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Article Summary: Innovative HRM and Corporate Performance

Article Summary on, "Innovative human resource management and corporate performance in the context of economic liberalization in India" written by “Ashok Sam”. The objective of this summary is to explain whether any changes took placed post liberalization in India and what are those if any? How HRM is perceived by the organization and its scope in the present situation? A study has been conducted in various organizations irrespective of size of the company to find out various practices which has been implemented and given weight in the decision making.

Liberalization has opened a new opportunity for the business, which further drove the foreign players to enter the Indian market which has further forced the local players to go through an superior completion and this made a challenge for all the companies to change its working process an brought an change in transition employee profile, the demography, de-skilling, re-skilling, and multi-skilling and various issues related to work-force reduction. So the Indian firms are focusing on Innovative recruitment and compensation practices to improve their firm performance.

From the current research it was found that, Indian organization has adopted various innovative changes in their HRM practices and there is a relation between HRM practices and corporate performance.   It was further found that a strong and positive link between these practices and Organization performance which includes work attachment, firm financial performance and productivity of the employee. Practices like selective staffing, incentive compensation, and training, along with HRM recruitment policies, promotion, benefits, employee health and safety were positively related with the performance of the company.

The role of HR department was generally seen ensuring in attract, retain, motivate and develop human resources according to current and future requirements. Recruitment process has taken a new road by implementing innovative practices.

·        More informal methods like recruiting managerial staff by advertising internally and from current employees.
·        Selection of Top level employees based on social contacts.

HRM is considered not just a program; it is about building employee-employer relationship. Few major other practices adopted are:

·        Persons recruited for supervisory and managerial levels are those with professional training and qualification like an MBA.
·        Formal Induction, orientation and familiarization process designed to help the new managerial recruits understand the organization.
·        Coaching by boss/line manager helps a lot in increasing skills in the organization.
·        People management skills are important in performance appraisal.
·        The rewards received are directly related to the performance and contribution at work.

Liberalization has forced the organization to make a lot of changed in its practices, to accept the new practices and innovate more accordingly to the company’s culture.  Few innovative practices followed because of liberalization would be:
·        Benchmarking with global excellent practices.
·        De-regulated hyper-competitive environment.
·        Retaining key talent has been one of the important resources for competitive advantage for firms.

Further Innovative practices like Flexible hours, competency based payment schemes, and clear remuneration policies to attract and retail talent is being used. A transition has been taken placed from seniority based to performance based pay, and linking the appraisal with the productivity of the employee.

One of the major changes adopted by the companies is Empowerment of employees, which has changed the organization structure that encourages employee participation and allows them to improve and redesign how their job has to be performed.

A HRM practice has helped in strategic decisions for return in assets, growth on sales and growth in stock values. The new well integrated practice and casual model is linked with the HRM.

It can be concluded that the transition took placed for a good note, and further the workers of the organization are not treated as just a cost; rather, as it has a resource based perspective. The people and HRM are emerging as a critical success factor for attaining a competitive advantage for firms.  More on, the role of HR department has not just limited to design and evaluate employee management policy but in changing the whole business environment in India. 


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