Human resource management in India: strategy, performance and complementarity

Abstract

This study seeks to explore which types of HR practice are associated with better organisational performance (OP). Whilst the core finding—that specific HR practices lead to better organisational outcomes may not be surprising—we also found an absence of complementarity. Normally, the absence of complementarities would suggest limitations in institutional supports; on the one hand, however, institutional shortfalls are not unique to India and may be encountered in many emerging market settings. In contrast, the great internal diversity of the Indian setting, with strong variations recognised amongst institutions, along with enforcement capabilities, might suggest that these tendencies are particularly pronounced. We also found a strong link between the intrinsic rewards and performance—an unexpected result in a low-income country, where wages are generally low. We suggest that this may reflect the nature of the labour market and the limited (and possibly proportionately shrinking) pool of good jobs, making exit a difficult option for all but the best qualified. Whilst this puts employees in a poor bargaining position in bidding-up pay (making pay rises seem unfeasible), the intrinsic attributes of the job become more important.