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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The HR function can deliver immense value to

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Feature ArticleTRANSITION IN HUMAN RESOURCES FUNCTION IN PUBLIC SECTOR ENTERPRISES IN INDIA : RAMAN & SINGH