E3 Journal of Business Management and Economics Vol. 1(1). pp. 026-031, October, 2010 Available online http://www.e3journals.

org/JBME 2010 E3 Journals

Full Length Research Paper

Satisfaction of HRM Practices and Performances in State Level PSUs in India: a Case Study
Chimun Kumar Nath
Department of Commerce, Dibrugarh University, Dibrugarh-786004, Assam, India. Phone# (0373) 2370365 (O); 2327946 (R ). Email: nathchimun@yahoo.com
Accepted 29 September 2010

The basic aim of this paper is the logical extension of some of the earlier studies investigating as to what are the perceptions of the internal customers regarding the overall performance of the HRM practices. The objective of this paper is to assess the level of Overall satisfaction with HRM practices of APL as perceived by the human resources i.e. the internal customers of APL. It has been observed that though the satisfaction level of HRM practices is high in the organization, but the HRM performance is not up to the mark. Key Words: satisfaction, HRM practices, HRM Performance. Introduction This is a logical extension of some of the earlier studies investigating as to what are the perceptions of the internal customers regarding the overall performance of the HRM practices. The professional HR literature is currently awash with articles dedicated to measuring, and reporting upon, the alleged measurable link between an organizations HRM practices and its performance referred to hereafter as the HRM-P link(See, for example, Accenture 2004; Bukowitz et al. 2004; Donkin 2002, 2003, 2004; Kingsmill 2003; Overall 2002; PriceWaterhouseCoopers 2003; Saratoga 2005; Thomas et al. 2003; Witzel 2004; Wright 2001). The government too is interested in this link (Kingsmill, 2003). Although the Operating and Financial Review (OFR), with its obligations to measure and account for human capital, was repealed early in 2005, the DTI has not abandoned the idea completely, and the government is currently considering the OFR's replacement (Czerny, 2006). Underpinning claims from the professional HR community and government, are scores of empirical research papers that have appeared over the last decade, claiming there is a measurable link between an organization;s HRM practices and its performance and that empirical evidence proves it{Rather than provide a long list of scores of these oft-cited references, we refer the reader to two recent surveys Wall and Wood (2005) and Boselie et al. (2005). It should be noted that Wall and Wood conclude that 'existing evidence for a relationship between HRM and performance should be treated with caution (2005). In another survey, Godard (2004) writes: 'Overall, these concerns suggest that we should treat broad-brush claims about the performance effects of [HRM practices], and about research findings claiming to observe them, with a healthy degree of scepticism.' The empirical evidence of an HRM-P link is, at best, inconclusive.}. Supporting and sustaining this research on the HRM-P link is what might be described as a 'scientific' approach. Boudreau and Ramstad (1999), for example refer to 'scientific studies'; Murphy and Zandvakili (2000) suggest that 'scientific measures be used to evaluate the effectiveness of HRM practices' referring to 'data collected by scientific methodology;' and Brown (2004) refers to the 'science of human capital measurement'. There is, however, a problem with this 'scientific' approach to empirical research on the HRM-P link: it is under-theorized. Some, but by no means all, of those involved in this research are aware of the problem: the following comment exemplifies the point{See also Becker and Gerhart 1996; Guest 1997, 2001; Guest et al., 2003; Guest et al., 2004; Laursen 2002; Toulson and Dewe 2004; Wright et al., 2003. It is possible to find articles that start by lamenting the lack of empirical and theoretical work on the HRM-P link, and end by quietly abandoning

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the theoretical dimension, leaving the empirical dimension as an inadequate substitute e.g. Benkhoff, (1996). This is a point noted by Haynes and Fryer (2000). In the introduction to a series of case studies, Becker and Huselid claim to provide 'an outline of the theoretical rationale and empirical literature linking HRM systems with corporate performance (1999). We see little that can be described as 'theoretical rationale'.}. Much of the writing in the field of SHRM has been concerned with either practical advice or presentation of empirical data. Without good theory, the field of SHRM could be characterized as a plethora of statements regarding empirical relationships and/or prescriptions for practice that fail to explain why these relationships exist or should exist. If, in fact, the criticism that the field of SHRM lacks a strong theoretical foundation is true, then this could undermine the ability of both practitioners and researchers to fully use human resources in support of firm strategy. (Wright and McMahan, 1992: 297) Many of those who are aware of the problem of undertheorization{While some recognize technical problems with metrics, measurement and data, (Becker and Gerhart, 1996; Gerhart, 1999; Gerhart et al., 2000; Wright and Sherman, 1999), we do not address these problems because our critique is aimed at the philosophical argument which overarches these technicalities.} are not aware of how deep the problem runs, suggesting, or strongly implying, that theory will emerge and develop via more, and/or better, empirical work. The following comment exemplifies the point(See also Boudreau and Ramstad, 1999; Budhwar, 2000; Guest, 1997, 2001; Write et al., 1992). Although theory development is critical to the development of a discipline, a proliferation of theories and concepts can impede the accumulation of knowledge. Researchers should focus as much attention on generating a cumulative body of accurate and meaningful estimates of effect sizes on generating new concepts and theories. (Becker and Gerhart, 1996) Unfortunately, this 'solution' has been less successful than many might have hoped. Empirical research has multiplied, with little or no theoretical development, and we are unaware of any significant theoretical breakthroughs derived from empirical research. Lack of theory is, however, not the only problem: lack of theory goes hand-in-hand with lack of explanatory power. The root cause of these two problems, we argue, lies at the level of philosophy of science, especially ontology, epistemology, methodology and causality. And because the HRM-P literature is almost completely devoid of philosophical discussion, two exceptions are Wright and MacMahan (1992) who do address philosophy and the HRM-P link; and Kane (2001) who considers philosophy in HRM more generally. The Human Resource Management Review (Steel, 2003) has a symposium devoted to 'methodological issues in absenteeism

research' (emphasis added). While this is a slightly different subject matter, there are lessons for us. The symposium does not address methodological issues beyond problems of quantification and research design. All articles in the symposium operate, unquestioningly, with a 'scientific' approach. The tenor of the symposium might be grasped from the opening comment. When the editor 'invited me to serve as guest editor on a special issue devoted to methodological issues ... I immediately decided that the issue's panelists should be drawn from among the ranks of the discipline's most active and prolific researchers. No keener insight into methodological issues is attainable than that won on the empirical battlefield where our most careful and painstaking efforts are so often held hostage to the whims and vagaries of the methodological equivalent of the Greek Fates' (Steele, 2003). The lack of theory and explanatory power is simply not being addressed. In order to assess the gap a case study has been carried out at APL, Assam, India. This paper is an outcome of that study. This study covers the philosophical gap between the HR theory and practice through the parameter of satisfaction of the HR towards HRM practices. The aim of this paper is: (a) To assess the levels of Overall satisfaction with HRM Practices, (b) To study the relationship between the Overall index of satisfaction with HRM Practices and gap between the expectation and experience scores in respect of both [i] Internal-marketing skill evaluation and [ii] Ideal HRM performance scenario. By doing this the author tries to assess the gap as being established in the early part of the paper and to draw a methodology to reduce such gap. The Hypothesis considered for this Paper is: H01: There exist, a low level of Overall satisfaction with HRM Practices leading to discernible HRM performances.
Methodology As the title suggests, the Case Study Method of Research has been followed here. It is a case study of a State Owned Public Sector Undertaking named Assam Petrochemicals Limited, Namrup, Assam, India. All the employees' working in APL at Namrup Head Office (i.e. Executives, Non-Executives) constituted the universe of the study. Considering the time and resources constraints, the sample size was fixed at 640 respondents. Out of these, a response from 424 human resources has been received. For collecting primary data, discussion and interactions with managerial personnel, employees of different departments at different levels were conducted along with three different interview schedules designed specially for the purpose. Secondary data were collected from Company literatures, pamphlets, appraisal related documents, and other relevant information on the techniques including website of APL etc. The tables and cross tables were prepared based on similarities & dissimilarities of characteristics and opinions. These were further treated with the statistical tools to arrive at logical conclusions

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Table 1. Overall Satisfaction with HRM Practices

N Index of Overall Satisfaction With HRM Practices 424

Mean 13.5354

Std. Deviation Std. Error 95% Confidence Interval For Mean 3.4502 .1676 Lower Bound 13.2060 Upper Bound 13.8647

Source: Compiled from Survey data

Table 2. Pearson Correlations between Expectation-Experience Gap in Respect of HR Skill Evaluation, Ideal HR Post-Performance Scenario and Overall Satisfaction Index

Overall satisfaction

Gap between expectation and experience in HR skill evaluation -0.348 0.000 1.000 x

Gap between the expectationand experience in ideal HR post-performance scenario -0.333 0.000 0.619 0.000

Index of Overall satisfaction with HRM Practices Sig. (2-tailed) Gap between expectation and experience in HR skill evaluation Sig. (2-tailed)
Source: Compiled from Survey data

like: Reliability Test with Cronbachs alpha measures, Paired TTest, One way Analysis of Variance [ANOVA], etc. The levels of overall satisfaction have been calculated based on the scale specially developed for the purpose. These required identification of [a] items reflecting features of the Performance Appraisal System, [b] scaling techniques to be used, [c] Reliability of the scale, and, [d] Interpretation of the scale. Items of the Scale Items bipolar in nature and reflecting features of the HRM Practices were selected from the survey of literature (Mamoria, 1997; Bombay 1997; Jucius, 1976; Tripathi, 1996) to develop the scale. This was done to ascertain and assess the level of the Index of Overall satisfaction with HRM Practices of APL as perceived by the human resources of APL. The items considered were: [a] Useless vs. Useful [b] Non-functional vs. Functional [c] Not-sensible vs. Sensible [d] Inefficient vs. Efficient [e] Harmful vs. Beneficial [f] Unproductive vs. Productive [g] Ineffective vs. Effective [h] Dull vs. Exciting [i] Not-enjoyable vs. Enjoyable

Reliability of the Scale The score/index of Overall satisfaction with HRM Practices of the company in respect of each of the HR were ascertained by summing up the scores in respect of the above nine bipolar items. Collectively all these were considered as the level of the score/index of Overall satisfaction with HRM Practices of the APL. Here, Coefficient of Cronbachs alpha was used as the method of Reliability Test. A reliability Test of the scale revealed that the Reliability Coefficients of 9 items is 0.9173. This evidences the high degree of Reliability of the Instruments used to measure as suggested by Nunnaly, (1978). Moreover, the average inter-item correlation, Annexure-1 reveals the reasons of such high degree of Coefficient of Cronbachs alpha. Limits of Overall Satisfaction with HRM Practices Table.1 indicates that Index of Overall satisfaction with HRM Practices is 13.54 units. This is in terms of percentage indicative of 75.22. % [i.e. (13.54/ 18) X 100]; and also indicative of High level of Overall satisfaction with HRM Practices. But when it has been compared with the HR performances, it is quite discernable and there is still scope for further improvement.

Scaling Technique Used The respondents were asked to give their overall opinion regarding the HRM Practices of APL on each of the nine bipolar items. Items in the left were used to indicate the negative aspects, and, items in the right, to indicate positive aspects of the HRM Practices of APL. A score of 1 was assigned if negative item had been selected, and a score of 2 was assigned if positive item had been selected.

Relationship between the Scales Here the Correlation Analysis between ExpectationExperience Gap in respect of HR skill evaluation, HR Post-Performance scenario and Overall satisfaction Index has been performed. From Table 2, it has been observed that the degree

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and direction of co-relationship between Index of Overall satisfaction with performance appraisal system and Gap between expectation and experience in respect of HR skill evaluation is -0.348. The calculated Probability of significance [i.e.0.0], when compared with = 0.05, indicates that the relationships cited above are linear. In other words, this portrays that the greater the gap between the expectations and experience in respect of HR skill evaluation, the lesser the overall satisfaction with HRM Practices and vise-versa. Index of Overall satisfaction with HRM Practices and Gap between the expectations and experience in respect of ideal HR post-performance scenario is -0.333. The calculated Probability of significance [i.e.0.0], when compared with = 0.05, indicates that the relationships cited above are linear. In other words, this portrays that the greater the gap between the expectations and experience in respect of ideal HR post-performance scenario, the lesser the overall satisfaction with HRM Practices and vise-versa. Gap between expectation and experience in HR skill evaluation and Gap between the expectations and experience in ideal HR post-performance scenario is 0.619. These gaps are positively related; this is obvious, because, they, individually, negatively related to the variableIdex of overall satisfaction with HRM Practices. Moreover, the calculated Probability of significance [i.e.0.0], when compared with = 0.05, indicates that the relationships cited above are linear. This is indicative of the fact that more Gap between expectation and experience in HR skill evaluation likely to end up in the more Gap between the expectations and experience in Ideal HR post-performance scenario; and, vice versa. Conclusion The hypothesis that H01: There exist, a low level of Overall satisfaction with HRM Practices of human resources in APL leading to discernible HRM performances. is not tenable. Rather, there exist, a high level of overall satisfaction as perceived by the Human Resource of APL regarding the HRM Practices of APL. It has been observed that the greater the gap between the expectations and experience in HR skill evaluation, the lesser the overall satisfaction with HRM Practices and vise-versa. Similarly, it has also been observed that the greater the gap between the expectations and experience in HR post-performance scenario, the lesser the overall satisfaction with HRM Practices and vise-versa. With the likely response from the HR community that these philosophical concerns are rather abstruse, academic matters of little relevance to the day-to-day activities of managing the workforce. HR managers are, of course, completely unaware of the philosophical problems noted above, in part, because researchers themselves are unaware of them and hence cannot

report them to the HR community, and, in part, because busy HR managers simply do not have the time (even if they have the inclination, and expertise) to delve into philosophy. Though this study may not be comprehensive enough to draw a clear cut philosophical gap between theory and practice, but the research suggests that HR practitioners are less than enthusiastic about the scientific approach. The study apprehends that HR professionals understanding of the role of HR in enhanced organizational performance is not in line with the scientific approach involving quantification, measurement, statistical association, causality as event regularity, prediction and closed systems. The researcher believe that it is time the HR community stopped implicitly, and uncritically, accepting the scientific approach and the philosophy that underpins it, and started seeking alternatives that might provide theoretical justification and robust explanation about why HR practices might actually improve organizational performance. By ignoring philosophy, however, the HR community does not avoid it. Instead, the HR community ends up implicitly, and uncritically, accepting the philosophy underpinning the 'scientific' approach despite the fact that it is deeply problematic. While we are not suggesting that all HR managers immediately sign up for a course on philosophy, neither are we advocating philosophical ignorance. We are, instead, advocating some critical awareness with the philosophy of science that the HR community is, as a matter of fact, being asked to accept, via the current empirical research on the HRM-P link. The next time complicated statistical analysis is wheeled out to 'prove' the effects of HRM on the bottom line, a HR manager with some critical awareness of the philosophy of science should be in a stronger position to challenge this 'proof'. In future research a rigorous philosophical discussion with empirical findings is required to underpin the HRM-P link not only from the parameter of satisfactions but also from expectations so that the theoretical and practical gap can be covered up. Abbreviations APL: Assam Petrochemicals Limited. HR: Human Resources HRM: Human Resource Management HRM-P: HRM practices and its Performance SHRM: Strategic Human Resource Management
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Appendix 1. Statistics on Overall Satisfaction of Performance Appraisal System

Items of Attributes Useless vs. Useful Non-functional vs. Functional Not-sensible vs. Sensible Inefficient vs. Efficient Harmful vs. Beneficial Unproductive vs. Productive Ineffective vs. Effective Dull vs. Exciting Not-enjoyable Enjoyable

Scale Mean if Item Deleted 12.1259 12.1069 12.1045 11.9905 12.1544 12.0736 12.0238 11.9572 11.9097

Scale Variance if Item Deleted 9.3294 9.4528 9.5652 9.3713 9.5309 9.5922 9.3756 9.9125 9.4347

Correlated ItemTotalCorrelation .7710 .7213 .6801 .7542 .7054 .6670 .7466 .5683 .7635

Alpha if Item Deleted .9036 .9070 .9098 .9047 .9081 .9107 .9052 .9171 .9043

vs.

Source: Compiled from survey data using SPSS 10.0 version