Column: Indian School of Management In Practice -- "The HR Practices"

Sunday, July 24 2016, 10:32 AM
Is there an 'Indian' School of Management? Are there unique ideas, though-processes, skills that have the potential to impact the world? Management author and thinker Sandeep Singh believes so.

In this third installment of the column on -- 'Indian School of Management - in Practice' by Sandeep Singh, the author traces the cutting-edge HR practices of Indian businesses.  


HR Practices: Evolving or Just New Terminology

To tide over the shortage of employees, certain corporate offered incentive to their employees for referring and convincing their friends to come and join them in their current organization. Some also offer incentive to husband and wife if they work in the same organization.  

Most corporate have fixed set of institutes where they go back year after year for recruiting new talent. Some corporate have tied-up with colleges and designing course curriculum as per there requirement. It helps them to prepare the students in the institute itself for the concerned opening that they have.  

All these are considered as breakthrough idea in HR. While the same when practiced by Indian business; doesn't gets charitable remarks.

Medha M Kudaisya writes in 'The Life and Times of G D Birla": "Complete loyalty was expected from senior employees. They were considered to be a part of the extended joint family. Senior employees' inevitability came from the Marwari community preferably from the Maheshwari subcaste. Many of them also had a Pillani connection and had spent long years with the business. They were often indebted for help rendered in personal affairs. A prime example was Durga Prasad Mandelia – called Chachoji by the younger generation. He had started his career with Birla at the age of 14 and had risen to become a key associate. The new generations was similarly encouraged to select a team of their own and were encouraged to recruit sons of senior employees. This ensured stability and loyalty which was sometimes rewarded by giving away agency and distribution rights. Thus from within the community satellite groups were created which strengthed the business network, provided managerial talent and enhanced trust." –  

And if a young man appeared capable of setting up his own business, he would suggest products and even offer financial support. With vendors few and far between, what better supplier could there be than the son of an executive?  

Shrikrishnadas Jaju writes in his biography "G D Birla had an unusual way of accessing managers. In the opinion of a manger, 'The cost of a manager was not what he drew by way of salary and perquisites but the estimated loss his inadequacy had caused to the company's profitability. Loss of profit was as bad as actual loss.'  

But he accepted mistakes as long as the manager admitted his error and took care not to repeat it. 'In 1930 when he was neither famous nor so rich, he silently bore the loss of Rs.75 Lakhs caused by Bhagirath Kanoria in a Hessian deal. This brought Birla Brothers to the brink of disaster but G D Birla's attachment to Kanoria remained unaffected.'  

G D Birla put any number of chief executives on the shelf where they merely signed cheques and share scrips. Carrying loyal deadwood was expensive but G D Birla, tight fisted in so many respects, never grumbled at this expense. (Business Legends, Gita Piramal)

There are various examples like this in Indian Business History viz: In Bengal the salt merchants managed their business through 'Gomastas'. A 'Gomasta' would serve the family for generations. 'Gomasta' has been defined as a 'paid manager of the private trader's concern' and they had 'hardly any share in the profit and loss of his employer's businesses'. Although some "Gomasta's" traded on their own account. 'Gomasta' resided on the up-country market spot and gather information and send them to their masters. 'Gomastas' profound knowledge about a particular area and their negotiating ability with the local smaller merchant was indispensable for a firm. 'Gomastas' were not always from the same cast or community of the merchant.

No wonder when Sumant Moolgaokar thought of "Growth from within", as a principle, and there was spur in many ancillary firms in and around Chinchwad in Pune by first time entrepreneurs. He, in fact, actually encouraged employees to leave Telco employment and strike out on their own and as they say rest is history. It is not surprising to find 5th or 6th   generation work for TATA's.  

Corporate world from last few years has been abuzz with the sentences like;
  • "People are our most important asset",
  •  "We are a knowledge based company",
  • "All we have is our people" etc. etc.  

Slowly west is realizing human resource has to relay on the development of heart and soul. It should be human; 'human resource by soul', 'human resource by consciousnesses'. West has always amplified on 'management by objectives', 'management by results' and 'management by performance'. But the hub of all this is man – he should be developed; his soul must be enriched and activated.  

 India has seen always in man the individual a soul, a portion of the divinity enwrapped in mind and body. Man is an integrated creation of the Divine Craftsman.

This weekly column 'Indian School of Management - in Practice' is authored by management thinker Sandeep Singh. The column aims to explores the 'elements' of business as practiced by Indian entrepreneurs spread across industry in India and put them in points, grids, matrix, charts etc. so that they can be taught at management institutes and be of practical use in day to day working life of practicing managers.     

Sandeep Singh is the author of bestseller "Business of Freedom – an Initiative for School of Indian Management". He also runs Swadeshi School for Training in Indian Knowledge (SWASTIK). Readers can reach him at [email protected]