Innovative HR Strategic Practices of Indian and
Foreign MNC


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In today’s competitive business
environment, Organizational Innovation is an essential aspect that requires
attention. HR practices have always played an important role in corporate strategy,
but with changing times, well-organized HR practices is needed now, more than
ever. HRM plays a major role in churning out new strategies that are better
suited to the dynamic setting of the business environment. Sometimes, HRM is
not a mere part of the strategy but the very factor that defines the strategy
itself. To remain competitive in today’s markets, Indian and Foreign MNCs are
required to revamp and upgrade their HR practices. This paper discusses about
the innovative strategies of Indian and Foreign MNCs and the HR practices
implemented by them.

While the basics of any HR practice
are similar, companies differ in their HR practices only in their
implementation and operations of the same. Companies change their HR practices
according to the cultural, political, economic and technological environment of
the countries in which they are operating. One of the more recent driving
factors for the standards of HR policies is Globalization. No longer are HR
practices a matter of trend, but a matter of survival for companies. Moreover,
competitive pressures have forced companies to be proactive and diagnose HR
problems and overcome them through new HR strategies. A key difference between
Indian and Foreign MNCs is the emphasis on alignments between parent and
subsidiary companies; something that Indian MNCs are not as concerned about.

As of the present time, the Indian
MNCs put a greater emphasis on managing performance from within and thus, focus
on getting their culture building practices right. In contrast, Foreign MNCs
are more focused on ensuring a greater synergy between the parent and
subsidiary companies and having standardized practices in place. Foreign MNCs
are also conscious of the cost involved and the performance expected from the
implementation of a strategy, unlike their Indian counterparts.

A discussion of the findings,
limitations, and implications are provided.



human resource management is the process of linking the human resource function
with the strategic objectives of the organization to improve performance.
Strategic human resource management focuses on the overall HR strategies
adopted by business units and companies, according to John Bratton; it is a
thought that integrates traditional human resource management activities within
a firm’s overall strategic planning and implementation, thus called strategic
human resource management. Strategic human resource management is concerned
with all those activities that affect the behaviour of individuals in their
efforts to formulate and implement the strategic needs of the business. The
pattern of planned human resource deployments and activities intended to enable
the firm to attain its goals. There is an explicit linkage between HR policy
and practices and overall organizational strategic aims and the organizational

the Management with strategic policies and implementation of new policies, the
company requires.

a company has many competitors, creating and maintaining competitive advantage
to the company is essential to have the position required.

and upgradation of the responsiveness is subject to improvised potential of the

in number of feasible strategic options available is the added advantage to the
company in various scenarios of management.

in strategic planning is the essential factor towards the Contribution
of goal accomplishment and survival of the company.

 strategic directions of the company as an
equally entitled member of top management influences majority of the company’s

the cordial relationship between HR managers and line managers to maintain the
ethicality and smooth functioning of the organization.

should have a constant and regular process of hiring, transferring and
promotions in the organisation.

?        Expansion in market and enter into new market,
there should be changes in skills and employee perspective.

 Structured compensation as an incentive to
achieve goals of the organization and it’s members.

Training based on the requirement of the company suitable for growth of




analyse the HR strategies implemented by the Indian and Foreign MNCs which have
made them the biggest companies.

focus on HR practices that relate to performance and growth in Indian and
Foreign MNCs.








This paper
is undergone through secondary data research for six Indian and six Foreign
MNCs referring number of articles, research papers, online journals, magazines,
books and company websites.  The new
concept of HRM calls for segmenting the workforce according to different
criteria like age, educational background and business background. Policies of
the company need to be tailor-made according to the needs of each group, to optimally
utilize the resources offered by each segment. There are many hurdles coming in
the way of companies to achieve their goals. For this, they need to take some
strategic initiatives which need to be fulfilled by HR practices by satisfying
employees. Human satisfaction leads to achieve organizational goals. Indian
corporates have been late movers, though fast changing to competitive
pressures. Foreign MNCs focus on mind recall and cost effectiveness. HRM
strategies should be adopted to boost morale of employees and high retention of
skilled employees.

Table 1
provides a summary of the strategic initiatives and innovative HRM practices of
Indian MNCs and Table 2 summarizes for foreign MNCs.

Table 1: Innovative HR strategic
practices adopted by Indian MNCs








Accept the
challenges of globalization
Powered by
intellect and driven by values
Culture of
ethics, performance, meritocracy
Creation and
sharing of wealth


campus programs like “Infosys Toastmasters Club” to provide support to the
Construction of
a leadership institute to foster the qualities of leadership within the
 Leadership through INSTEP where three to six-month
internships are given to students from across the globe




coordination and control
capabilities for customer centricity
 Managing workforce diversity and embracing

Assimilation Program
 E-learning initiatives available for
employees (Gyan Jyoti)
Induction Programs like HELLO (Helping employees launch and learn in the
organization) and NEST (Nurturing engagement with satisfaction and

Hindustan Unilever Ltd.


 Increase penetration level as well as per
capita consumption
 Increase productivity and quality

performance appraisal for performance management
identification and Talent development strategy



Table 2:
Innovative HR strategic practices adopted by Foreign MNCs







Improve quality

 Launch new models for diverse markets
 Reduce costs and increase operating
 Align employee attitude with corporate

retirement program
 Cafeteria Planning
development program to enhance the capacity of managers to think strategically,
manage their time effectively and improve work methods and quality 
healthy communication through the removal of emotion and reliance on data


Information Technology

Support system
with data
 Aggressive usage of data and testing to
support ideas
Attract best
talent, develop happier and more productive employees

Hiring through
People operation
Relaxation area
with entertainment
 Innovative technology tools that enable all
aspects of the HR function
 Learning and leadership development program
 Employees allowed to bring dogs to work 
Utilize people
with distinctive capabilities to create unsurpassed Competence in an area



Demonstrate and
sustain respect
Commitment to workforce
To be known for
the greatest respect for the individual
 Commitment to the advancement of women in
the workplace

recruiting/people with disabilities IBM’s Project Able
 E-learning programs like Basic Blue, One
Voice and Coaching Simulator were introduced to guide employees for a variety
of challenging management
of absence programs
approach to learning
 Global women leaders task force was formed
and expanded its technology camps for girls’ summer program to encourage for
technical degree



the market and strategic innovations is essential to survive in the competitive
environment. Therefore, the companies should focus on generating new ideas
which will lead to new strategies and this will eventually lead to inventions
and the practices should be implemented accordingly. And these practices will result
in the growth and the development of employees and the organisation. With the
increased number of employees, the employee turnover has increased drastically.
It is seen that innovative HR strategies have a positive relationship with
performance and growth of the Indian and Foreign MNCs.

One of the reason
behind the success of Infosys were its innovative HR strategies such as
“Infosys Toastmasters Club” and its decisions to accept challenges in the
changing economic, demographic and cultural environments. TATA hired external
consultant McKinsey & Co. which started Performance Ethnic Program to promote
young dynamic personnel with management programs. To build confidence within
the employees, Google cultivates a taste of failure and employees are
encouraged so that they can try again and again. It also gives them 20% of the
time towards employee’s independent projects, CSR activities, parties, game
rooms, reward system and the available resources for learning any four foreign
languages. Google has been awarded a high-performance company and superb place
to work. Ford has been named a leader in HR practice by People Management
consistently over the years.



Due to
globalisation and the changing economic, demographic and legal landscapes, it
is essential for the companies to analyse what constitutes an effective HR
strategy and how it may be best practiced is a challenge today. Due to
competitor pressure, the Indian companies are not in an advantaged position as
they failed to adopt to such changes. While, Foreign MNCs are trying hard to do
business in India, Indian companies must focus on Information technologies and
the practices to retain and motivate employees to reach the peak of the world.



This study
has been limited to a small sample size and is restricted to a few sectors. So,
generalizations cannot be made.



There has
been a successful improvement in the HR practices. These practices serve as key
drivers for employee commitment and employee engagement. Globalisation has
presented dynamics to cultures across the globe, hence the focus of human resources
on valuing diversity is crucial to employee engagement and satisfaction which
ultimately result in retention and development through appropriate training
programmes. Investments on initiatives that improve the quality of life and ultimately employee retention and
development is a necessary cost to any business. Companies should give adequate attention to their HR policies as it
is essential to both the Indian as well as Foreign MNCs in formulating their
strategies and implementing policies. Human resources policies and practices
play an important role in Indian as well as foreign MNCs for the development of
the company. However, problems
differ from company to company and therefore strategies must be undertaken accordingly.









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paper by Gireesh Sharma ON top ten hr practices.

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paper of foreign MNCs in India by, Dayanand Arora.





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