A Study on career systems in Indian organizatons: the role of major organizational factors

Abstract

Research on careers has largely focused at the individual level to gain an understanding of employee issues such as personal flexibility, work personal life balance, and ways to have fulfilling and rewarding work. Career research from the perspective of the organization has been relatively scanty. Management of employee careers by the organization is important for reducing employee turnover and increasing commitment. Moreover, organizations would be able to manage sequential learning experiences of employees to attain certain jobs if they are developed within. Crucially for the organizations, there seems to be a mutually reinforcing link between its strategic behavior and career systems characteristics. Specific human resource and career system practices are more appropriate than others in implementing certain business strategies. Alternately, dominant career patterns and experiences of employees at the top would drive the business strategy. This study is aimed at the business unit level of analysis where the prime concern is of understanding the linkage between business unit strategy and career system practices for managers. Career systems, which is the central concept of this study is defined as a set of interrelated human resource policies and practices involved in managing the flow of employees through the organization. Empirical research indicates that there are variations in the adoption of career system practices across organizations and across businesses within the same organization. While some organization and/or businesses may be oriented externally for its supply and maintenance of organizational membership, others are oriented internally through elaborate career support practices. Research in career management and career systems have not explored the reason for differences across organizations based on its reliance on external and internal manpower. Further career research at the organizational level has not adequately explained the linkages between organizational variables and career system choices. Our research attempts to fill this gap by exploring the relationship between organizational variables such as strategic orientation-defined in terms of the pattern of resource allocation, and career system variables such as internal labour market orientation, employee advancement orientation and employee lateral movement. Relative performance of the business unit, age, managerial labour market demand-supply gap and perceived environmental uncertainty were used as control variables. Further previous empirical researches in career management have predominantly adopted a survey method, which limits the type of question that can be addressed. We have adopted a mix of both qualitative and survey methods. The qualitative study was aimed at understanding the dynamics of linkages between the organizational context and career system variables and to provide a description of a career systems practices in operation. The survey was aimed at testing the specific hypotheses between organizational variables especially strategic orientation variables and career system elements and also to provide a description of the career system practices in use in Indian businesses. A qualitative study was done with Tata Steel. Data on human resource practices and the organization context were obtained through in-depth semi-structured interviews with sixteen middle and senior executives and through a review of secondary information and published case studies. The career system practices within the framework of the contextual factors were looked at to explore linkages. The study indicates that the career system practices varied as per specific environmental conditions and business strategy prevalent at various time periods during the organizational evolution. Further, the study indicates consistency across various career system practices. Apart from environmental and strategic factors, it was found that structural and cultural factors also affect employee career management. In the second phase of research, a survey was conducted amongst top and senior management executives of different business units. The survey had responses from 53 business unit representing 23 industries. 19 of the business units were in the services sector and remaining 34 were in the manufacturing side. It had representations from public sector companies, private companies, MNCs and listed companies. Data from these 53 business units were analyzed using bi-variate and multi-variate statistical techniques. Some Key findings from our study  The strategic orientation measure of ‘Analysis’ is a consistent predictor of career system practices. ‘Analysis’ represents an overall problem solving approach to strategic decision making. The extent to which businesses attempt to be exhaustive as well as integrative in their strategic decisions depends primarily on whether they can develop the employees from within. Further ‘Futurity’ and Defensiveness’ are strongly related to ‘Analysis’ and internal development of employees indicating that long-term orientation in resource allocation decisions and protection of the product-market or technology domain are important considerations for long-term growth and development of employees within the organizations..  The ‘tightness’ in the managerial labour market in terms of scarcity of employees is a strong determinant on whether the organizations would staff and advance employees from within.  Environmental uncertainty has a negative effect on the decision to staff employees from within. Businesses facing higher uncertainty would be less able to predict future manpower requirements and would prefer to have shorter-term relations with its employees.  Inter-group differences based on the line of business (manufacturing vs. services), the ownership type (Indian vs Foreign) and list characteristics (Listed vs unlisted) does not show any major differences in the career system characteristics.  The requirements for skilled employees due to fast growth of businesses and at the same time greater employment opportunities outside have placed a demand on organizations to develop mechanisms for internal supply and retention of employees.  Structural changes such as creation of new positions and increased participative mechanisms provide greater career development opportunities and may even provide new career avenues for employees. Some major contributions of the study to research Contributions to literature This study identifies important organizational contributors to career system decisions. Specifically it highlights two external factors namely environmental uncertainty and demand for employee due to scarcity and internal factors like structure and strategic orientation as important determinants of career systems. Further, the study identifies different triggers for staffing and employee advancement decisions. Specifically uncertainty faced is a significant contributor to relying on external supply of manpower while it does not have significant influence on employee advancement decisions. This study is also perhaps the first of its kind in providing a detailed description of career system practices in use and its interrelationship to its context amongst Indian organizations and amongst the very few studies providing an empirical account of the state of career system practices in Indian businesses. Further, our conceptualization of career system practices helps by being applicable to different national contexts. Methodological contribution This study is one of the initial attempts to investigate the influence of business level strategy on career management systems using a comparative measure of strategy across a cross section of businesses. The typological approach in measuring strategy used in previous research work in Strategic Human Resource Management (SHRM) has the limitation of assuming mutual exclusivity in strategic focus, which may not be the case in reality. Our use of comparative measure identifies one strategic focus, which may not be the case in reality. Our use of comparative measure identifies one strategic orientation variable-‘Analysis’ as a consistent predictor of all career system elements. This would not have been possible if we had followed the typological approach.

Contributions through Research Design Previous researchers have predominately adopted a survey method, which restricts the kind of questions that can be addressed. Our use of both qualitative and quantitative methodologies helped investigate the dynamics of the relationship between the organization context and career system practices and also test specific hypotheses between organizational variables and career system elements. Managerial implications This study highlights that there is an organizational backdrop to the way organizations manage employee careers. Specifically the systematic and structural elements have important implications for managing employee careers. The link between strategic orientation and career system practices has shown that businesses can foster an overall problem solving approach to strategic decision making by having an internal labour market orientation, providing support for employee advancement and having higher job rotation/transfers. These are expected to foster a positive social climate of trust and cooperation making knowledge exchange and combination easier and the decision making more comprehensive. Further HR managers and practitioners should be cognizant of the business context in terms of the managerial labour market situation and the level of uncertainty faced by the business. Essentially, if the businesses face a high level of uncertainty , it would be prudent for the managers to have a greater reliance on manpower from outside rather than developing within. Further a ‘tight’ managerial labour market due to scarcity of employees warrant career system practices oriented towards long-term growth and development of employees. Our study has further indicated that structural changes in the organization like creation of new positions, changes in the number of levels in the hierarchy and increased use of participative mechanisms like teams, task forces etc. has important implications for managing employee careers. New positions and participative mechanisms provide an opportunity to the employees to demonstrate their skills and also act as training grounds for picking up valuable skills, which might be useful to their career growth. Further participative vehicles like teamwork provide an opportunity to an employee to establish professional relationship across functional boundaries, which may even prove to be a boon for employees to move to a new area/function.