceptions of Indian employees towards the level of their commitment to their organization. Sanne G.A. et al (2005) their paper examined the effects of Human Resource Management (HRM) practices and antecedents (personal variables, job and role characteristics, and work experiences) on organizational commitment among Dutch university employees.
III. RESEARCH METHODOLOGY Objectives of the study
To study the HR practices prevalent in the units understudy.
To study the impact of HR Practices on Job Satisfaction and Organizational Commitment level of managerial employees of units under study.
The present study is confined to cover human resource practices of selected units in and around Chandigarh.
Study has been conducted at managerial level of employees to present comprehensive picture of human resource environment. Data is collected from 165 managerial level employees. Collected data was put to plan statistical analysis using SPSS package. The tools, which were employed to test the drafted hypothesis for analysis included: Analysis of Variance (ANOVA) and Correlation Analysis. The demographic factors such as qualification, gender, marital status, level of management, income and age, were taken into consideration.
Regarding Qualification, it was seen that 40.3% respondents were postgraduates i.e. they were well qualified in their respective specializations. 36.5% were graduates and 22.7% were Diploma holders. As far as Gender is concerned an over whelming 93% of managerial employees were male. A large number, i.e. 86% were married.
The managers are categorized in Top level, Middle level and Junior level Top level management comprises of Chief Executives, Senior Vice-Presidents, Vice-Presidents; Middle level includes Senior Managers, Chief Managers, Managers and Deputy Managers while Junior level includes Assistant Managers, Entry level Officers or Shift Officers. Annual income ranged from more than 5 lacs (14.2.%) to under 2 lacs (37%). A majority of respondents (52.6%) are in the 25-35 years age group and very few (2.4%) in the 55-65 years age group.
87 | P a g e HR PRACTICES
It was observed that the appropriateness of HR practices as perceived by the managerial employees holds an important place in the units under study. The study was conducted on fourteen HR Practices. To study the appropriateness of the HR Practices, an attempt was made to identify those HR Practices that are prevalent in these units. Overall, a positive overview was observed in case of these HR Practices, with the exception of Exit Policy and Career Planning. These fourteen practices were clubbed under five main factors by performing factor analysis of different statements of HR practices in the questionnaire. The five factors that were obtained from this factor analysis were Procurement and Development, Employee Benefits, Employee Schemes, Promotions and Transfers, and Exit Policy.
The units enables us to examine the impact of the appropriateness of HR practices as perceived by the managerial employees on their level of Job Satisfaction. To analyse the findings in a systematic manner, factor analysis was performed by calculating eigen values of Variance – Covariance matrix of the twenty statements of Job Satisfaction in the questionnaire. The twenty variables of Job Satisfaction were clubbed under five factors, namely, Team Working and Supportive Culture, Working Conditions, Quality of Work Life, Supervisory Style and Skill Enhancement using factor analysis. It may be concluded that the factors Supervisory Style and Skill Enhancement are important factors leading towards Job Satisfaction of the employees. However, Quality of Work Life and Working Conditions in the organizations are also integral factors that lead to Job Satisfaction.
The overall observation of the detailed analysis above is that F has highly satisfied employees. They have full confidence in their management and trust their organization for not favouring incompetent employees. They are satisfied with the various welfare activities provided by the organization and appreciate the way promotions are given to the employees. F believes in promotions as per the employees‟ qualifications, experience and merit.
This provides the employees with a high team spirit at work, good advancement and better prospects in their career. The analysis was done individually for the five factors i.e. Team Working and Supportive Culture, Working Conditions, Quality of Work Life, Supervisory Style and Skill Enhancement under study; and it was observed that all the five factors showed probability less than 0.05. It was also observed that this difference was not by sampling or chance.
The inference drawn from the pair wise multiple comparisons was that all the units under study showed different Job Satisfaction levels. The correlation between appropriateness of factors of HR practices as perceived by the managerial employees and the factors of Job Satisfaction was calculated to determine the linear relationship between them. The result showed a positive correlation between them. Multiple regression analysis was also performed to find out the relationship among various variables under appropriateness of the prevalent HR Practices and Job Satisfaction. It was observed that the factors of HR Practices having maximum impact on the level of Job Satisfaction among employees were Employee Schemes, Employee Benefits, Promotions and Transfers (in decreasing order). Therefore, a positive change in these factors can lead to higher Job Satisfaction.
The researcher concluded from the overall analysis that the HR practices positively impact the level of Job Satisfaction of the managerial employees at all the units under study.
To study the impact of perceived appropriateness of HR Practices on Organisational Commitment of the managerial employees, a scale developed by Allen & Meyer (1997) was used. The measures developed to
88 | P a g e describe Organisational Commitment of the employees were Affective, Normative and Continuance Commitment. It was drawn from the study that managerial employees of F had highest measure of Affective, Normative and Continuance Commitment. The correlation analysis between appropriateness of HR Practices and Organisational Commitment was performed to determine the degree of linear relationship between them as given in Table3. It was inferred that there is significant positive correlation between them, hence the researcher concluded that the HR Practices, if perceived appropriate, increase the level of Organisational Commitment of the managerial employees. The findings of Multiple Regression Analysis helped in finding the most potent predictors, their hierarchical order, individual positive and negative contributions and Multiple R. It was observed that Employee Schemes, Employee Benefits, Promotions & Transfers factors of HR Practices had an impact on Organisational Commitment. Thus, it is concluded that HR Practices positively impact Organisational Commitment of managerial employees at all units understudy.
IV. CONCLUSION AND RECOMMENDATIONS
Considering the HR Practice, Career Planning for employees in units, emphasis should be laid on occupational advancement, which is clear and easy to measure. A well-structured Career Planning system should be incorporated through HR Practices, which gives clarity of career progression to the employees in their organizations. The employees in these selected units should also be given motivation through rewards and recognition. Rewards could be monetary or non-monetary depending upon the performance of an employee and the company policy. But the good work and efforts of an employee must be recognized from time to time so that he is always charged up to perform better each time.
To meet the ever-growing challenges of these units, organizations must not overlook extra benefits for their employees. Employee Satisfaction and commitment can see a remarkable upward trend if extra benefits such as Loans for house building, Education assistance for children, Leave travel concession, Fair price shops, Recreational facilities, Loans for purchasing personal conveyance and host of other facilities like convenient &
affordable health and medical services and easy banking facilities are provided to employees. They must understand the importance of an employee who is leaving his job. Reasons behind his decision to quit must be acknowledged with full attention. For this the Exit Policy of the firm must be determined with full attention; the Exit Policy of the firm must be very clear and specific. Organizations can also provide welfare facilities either internally by means of a counselling service or externally through an agency which runs Employee Assistance Programmes (EAPs). These services can be availed of on contractual basis. They provide a 24 hour phone service giving employees and their families‟ access to counselling on a range of problems including stress, alcohol and drug abuse, marital breakdown, financial and legal problems. This can also help the employees in attaining a stress free and healthy mental peace that will lead them to efficient work-life balance.
To meet demand of the hour the existing 3-tier management system must be clearly defined in the organizations where employees at all levels should have high levels of Job Satisfaction. This can be achieved by undertaking measures such as Job Enrichment, Job Enlargement, Job Rotation and Job Analysis from time to time. Job Enrichment explicitly focuses on the task as a source of relief from monotony. It helps in defining specific ways
89 | P a g e to add complexity and meaningfulness to an employees work. Through Job Enlargement, the organisation can increase the number of tasks for their employees and combine them along with added responsibilities through Job Enrichment. The practice of moving employee form one job to another through Job Rotation also reduces job boredom and helps the organizations to develop a flexible workforce at all the levels of management. The overall analysis of the job can be thus done to see the levels of improvement and effectiveness in Job Satisfaction.
The HR Practices must emphasize on employee commitment as it is a two way process. Employees cannot be expected to be committed unless management demonstrates that it is committed to them. Therefore, a climate of trust by being honest to people, treating them fairly and helping in their skill development must be developed through a process of regular consultation and participation. The researcher strongly recommends that the Units should embrace a paradigm shift from performance appraisal to performance management systems. The
„appraising‟ element should give way to managing the entire performance of an individual within the department concerned. This means that the individual manager or employee will be involved right from the objective or goal setting stage through the process of defining of standards to the final evaluation of performance. This is a healthier approach, as full participation of the employee concerned is elicited at every step. The overall culture of the organisation improves with these interventions. It also promotes open communication and consequent growth of both the individual and the organisation. When employees have an active say in managing their overall performance, there is bound to be an increased sense of involvement and consequently stronger organisational commitment at all levels in the 3 tier management system.
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