Tài liệu hạn chế xem trước, để xem đầy đủ mời bạn chọn Tải xuống
1
/ 37 trang
THÔNG TIN TÀI LIỆU
Thông tin cơ bản
Định dạng
Số trang
37
Dung lượng
534,28 KB
Nội dung
136 TRANSFORMATIVE ORGANIZATIONS Table 7.4: Innovative Trends in Compensation Practices in India (Study 2) Compensation Strategic Public Sector Undertakings 1 Private Corporate Sector 2 Private Corporate Sector Choice (Transformative/skills-driven) 3 Innovative Compensation and Rewards Systems (CRS) Trends Gaining Acceptance Internal Alignment l None l None l None External Competitiveness l Greater focus with l Greater focus with l Use of lead policy matching policy matching policy l Increased use of consultants for wage/benefits survey and compensation clubs Employee Contributions l Modest increase in l Increased use of training l Increased use of variable variable pay & development for core pay employees l Increased use of variable l Increased use of stock pay options l Innovative benefits l Extensive use of innovative (e.g., foreign assignments) benefits (e.g., gyms, quiz bowls, etc.) Proposed/Expected Innovations to Transform CRS to Create Superior Employment Relationships Internal Alignment l Along with job-based l Along with job-based l Use of skill-based pay pay system, also focus pay system, also focus on firm-specific skills on firm-specific skills External Competitiveness l Wage/benefits survey l Wage/benefits survey l Hybrid policy l Match or lead policy l Match or lead policy (Contd.) INNOVATIVE COMPENSATION PRACTICES FOR ORGANIZATIONS IN INDIA 137 Table 7.4: (Contd.) Compensation Strategic Public Sector Undertakings 1 Private Corporate Sector 2 Private Corporate Sector Choice (Transformative/skills-driven) 3 Employee Contributions l More focus on performance l Extensive use of innovative l Increased use of team-based and accountability bonus & benefits (e.g., gyms, bonuses & innovative quiz-bowls) benefits l Increase in the variable l Increased use of stock l Pay policies embedded with pay component options other HR & organizational processes Administration l Openness l Open, decentralized system l Open, decentralized system Intended Impact on Employment Relationships Contract Type l Unbalanced (overinvestment) l Unbalanced (overinvestment/ l Use mutual investment to balanced underinvestment) to balanced contracts l Toward mutual investment l Toward mutual investment contract contract Notes: 1 Adapted from Sethi, Balaji, and Shrimali (1995). 2 Based on the results of current study. 3 Adapted from Patil (1997), current study, and Infosys website. 138 TRANSFORMATIVE ORGANIZATIONS literature suggests that even organizations competing in traditional industries would benefit by building firm-specific human capital (Bloom and Milkovich, 1999; Heneman et al., 2000). Thus, one innovative practice that Indian organizations, particularly those competing in knowledge-intensive sectors, should consider is skill-based pay. Table 7.4 lists several additional innovative compensation practices that different types of Indian organizations should consider in order to create superior employment relationships. For example, with regard to external competitiveness policy, it is proposed that organizations adopt a hybrid pay policy to accom- modate differential strategic goals for critical and non-critical human resources. Moreover, there should be increased focus on getting reliable information about effects of external labor market. The proposed innovative compensation practices with regard to employee contributions policy include increased use of variable pay, creative use of bonuses in conjunction with skill-based pay plans, and development of firm-specific skills. Finally, Indian organizations should consider making compensation and rewards systems more open and decentralized. The adoption of the proposed innovative compensation practices is predicated to help build dynamic capabilities and superior mutually interdependent employ- ment relationships. National Culture and Innovative Compensation Practices Scholars assert that compensation and rewards systems should also be aligned with local context (Hofstede, 1984). National culture is an important contextual factor that can influence adoption of innovative compensation and rewards systems. Recent work by GLOBE (Gupta et al., 2002) points to the value of paying attention to the local culture. Table 7.5 provides comparative information on cultural profiles for three countries: the US, Japan, and India. The cultural profile offers two sets of cultural values. The first set is based on as is descriptor and implies current cultural practices. The second set is based on should be descriptor and implies cultural values (see Gupta et al., 2002, for details on definitions of cultural dimensions). A closer look at the cultural practices suggests that the Indian cultural profile is similar to the Japanese cultural profile. India, like Japan, is a hierarchical, collectivist, and masculine society. However, it also resembles the US in terms of uncertainty orientation. How should compensation and rewards systems be aligned with Indian culture? Like Japan, Indian organizations have frequently used seniority-based promotions and rewards. The use of seniority system implies that Indian organizations value person-based attributes. In fact, most Indians believe that age is associated with wisdom. Unfortunately, unlike Japanese organizations, Indian organizations do not assess enhancement of skills alleged to be associated with seniority. Indian organizations should evaluate the Japanese compensation and rewards systems to help change their seniority-based promotions and rewards to skills-based INNOVATIVE COMPENSATION PRACTICES FOR ORGANIZATIONS IN INDIA 139 promotions and rewards (Milkovich and Newman, 2002). Another similarity between India and Japan is with regard to collectivism. Since skill-based pay plans are often embedded in a team culture, this aspect of Indian culture should favor its use. Finally, since the Indian cultural profile is similar to the US cultural profile in uncertainty-orientation, Indian organizations should continue to focus on the use of variable pay. One note of caution is in order here. While it is useful to align compensation and rewards systems with the national cultural profile, the emerging evidence suggests that organizational and institutional factors play a far more dominant role in the design and delivery of compensation and rewards systems than the national culture does (Bloom, Milkovich, and Mitra, 2000). Discussion and Conclusions Compensation practices in India are evolving to become more strategic. Many Indian organizations are experimenting with innovative compensation practices. Indian organizations have enhanced their focus on performance and account- ability. Total remuneration in these organizations now includes a larger component of variable pay. In several interviews, managers indicated a desire to creatively use benefits. Often the underlying principles reflected a desire to be Table 7.5: Country Means for GLOBE Societal Cultural Dimensions US Japan India Practice (as is) Uncertainty Avoidance 4.15 4.07 4.15 Future Orientation 4.15 4.29 4.19 Power Distance 4.88 5.11 5.47 Institutional Collectivism 4.20 5.19 4.38 Humane Orientation 4.17 4.30 4.57 Performance Orientation 4.49 4.22 4.25 Family & Group Collectivism 4.25 4.63 5.92 Gender Egalitarianism 3.34 3.19 2.90 Assertiveness 4.55 3.59 3.73 Values (should be) Uncertainty Avoidance 4.00 4.33 4.73 Future Orientation 5.31 5.25 5.60 Power Distance 2.85 2.86 2.64 Institutional Collectivism 4.17 3.99 4.71 Humane Orientation 5.53 5.41 5.28 Performance Orientation 6.14 5.17 6.05 Family and Group Collectivism 5.77 5.26 5.32 Gender Egalitarianism 5.06 4.33 4.51 Assertiveness 4.32 5.56 4.76 Source: Gupta et al. (2002) and V. Gupta (Personal Communication, January 17, 2002). 140 TRANSFORMATIVE ORGANIZATIONS flexible, open-minded, employee-oriented. These managers wished to build personal assets for their employees. Current evidence also suggests that many well-known global Indian companies, particularly in information technology (IT) industry, now employ broad-based stock options. During one interview, a high-ranking executive indicated that even though his firm did not have a publicly traded stock, his company would tie yearly bonuses to a publicly traded broad- index for IT industry. These innovative approaches attest to the strategic orientation of Indian organizations to transform resources and develop quality human capital. However, current evidence points to a lack of attention toward the use of skill-based pay plans. Many scholars have recently touted the value of rewarding excellence and using skill-based pay plans (Heneman et al., 2000; Lawler, 2000). These scholars emphasize that skill-based pay plans are particularly suitable for transformative organizations competing in knowledge-based service sectors. Indian organizations, therefore, should take a closer look at the use of skill-based pay plans. Finally, based on the information on cultural profiles of India and Japan, it is expected that skill-based pay plans should be congruent with Indian culture. In conclusion, compensation and rewards systems have always played a crucial role in helping an organization achieve its strategic objectives. The global economic milieu is undergoing a metamorphosis. The current global economic circumstances have forced organizations to continuously transform their strategic assets. Innovative compensation and rewards systems, such as skill-based-pay plans, should play a more critical role in helping modern organizations to successfully transform their strategic assets. References Amit, R. & P.J.H. Schoemaker (1993). Strategic assets and organizational rent. Strategic Management Journal, 14, 3344. Bajpai, N. & J.D. Sachs (1998). Strengthening Indian strategy for economic growth. Development Discussion Paper No. 641, Harvard Institute for International Development, Harvard University. (2000). Foreign direct investment in India: Issues and problems. Development Discussion Paper No. 759, Harvard Institute for International Development, Harvard University. Bajpai, N. & V. Shastri (1998). Software Industry in India: A Case Study. Development Discussion Paper No. 667. Harvard Institute for International Development, Harvard University. Bajpai, N. & N. Radjou (1999). Raising the Global Competitiveness of Tamil Nadus Information Technology Industry. Development Discussion Paper No. 728, Harvard Institute for International Development, Harvard University. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99120. INNOVATIVE COMPENSATION PRACTICES FOR ORGANIZATIONS IN INDIA 141 Bhattacherjee, D. (1999). Organized labour and economic liberalization in India: Past, present and future. Discussion papers. International Labor Organization. Bloom, M. & G.T. Milkovich (1999). A SHRM perspectives on international compensation and reward systems. In P.M. Wright, L.D. Dyer, J.W. Boudreau, and G.T. Milkovich (eds.), Research in Personnel and Human Resource ManagementStrategic Human Resource Management in the Twenty First Century (Supplement 4, pp. 283303). Greenwich, CT: JAI Press. Bloom, M., G.T. Milkovich & A. Mitra (2000). Toward a model of international compensation and rewards: Learning from how managers respond to variations in local host context. Working Paper Series (# 00(14), CAHRS, Cornell University. The Center for the Advanced Study of India (1997). Doing Business in India. (http://www.sas.upenn.edu/casi/) Child, J. & R.G. McGrath (2001). Organizational unfettered: Organizational form in an information intensive economy. Academy of Management Journal, 44, 11351148. Compilation of Fifth Central Pay Commission Report, Volume I (1997). New Delhi, India: Nabhi Publication. Conner, K.R. & C.K. Prahalad (1996). A resource-based theory of the firm: Knowledge versus opportunism. Organizational Science, 7, 477501. Eisenhardt, K.M. & J. Martin (2000). Dynamic capabilities: What are they?. Strategic Management Journal, 21, 11051121. Galunic, D.C. & K.M. Eisenhardt (2001). Architectural innovation and modular corporate forms. Academy of Management Journal, 44, 12291249. Gerhart, B. & G.T. Milkovich (1992). Employee compensation: Research and practice. In M.D. Dunnette and L.M. Hough (eds.), Handbook of Industrial and Organizational Psychology (2nd ed) (Vol. 3, pp. 481570). Palo Alto: Consulting Psychologists Press, Inc. Gerhart, B., C.O. Trevor & M.E. Graham (1996). New directions in compen- sation research: Synergies, risk, and survival. In G.R. Ferris & K. Rowland (eds.), Research in Personnel and Human Resources Management (Vol. 14, pp. 143203). Greenwich, CT: JAI press. Gomez-Mejia, L.R. & D.B. Balkin (1992). Compensation, organizational strategy, and firm performance. Cincinnati, OH: South-Western. Gupta, N. (1997). Rewarding skills and competencies in the public sector. In H. Risher and C. Fay (eds.), Rewarding public employees: A handbook for rethinking government pay programs (pp. 125144). San Francisco: Jossey- Bass. Gupta, N., & G.D. Jenkins, Jr. (1991). Practical problems in using job evaluation systems to determine compensation. Human Resource Management Review, 1: 133144. Gupta, N. & J.D. Shaw (in press). Successful skill-based pay plans. In C. Fay (ed.), The executive handbook of compensation. New York: Free Press. Gupta, N., G.D. Jenkins, Jr. & W.P. Curington (1986). Paying for knowledge: Myths and realities. National Productivity Review, 5: 107124. 142 TRANSFORMATIVE ORGANIZATIONS Gupta, N., G.E. Ledford, Jr., G.D. Jenkins, Jr. & D.H. Doty (1992). Survey- based prescriptions for skill-based pay. ACA Journal, 1(1): 4859. Gupta, N., T.P. Schweizer & G.D. Jenkins, Jr. (1987). Pay-for-knowledge compensation systems: Hypotheses and survey results. Monthly Labor Review, 110(10): 4043. Gupta, V., G. Surie, M. Javidan, J. Chhokar & Colleagues (2002). Southern Asia cluster: Where the old meets the new. Journal of World Business, 37(1): 1627. Heneman, R.L., G.E. Ledford, Jr. & M.T. Gresham (2000). The changing nature of work and its effect on compensation design and delivery. In Sara L. Rynes and Barry Gerhart (eds.), Compensation in organizations: Current research and practice (pp. 195240). San Francisco: Jossey-Bass. Hofstede, G. (1984). Cultures consequences: International differences in work-related values. Beverly Hills, CA: Sage. Johri, L.M. (1997). The strategic transformation of medium-sized Indian company. Knowledge and Process Management, 4, 236246. Kapur, D. & R. Ramamurti (2001). Indias emerging competitive advantage in services. The Academy of Management Executive, 15, 2031. Lawler, E.E., III. (1987). The strategic design of reward systems. In R.M. Steers and L.M. Porter (eds.), Motivation and Work Behaviors (4th ed.), New York: McGraw-Hill. (2000). Rewarding Excellence: Pay Strategies for the New Economy. San Francisco: Jossey-Bass. Lawler, E.E., III & G.D. Jenkins, Jr. (1992). Strategic reward systems. In M.D. Dunnette and L.M. Hough (eds.), Handbook of Industrial and Organizational Psychology (2nd ed.) (Vol. 3, pp. 10091055). Palo Alto: Consulting Psychologists Press, Inc. Mendonca, M. & R.N. Kanungo (1994). Motivation through effective reward management in developing countries. In R.N. Kanungo and M. Mendonca (eds.), Work Motivation: Models for Developing Countries (pp. 4983). New Delhi, India: Sage. Miles, R.E. (1989). Adapting to technology and competition: A new industrial relations system for the 21st century. California Management Review, 31, 928. Milkovich, G.T. & M. Bloom (1998). Rethinking international compensation. Compensation and Benefits Review, 30(1), 1523. Milkovich, G.T. & J.M. Newman (2002). Compensation. Boston, MA: McGraw- Hill. Mitra, A. & N. Gupta (1999). A comparative examination of traditional and non-traditional compensation systems. (Presented at the 59th annual convention of the Academy of Management, Chicago). Moitra, D. (2001). Executive commentary. The Academy of Management Executive, 15, 3233. Murray, B. & B. Gerhart (1998). An empirical analysis of a skill-based pay program and plant performance outcomes. Academy of Management Journal, 41, 6878. INNOVATIVE COMPENSATION PRACTICES FOR ORGANIZATIONS IN INDIA 143 Newman, K.L. (2000). Organizational transformation during institutional upheaval. Academy of Management Review, 25, 602619. Ninth Five Year PlanGovernment of India (http://www.nic.in/ninthplan/) Parent, K.J. & C.L. Weber (1994). Case study: Does paying for knowledge pay off?. Compensation and Benefits Review, 26, 4450. Patil, B.R. (1997). Human Resources Management in Information Technology industry: A survey. In C.S. Venkataratnam and Anil Verma (eds.), Challenges of Change: Industrial Relations in Indian Industry (pp. 363389). New Delhi: Allied Publishers Limited. Ramamurti, R. (2001). Finance Minister Yashwant Sinha on Indias changing role in the world economy. The Academy of Management Executive, 15, 812. Rohwer, J. (1995). Asia rising: Why America will prosper as Asias economies boom. New York: Simon & Schuster. Sethi, K.C., G. Balaji & C.P. Shrimali (1995). Private sector: Remuneration structure. A study conducted for the Fifth Pay Commission (India). Shah, S. (2000). India: Caste, commitments, and change. In Denise M. Rousseau and Rene Schalk (eds.), Psychological Contracts in Employment: Cross-national Perspectives (pp. 104124). Thousand Oaks, CA: Sage Publications, Inc. Sinha, J.B.P. (1994). Cultural embeddedness and the developmental role of Industrial Organizations in India. In H.C. Triandis, M.D. Dunnette, and L.M. Hough (eds.), Handbook of Industrial and Organizational Psychology (pp. 727764). Palo Alto, CA: Consulting Psychologists Press. Snell, S.A., M.A.Youndt & P.A. Wright (1996). Establishing a framework for research in strategic human resource management: Merging resource theory and organizational learning. In G.R. Ferris (ed.), Research in Personnel and Human Resource Management (pp. 6190). Greenwich, CT: JAI Press. Teece, D.J., G. Pisano & A. Shuen (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18, 509533. The World Bank Report (2000). India: Policies to Reduce Poverty and Accelerate Sustainable Development. Washington D.C. (http://wbln1018.world- bank.org/). Thompson, J. (1967). Organizations in Action: Social Science Bases of Administra- tive Theory. New York: McGraw-Hill. Tosi, H. & L. Tosi (1986). What managers need to know about knowledge- based pay. Organizational Dynamics, 14, 5264. Tsui, A.S., J.L. Pearce, L.W. Porter & A.M. Tripoli (1997). Alternative approaches to the employee-organization relationship: Does investment in employees pay-off?. Academy of Management Journal, 40, 10891121. Volberda, H.W. (1998). Building the Flexible Firm. Oxford, England: Oxford University Press. Vroom, V. (1964). Work and Motivation. New York: Wiley. Welch, J. (2000). GE research lab in Bangalore will be our largest soon. The Financial Express, September 17, (www.financialexpress.com/fe/daily/ 20000917/feo17037.html). Wright, P.M., G.C. McMahan & A. McWilliams (1994). Human resources and sustained competitive advantage: A resource-based perspective. International Journal of Human Resource Management, 5, 301326. [...]... consumers may buy the brand more out of their symbolic needs and over a period of time may even allow the brand to condition their physiological gratification because of the domination of symbolic appeal and the lack of a standardized functional tangible benefit Coke, Pepsi and Thums Up are brands which have made use of symbolic imagery to build brands in the cola category of soft drinks A youth aspiring to... their measurement Nevertheless, the seeming irrelevance of the concept to an analysis of this group of 156 TRANSFORMATIVE ORGANIZATIONS prosperous Indian firms is still something of a surprise The jump straight in approach may be surprising, but the absence of any stages at a higher level is less so Fig 8.3: Theoretical versus Actual Approach of Internationalizing Indian SSIs Creating a sales subsidiary... transformation of a product into a leading brand is a function of three major factors: (a) level of involvement, (b) dimensions of branding, and (c) level of product concept According to the involvement theory, most situations can be distinguished as high or low involvement (Loudon and Della-Bitta, 1988) A high involvement situation requires a high level of information search and a detailed evaluation of alternatives...146 TRANSFORMATIVE ORGANIZATIONS end customer or an intermediate buyer; licensing a foreign distributor, or using a mixture of these approaches Research Context The primary objective of this chapter is to highlight the process of change during internationalization, using the stages models of internationalization in the context of small firms from Aligarh In addition, the relevance of the network... 80 per cent of industrial employment, 35 per cent of the value-added by the manufacturing sector and 35 per cent of total exports (Confederation of Indian Industry, 2000) Within the sub-continental context, the SSIs not only provide gross employment opportunities, but also contribute to the establishment of a broad and dispersed industrial base, leading to a more equitable distribution of national... firms. DYNAMICS OF EXPORT MARKET ENTRY AND BEHAVIOR The majority of small firm owners look to foreign markets as a growth opportunity creating more profit for their business But a critical factor in the ability to carry through their chosen international activities is the possession of appropriate knowledge: this includes knowledge about foreign markets, techniques of foreign operation, ways of doing business,... business, key people in buyers organizations, and so on Much of this is not easily acquired off the shelf; it is developed through the actual experience of foreign operations All respondents were asked about the factors they thought were key to the success of their company The majority of them said family resources and social INTERNATIONALIZATION OF SMALL SCALE ENTERPRISE NETWORKS 157 contacts were their... achievement of their goal of growth and survival in existing markets The research results fail to support fully the argument that firms move through a series of stages, at least in terms of entry mode and the assumption of the stages models that firms (should) first establish themselves in their domestic market before going into foreign ones However, the research shows mixed results concerning stages of internationalization... attempt to address the issue of internationalization in the context of a developing country Strong doubts must exist about the appropriateness of the dominant stages theory in this context, although there are reservations about the appropriateness of these models to SME internationalization generally, so these greater reservations may be only matters of degree rather than of kind Network perspectives... and transformative process It would, therefore, appear sensible to approach research in the area in a similar way Thus, by integrating multiple methods of data collection and analysis, the pool of knowledge would continue to expand across sectors and cultures over time Making better use of the extant literature in an integrative manner, which would allow further knowledge development in the area of . 4 .38 Humane Orientation 4.17 4 .30 4.57 Performance Orientation 4.49 4.22 4.25 Family & Group Collectivism 4.25 4. 63 5.92 Gender Egalitarianism 3. 34 3. 19 2.90 Assertiveness 4.55 3. 59 3. 73 Values. to successfully transform their strategic assets. References Amit, R. & P.J.H. Schoemaker (19 93) . Strategic assets and organizational rent. Strategic Management Journal, 14, 33 44. Bajpai, N. &. of the Academy of Management, Chicago). Moitra, D. (2001). Executive commentary. The Academy of Management Executive, 15, 32 33 . Murray, B. & B. Gerhart (1998). An empirical analysis of