Human Resources Strategies and Practices of Reliance Industries Limited - Case Study Example

INTRODUCTION In this assignment, the group is required to select an organization and critically evaluate its HR strategies and practices. Based on our understanding of the module and findings on the organization, our group will produce an analysis of the following: 1)the organization’s HR strategies and policies; and 2) its role in supporting the organization’s goals . Additionally, from our analysis, we would present the result of our audit and make recommendations about possible improvements in HR. It is said that the origin of Human Resource Management (HRM) can be traced from welfare capitalists of the United State during the 1930s. Although the HRM structure was presented to the American business system way back then, it was only until the 80s that it was recognized by the academe and practitioners (Beardwell and Claydon,2007,page 6). Likewise, Beardwell and Claydon (2007) also asserted that the development of HRM is due to major reasons such as productivity challenge and the desire of government for more employer-oriented employment policies. In addition, it is necessary to differentiate HRM from Personnel Management in which one of the main differences is the role of managers and line managers. Even though there is no universal definition of the term HRM, Human Resource Management can be referred to as “people management activities in the broadest sense or in the specific meanings of high-commitment management, or a strategic approach to people management” (Beardwell and Claydon, 2007, page 28). The nature of HRM is based on various factors: sociology, economics, politics, anthropology, technology and psychology; however, it can also be referred to as PEST. The context of HRM is not only within the organizational setting (local business unit, regional, national, or global), but also the complex social system which includes various elements such as people, structure, management, goals, and interests. Moreover, Human Resource Management is often divided into ‘soft HRM’ and ‘hard HRM’. Furthermore, there are several strategic roles for HRM including supporting the business strategies, assisting the organization to create and maintain their competitive edge, working as profit centre and economize its operations and adding value to the organization. HRM is crucial in the over-all organizations since it is correlated with “gaining commitment and linked this to outcomes of enhanced organizational performance and business effectiveness” (Beer et al., 1984; Guest, 1987; Guest et al., 2000a; Wood and De Menezes, 1998). It must also be noted that there is a concept developed from the traditional human resource management called strategic human resource management, which is more focused on horizontal integration. On the contrary, while the vertical integration mentions the relation between the organization’s strategy and HRM activities, the horizontal integration refers to the relation between HR functions itself (Willy Mc Court & Derek Eldridge ,2003, page 29). There are five major models of HRM: 1. The Michigan model of HRM (Tichy, Fombrun & Devanna (1982), Fombrun, Tichy & Devanna (1984)) 2. The Harvard model (Beer, Spector, Lawrence, Quin Mills & Walton (1984)) 3. Guest’s (1987) Model of HRM 4. The Warwick Model of HRM (Hendry and Pettigrew (1990) 5. Storey’s (1992) Model of HRM These models explain the functions of HRM relatively different in some aspects; however; they all include four key functions, which are resourcing, human resource development, reward and performance management, and employment relationship. Company Background After several meetings, our group decided to choose Reliance Industries Limited as the organization to evaluate. The company was founded in India in 1958 by Mr. Dhirubha Ambani starting its revolution with textiles industry in the late seventies. The company then expanded into polyester, retail market, telecommunication, the petrochemical, and refining of crude oil. Reliance group is the largest producer of Polyester Fibre and Yarn, the 4th largest producer of Polypropylene and Paraxylene, the 6th largest producer of Purified Terephthalic Acid and the 7th largest producer of Mono Ethylene Glycol. After around three decades the company has grown into the largest private sector company in India and has become a Fortune 500 company (264th in term of sales and 117th in term of profit). Their group’s annual revenues are in exceeding US$ 28 billion which is nearly 3% of Indian GDP. Additionally, the group received many national and international awards in term of leadership, health, safety and environment, training and development, quality, energy conservation/efficiency, technology, patents, R&D and innovation, innovation technology, corporate social responsibility, and sustainability report. Most of its success is thanked to its founder, Mr Dhirubha Ambani. He recognized the strategic significant of investors and discovered the vast untapped potential of the capital markets and leading Reliance Group in an investor base strategy with around 3.5 million of shareholders in 2009. It is also expressed in his quote “Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth.” The strategy provides Reliance the source of fund whenever it is needed for development and expansion. Moreover, the backward vertical integration also played an important part in its evolution and growth. The strategy protects the group from the exposure to the cyclicality of markets and raw material prices. Mr. Ambani is also being recognized worldwide and received several awards for himself such as the lifetime achievement award from the economic times and Indian Entrepreneur of the 20th Century Award by the FICCI. However, after Mr. Ambani passed away, the group split up in 2006 because of the problems between the two brothers, Mukesh and Anil Ambani. Mukesh remains the head of the company and continues with their industries in petroleum, petrochemical and textiles operations. His younger brother Anil regrouped the company’s telecommunications, energy, capital finance and other operations into a new company. Even after splitting up, Reliance Group continues to grow with the number of employees up to 50,000. The Board of Directors now includes Mr. Shri Mukesh Ambani as chairman and managing director together with 13 other members and the group has 7 committees in Audit, Remuneration, Shareholders’/Investors’ grievance, finance, health and safety and environment, corporate governance and stakeholder’s interface and employees stock compensation. Reliance Group also provides six commitments to care about: quality, research & development, health, safety and environment, human resource development, energy conservation and corporate citizenship. HR Strategy in Reliance Reliance has developed strategies for future business development in all areas of the group through the development of many talents in the organization and gives them training at a high level of efficiency where there is a dedicated team in the management of human resources to follow up on many of the younger generation and training to service and support organization in the future. Of the most important strategies, Reliance Group is the skill and continuous training as these two things help the organization to remain at the top and be competitive in the market as well as staff development in every sector of the organization. Reliance has attracted many experts, training specialists in science and the best financial and accounting who have the ability to solve difficult problems and to assist in organizing their business. Founder of Reliance Group reported that our future strategies of the organization in the development of all sectors of the company and the establishment of large enterprises and this is by attracting trained personnel. The Reliance Group’s strategy is to expand strategic partnership with several companies in different areas where the group has partnership in the financial sector, manufacturing, telecommunications, insurance is always seeking partnership through the selection of the best companies in the domestic markets and globally. The benefits of expansion strategies in the Reliance Group is that the group's profit tripled within a few years and this has also led to recruitment of many young cadres as well as the taxonomy of the group increased to a high level among competition companies. Employee relationship: In reliance, life is challenging. It is offering access to the resources of the world for professional and personal growth. At Reliance, not will you have the opportunity to challenge the difficult responsibilities, but you will also have a chance to work with the quality top employees from foreign countries. You can be part of an excellent culture. You will not just be working for earning money or living, but you will also be part of an international team that is interested in making difference in the daily lives of the employees. Human resource is one of the important things of Reliance growth strategy. Reliance is a young company, and its talents come from diverse professional and academic backgrounds. The strategy growth the opportunities and competitive reward packages presented by Reliance are able to attract and retain a good talent pool. Reliance targets the global markets for talent, offers worldwide perspectives. Furthermore, Reliance endeavors to make a place of work where everyone can reach her or his full potential. Human Resource Values and Beliefs (RIL) RIL considers its employees as their main source of strength and pride. An employee’s professional progression and development is fundamental to the working structure of RIL and its competitive long-run sustainability in the market. Beliefs RIL aims that employees training and development should not be just task specific, but also enables employees to enhance their existing knowledge and abilities, and also expand and broaden their working horizons. Sustenance of long term individual growth and development is the responsibility of not only the higher ranking individuals, but the employees play an equally important role. RIL’s growth and success is mainly driven by the constant development of employee expertise, capacity, and capabilities. Recruitment Recruitment means bringing people in the organization. It’s about looking for suitable kind of designation for appropriate and qualified candidates, and doing it for the right time, who fulfills the organization’s needs and requirements with their skills, qualities and experiences. It’s like drawing people’s attention towards the specific place in an organization by attracting them through different ways. Recruitment is a very important process for achieving organizational efficiency. Employees are the ones who are implementing organizational plans and strategies as such identifying the job profile. Finding out the most suitable candidates is of great strategic important from strategic point of view, thus providing them the with good job profiles and exciting career opportunities. Reliance Recruitment Policies The organization follows some basic strategies for recruiting people in the organization: Firstly, they follow internal recruitment session by targeting existing employees and taking their references to acquire new staff. So, in this process the employees feel more valued in the organization as their opinions are being considered. It would also be the good way to develop the employee-employer relationship. This prevents the company’s recruitment costs from increasing because the references given would be from the employees who are aware of the working environment of the company. Secondly, RIL also has professional tie-up with various consultancies like monster.com, timesjobs.com, naukri.com, and shine.com. They work in collaboration with these companies. RIL provides these consultancies with exact job profiles and the day-to-day requirements of the job and the type of personnel they want. These agencies then use their databases and then analyze it, configure it to match the job-profile with the best available options which can be further scrutinized during the selection process. These professional consultancies are paid up by the companies itself to work for them. Third, they have their tie-up with various highly-rated universities to placements. The companies visit universities at the end of their academic years and select academically bright students who are then put through stringent selection process. This is mainly done for the job profiles, which are at the lower level of organizational hierarchy. Selection Once the recruitment process gets completed, the company gets the idea regarding the number of talented people who are willing to offer their services to RIL. At this stage the company’s Human Resource Department gets into a more analytical mode. From the actual references of people working in RIL it can be stated that while selecting the employees for the positions at the beginner and medium levels of th organizational hierarchy such as software engineers and team leaders. The selection procedure is much more about aptitude testing as well as analysis of technical capabilities specific to position the company is recruiting for. The steps that are followed are: Placement Papers RIL conducts written tests for the people on recruitment lists, which include independent applicants, candidates suggested by the professional recruitments agencies with whom RIL has business tie –ups and students who are about to graduate from various universities . The paper aims at analysing the personality, aptitude and logical reasoning of the candidates alongside the technical acumen required for the job. A general pro-forma of the test is – 1. 70 to 80 multiple choice questions on logical reasoning and other parts, which do not require academic knowledge and are aimed at stimulating the awareness and aptitude abilities 2. 30-50 questions, which aim at looking purely into the technical knowledge of the candidate As such there is a focus on overall personality of person and not just technical ability. Personal Interview In the personal interviews, the HR specialists of the company aim to judge the personality, the character of the candidate, and his/her adaptability. Focus on professional qualifications are also judged but the focus is on overall abilities .This is due to the reason that RIL believes that training methods would develop the technical abilities of the candidate in such a way that the company focuses upon whether the individual would be able to adapt to the demanding working environment and integrate himself in the working philosophies of RIL. The company also looks into the references provided by the candidate .This is done as a way of making sure about the character of the candidate. ID cards of the candidate are also asked. Training and Development After selecting the desired candidates through the written tests and personal interviews, the candidates are provided conditional offer letters and are put through the training program of the company, which normally runs through 3 to 5 months, and involves rigorous technical training and tests to measure the performance levels. After the completion of the training period, the company analyzes the development of individuals over the training programme and decides upon whether to provide permanent job letters, or relieve them from the company. When the company is looking for the candidates for the higher level positions such as those at managerial levels or even higher the selection criteria, the company analyses deeply the experience the candidate has had over his professional life, i.e., his professional achievements with his previous employers, a graph of development over the years, and personal experiences. The company also deeply looks into the reasons for leaving the previous employers and most importantly the candidate’s vision for the company. Personal Investigation Once done with interview, HR department looks into the profile of the candidate interviewed and checks whether there is any blemish on the candidate’s personal as well as professional record through its sources and contacts in the industry and the fact that his ambitions and goals are in sync with the RIL objectives and goals. Discussion with the Board of Directors The HR department submits its report to the board of directors who discusses the matter at the meeting where the final decision on selection is made and a formal announcement of the recruitment is made through official channels like company website or through press release. Appraisal and Reward System in Reliance Industry Reliance industry has an employment strength of 25,487 in 2008. They need more and are continuing to recruit more employee each year. The reliance appraisal and reward system is based upon the employee involvement to achieve their goals and the objectives of the organization. This is to encourage the employee to do beyond the scope of work. Reliance mainly forecasts on 360-degree appraisal of an employee. This makes the employee to evaluate by himself and by their superior. They practice to do an appraisal on a yearly basis for lower and managerial employees. This helps the organization to give the feedback of the employee so the employee comes to know his weakness and strengths and he/she corrects his/her mistakes and will be motivated to do his/her best on future assessments. The reason why Reliance is using the 360-degree appraisal is because it is having a huge employment strength and the intention is to give full responsibility to the employees about their appraisal. From this, the employee can come to know their portfolio of his work. This appraisal helps the employee to be motivated in his job and his growth, and to identify training needs for their future career in the organization. This appraisal also helps to communicate between the team members while communicating it will improve the team environment and its effectiveness. They believe that continuous learning and training helps the managerial and leadership styles. Performance Appraisal System The Performance Appraisal System in Reliance Energy Ltd. provides for: Recognition of individual performance Continual learning and development Better skills and employability Monetary and other rewards The achievement of the organization's goals Increased productivity and profitability A motivated workforce  These objectives are taken more into consideration in the organization and they process their employee through these objectives. Human Resource Management System (HRMS) The HRMS has been started in 2000 in reliance industry, which was the part of the HR department. This system helps the employee to have frequent contact with the HR managers. The employee will be enrolled in online interfaces. This system has a whole database of the employee details and they have to make their attendance system, payroll system and administrative system and this system also helps the HR to recruit an employee through online and their performance appraisal. SAP-HR Reliance has opted for a software to know about the details of the employee that software is well organised in the organization and it is available in all locations and business. The software has the information database of the employees. The employee can interact with the HR regarding his needs and requirements. The Reliance Industries HR group is well reorganised. It is world-class standard in the concept of “shared services”. The employee can contact the HR across the country through this service that he can give his suggestion and request through this concepts like sanctioning leave information about the policies and procedures. Reliance Industries Work Environment Reliance work environment is a health and safety environment. They have a policy for health and safety environment. They are undergoing regular health check-up for their employees and they are creating an awareness among the employees regarding their health. To achieve this target, they are tied up with many collaborations related to these issue to create unique public private partnership (PPP). These contributions help the employee to work in a healthy environment. They have also adapted two approaches. One is focused on the work place, while the other is focused on their family members. Reliance is a world-class organization. They want to keep their environment zero percent of any incidences. These precautions not only help an individual, but it also help the whole working environment. They are also giving special awareness to the drivers and cleaners who are coming to their industries . Human Resource Development The Reliance mostly stresses on quality of life. They want their workplace to grow professionally and strengthen their personnel. They are giving a large exposure to the employee. The reason for these exposures is mainly to contribute to company excellence and employee personnel development. The employee is getting global opportunities around 36 countries. The reliance is a multi-cultural organization. There will not be any discrimination of race, religion, and sex. They are tied up with many institutions to give traning for the employees and some of them are listed below Reliance is associated with the Indian Institute of Management (IIM), Bangalore and the Indian Institute of Technology (IIT), Bombay. We have sponsored the participation of over 250 engineers in a customised Management course - MPRE (Management Program for Reliance Engineers) at IIM-Bangalore. We sponsored 91 science graduates and diploma holders to complete a Reliance Certified Engineering course with IIT-Bombay. Reliance conducted over 160,000 man-hours of training and 1,448 training programmes, covering 7,919 employees. The Company also supported development of all other employees with a highly scientific Key Result Area (KRA) based Performance Management System and Career Mapping exercises. Reliance has embarked on developing a performance linked incentive scheme for all its employees with the assistance of reputed international consultants. The company also started a 'Manufacturing Leadership Program for its Senior Executives from Manufacturing, in association with Hewitt Associates. All these exposures are given free of cost. By these exposures, the employee will stick to the company and he will give the best for the company. The organization will be profitable for the employee. The employee will sign a contract depending upon his exposure and he has to work for the company till his contract has finished. If the employee wants to shift to some other organization the employee has to return the amount to the organization which has been invested for his exposure. In other cases, even before contract is over but the employee does not measure up to the expectations, the employee will be dispatched from the organization. Traning and Development The Reliance mostly stresses on quality of life. They want their workplace to grow professionally and strengthen their personnel. They are giving a large exposure to the employee. The reason for these exposures is mainly to contribute to company excellence and employee personnel development. The employee is getting global opportunities around 36 countries. The Reliance is a multi-cultural organization. There will not be any discrimination of race, religion, and sex. They are tied up with many institutions that will provide training for the employees. and some of them are listed below The reliance is associated with Indian Institute of Management, Bangalore and the Indian Institute of Technology, Bombay. They are sponsoring around 250 engineers each year to customize the management course-MRPE (management program for reliance engineers). The reliance sponsors 91 diploma students to complete the reliance certificate engineering course with the help of IIT Bombay. They are also conducting 160,000 man-hours training and 1,448 training programs. This program covers around 7,919 employees. Reliance has embarked on developing a performance linked incentive scheme for all its employees with the assistance of reputed international consultants. They are also giving training for senior executives from manufacturing. This is known as manufacturing leadership programme. Employee Involvement Sujan M.Heathfield defines employee involvement as” creating an environment in which people have an impact on decisions and actions that affect their jobs”. It is a management and leadership philosophy about how people are most enabled to contribute to continuous improvement and the ongoing success of their work. Reliance Company makes a healthy environment for their employee as it helps in achieving targets of the organisation. There are few things which the reliance company uses to ensure employee motivation, freedom and involvement. By this, the reliance company not only makes the workplace better, but it also tries to establish an environment which is full of energy, lucidity and contribution. Example: The company provides hot coffee/tea or soft drinks. It also provides iPods for listening to soft music and provides some indoor games like table tennis, carom board, etc. so that the environment becomes healthy. The company also considers the recreation area. The Reliance Company arranges an open session for the employees in which the employees can share their views in respect to organizational and environmental problems which they face. The employees express their views and get views from others. If any employee decision is accepted, it makes the employee blissful. By this, the short conflicts among the employee’s ends. The Reliance Company arranges some cultural competition like rangoli and onam for their employees in which they compete with each other. By this, the reliance company show events which reflects the culture. The reliance company also organizes seminars session for their employees. It helps in updating the knowledge of the employee. By this, the seminars make the employees knowledge increase, which help in doing their work and achieving their targets. Methodology In our report we have collected our data with the help of qualitative method as our group members send a request to Reliance Industries regarding sending their HR policies and their objectives. We got a positive reply from the organization and with our complete team effort we have gathered as much information as possible through web access except the confidential issues in the Reliance Industries. In our report, we analyzed the HRD concepts in Reliance Industries and their major derivatives in the HR department. We discuss about the HR policies and why they are opting for these policies and the employment growth and their involvement in the organization; and how HR has relations with the employee; and how they are motivating the employees for their future career. We also give some value recommendations . HR Models Implemented in Reliance Industries Reliance HR model is based upon the Harvard models in the sense that they are soft approach. The human resource method follows the recruitment and selection from the organization. The training and appraisal was given out of the organization. The reward system is to motivate and retain the employee in the organization. The employee has power to take decision and control over the level of authority. Read More