Human Resource Management in India: Performance and Complementarity

Abstract

This is a study of the relationship between HR practices and organisational performance of large‐scale enterprises in India. The main survey yielded 252 usable replies from the HR directors. Results show that mutually supportive sets of HR practices do not yield disproportionately superior outcomes than limited and focused individual practices. This highlights the limitations of strategic HRM in an Indian context. It seems there is little immediate benefit in developing sophisticated mutually supporting HR systems if particular firm or regionally relevant interventions yield clear benefits on their own right. These results highlight the limitations in national level institutions made for a general lack of complementarities, and/or that firms do not want to take the risk of over‐relying on a specific institutional feature that may be subject to change. We also find that innovative firms are not in any way more likely to adopt best HR practices to a greater degree than their less innovative counterparts. India's weak and uneven institutional coverage may open up more opportunities for HR innovation, but the lack of systemic support means that there are fewer opportunities for the latter to realise its fullest potential.