Software firms in India should give serious thought to what drives ... large companies were considered for the study and structured questionnaires were ...
IMPORTANCE OF INNOVATIVE HUMAN RESOURCE PRACTICES IN CONTROLLING COUNTERPRODUCTIVE WORK BEHAVIORS 1 1,2
Manu Melwin Joy, 2Ramesh Krishnan
Assistant Professor, Ilahia School of Management Studies (India)
ABSTRACT While software industry in India is having a dream run in terms of revenue and contribution to GDP, the biggest challenge faced by the sector is not attracting the prospective employee but retaining the talent. Indian software industry in the eye of an employee attrition storm and high turnover is back to a serious concern. Employee turnover has been triggered by factor such as no fairness rewards, less opportunity in career progression, dissatisfaction with superiors and so on. Retaining the talented workforce in a cost effective manner is a herculean task that human resource managers are confronted with. Software firms in India should give serious thought to what drives employee commitment. When cut throat competition is the buzzword and employee poaching is rife, it is imperative for organizations to look for choices to keep their work force morale high to ensure success. A wrong move can lead to the outflow of innovative and talented personnel to the competitor and this may prove to be detrimental for the organization. Even though many studies have focused on turnover, employee retention and its predecessors have been usually ignored. This paper focuses on establishing the relationship between innovative human resource practices and counterproductive work behaviours. The study explores the various definitions of the two variables along with the multiple dimensions of counterproductive work behaviors. 300 software professionals working in 10 large companies were considered for the study and structured questionnaires were employed for collecting data. Data analysis was carried out with the help of multiple regression analysis using SPSS software. Results confirmed statistically significant relationship between innovative human resource practices and counterproductive work behaviors as a whole. Further analysis found that there is a significant negative relationship between innovative human resource practices and production and property dimension of counterproductive work behaviors.
Key Words: Innovative Human Resource Practices, Counterproductive Work Behaviors, Information Technology Industry. I INTRODUCTION Recent statistics shows that India is the world's largest sourcing destination with a share of 55 per cent of the US$ 142 billion market. The Unique Selling Proposition (USP) of India remains to be its cost competitiveness in
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providing Information Technology (IT) services, which is 2-3 times cheaper than the US. The country has the largest pool of qualified technical graduates in the world which is available at a cost saving of 60-70 per cent to source destinations. This advantage has equipped Indian IT firms to help clients to save US$ 191 billion in the last five years. IT industry in India amounts to 11.4 per cent of the global market and exports of IT services accounted for 52.35 per cent of total IT exports. There has been a significant rise in the contribution of the IT sector to India’s GDP from 9.2 per cent in 2015 from 1.3 per cent in 1998. For promotion of the sector, Government of India has declared tax holidays to the industry for starting software technology parks of India and Special Economic Zones. The top six companies account to approximately 36 per cent to the total sector revenue, proving the market to be fairly competitive, with TCS being the front runner with a market share of 10.1 per cent. (NASSCOM, 2013) Amidst all these positive indicators, the industry is facing serious issues in the area of employee turnover. Most large size software firms reported a steady increase in employee turnover rate and experts argue that the trend may continue going forward. According to a survey done by Global management consultancy, Hay Group, it was found that 43 million more employees are likely to leave their organizations worldwide over the next four years compared to 2012, owing to enhancement of financial and labour market conditions. India is expecting a turnover rate of 26.9 per cent in the organized sector in 2013 and is the highest turnover rate globally. Indian employees working in the sector shared concerns regarding the fairness of their compensation (52 per cent) and the degree to which benefits meet their needs (48 per cent). Considering the top three players, TCS, Infosys and Wipro are having the attrition rates of 10.6%, 17.1% and 21.7% respectively. At this juncture, firms and HR managers accept that fact that qualified and skilled individuals serve as the competitive advantage in the emerging economy. With special reference to Indian IT industry, while majority of researches have focused on find out factors resulting in turnover, only few studies have stressed on employee retention through human resource practices (Budhwar et al., 2006) and talent management (Becker & Huselid, 1999).
II LITERATURE REVIEW Innovative Human Resource Practices (IHRP) Experts have employed various terminologies such as high commitment work practices, transformed workplaces, high involvement work systems, high performance management and flexible production systems to depict work environment with innovative approaches to HR practices (Wood, 1999). Pfeffer (1994) and Lawler (1986) argued that there are many advantages that firms can enjoy by introducing innovations in work setting. There are three conditions that have to be met for these practices to result in superior performance of the firms. It consists of individuals having the right kind of skill and knowledge, they are inspired to apply it at their work and they exhibit extra role behaviors favourble for better work performance (MacDuffe, 1995). When innovation is introduced in
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workplace, there is little need for supervision and flexibility enjoyed by the employee is enhanced. Also, employees experience high morale which results in high levels of performance by bringing down employee grievance rates.
Counterproductive Work Behaviors (CWB) Many researchers have categorized counterproductive behaviors using different yard sticks. The present study has adopted the classification put forward by Robinson & Bennett (1995). This perspective consists of two dimensions: (1) Minor Vs Serious and (2) Interpersonal Vs Organizational. By blending these two aspects, counterproductive behavior can be divided into four such as production deviance, property deviance, political deviance and personal aggression.
Production deviance – These are behaviors that break the statutory norms describing the minimal quality and quantity of work to be achieved.
Property deviance – These happens in occasions where employees tamper the tangible assets of the firm without authority.
Political deviance – These are behaviors such as engaging in social interactions that puts coworkers at a political disadvantage.
Personal Aggression – These are behaviours exhibiting aggressive fashion towards other employees and endangering their reputation.
III RESEARCH METHODOLOGY IT employees with an experience of not less than one year in the respective firm were included in the current study. A well designed questionnaire was forwarded to 300 employees working in 10 large software companies through email. Information related to innovative human resource practices and counterproductive work behaviors was collected using the tool developed by Tanuja Agarwala (2003) and Robinson and Bennett (1995). Data collection was completed within a month’s time spanning from February 2015 to March 2015. Data analysis was carried out with the help of multiple regression analysis using SPSS software.
IV DATA ANALYSIS 4.1 Impact of innovative human resource practices on production deviance dimension of counterproductive work behaviors Multiple regression analysis was used to find out the negative impact that innovative human resource practices have on production deviance dimension of counterproductive work behaviors.
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H1 – Innovative human resource practices have a strong negative impact on production deviance dimension of counterproductive work behaviors. The null hypothesis that innovative human resource practices have no negative impact on production deviance dimension of counterproductive work behaviors was statistically tested.
Table 1 Multiple regression analysis results for relationship between innovative human resource practices and production deviance dimension of counterproductive work behaviors
Variable
Beta value
Std Error
P value
Average Full Collinearity VIF
R2
IHRP
0.414
0.037
0.001*
1.564
0.479
(* indicates items significant at 5% significance level) It is evident from the analysis that innovative human resource practices have a strong negative impact on production deviance dimension of counterproductive work behaviors with a beta value of 0.414 and R2 value of 0.479. All the values obtained from the analysis support the hypothesis that innovative human resource practices have a negative impact on production deviance dimension of counterproductive work behaviors of employees working in software industry. Hence H1 is accepted.
4.2 Impact of innovative human resource practices on property deviance dimension counterproductive work behaviors Multiple regression analysis was used to find out the negative impact that innovative human resource practices have on property deviance dimension of counterproductive work behaviors. H2 – Innovative human resource practices have a strong negative impact on property deviance dimension of counterproductive work behaviors. The null hypothesis that innovative human resource practices have no negative impact on property deviance dimension of counterproductive work behaviors was statistically tested.
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Table 2 Multiple regression analysis results for relationship between innovative human resource practices and property deviance dimension of counterproductive work behaviors Variable
Beta value
Std Error
P value
Average Full Collinearity VIF
R2
IHRP
0.446
0.043
0.002*
1.529
0.408
(* indicates items significant at 5% significance level) It is evident from the analysis that innovative human resource practices have a strong negative impact on property deviance dimension of counterproductive work behaviors with a beta value of 0.446 and R2 value of 0.408. All the values obtained from the analysis support the hypothesis that innovative human resource practices have a negative impact on production deviance dimension of counterproductive work behaviors of employees working in software industry. Hence H2 is accepted.
4.3 Impact of innovative human resource practices on political deviance dimension counterproductive work behaviors Multiple regression analysis was used to find out the negative impact that innovative human resource practices have on political deviance dimension of counterproductive work behaviors. H3 – Innovative human resource practices have a strong negative impact on political deviance dimension of counterproductive work behaviors. The null hypothesis that innovative human resource practices have no negative impact on political deviance dimension of counterproductive work behaviors was statistically tested.
Table 3 Multiple regression analysis results for relationship between innovative human resource practices and political deviance dimension of counterproductive work behaviors
Variable
Beta value
Std Error
P value
Average Full Collinearity VIF
R2
IHRP
0.219
0.032
0.071
1.224
0.187
(* indicates items significant at 5% significance level)
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It is evident from the analysis that innovative human resource practices have no strong negative impact on political deviance dimension of counterproductive work behaviors with a beta value of 0.219 and R2 value of 0.187. All the values obtained from the analysis support the hypothesis that innovative human resource practices have no negative impact on political deviance dimension of counterproductive work behaviors of employees working in software industry. Hence H3 is rejected.
4.4 Impact of innovative human resource practices on personal aggression dimension counterproductive work behaviors Multiple regression analysis was used to find out the negative impact that innovative human resource practices have on personal aggression dimension of counterproductive work behaviors. H4 – Innovative human resource practices have a strong negative impact on personal aggression dimension of counterproductive work behaviors. The null hypothesis that innovative human resource practices have no negative impact on personal aggression dimension of counterproductive work behaviors was statistically tested.
Table 4 Multiple regression analysis results for relationship between innovative human resource practices and personal aggression dimension of counterproductive work behaviors Variable
Beta value
Std Error
P value
Average Full Collinearity VIF
R2
POS
0.276
0.023
0.062
1.241
0.143
(* indicates items significant at 5% significance level) It is evident from the analysis that innovative human resource practices have no strong negative impact on personal aggression dimension of counterproductive work behaviors with a beta value of 0.276 and R2 value of 0.143. All the values obtained from the analysis support the hypothesis that innovative human resource practices have no negative impact on personal aggression dimension of counterproductive work behaviors of employees working in software industry. Hence H4 is rejected.
V FINDINGS AND DISCUSSION The above results shows that innovative human resource practices is having a strong negative impact on counterproductive work behaviors exhibited by employees working in software industry. Separate in-depth analysis
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has shown that there is a significant negative relationship between innovative human resource practices and production and property dimension of counterproductive work behaviors. It was also found that there is no significant negative relationship between innovative HR practices and political and personal aggression dimension of counterproductive work behaviors. The purported relationship between dependent and independent variables were established with the help of data analysis. Therefore, the main hypothesis suggested by the researcher stating the strong impact that innovative HR practices have on employee withdrawal behaviors as a whole was proved statistically. Literature is rife with studies stating the positive impact that innovative human resource practices have on long term organizational success. It was statistically proven that innovative human resource practices can result in enhanced perceived organizational support (US Department of Labor. 1993), organizational culture (Huselid, 1995), job setting (MacDuffie, 1995) and recognition of employees (Milman, 2003) which will increase the probability of employees staying in the organization. Also, majority of the experts have stated that employees who exhibit positive attitude towards work hours, job satisfaction and organizational commitment tend to stay with the firm (Milman & Ricci, 2004). Career advancement opportunities with a futuristic perspective can bring down attrition rates and lead to better organizational commitment (Cho et al., 2006). Many researchers have proved the influence of these factors on attrition and retention of talented and skilled employees (Shaw et al., 1998; Walsh & Taylor, 2007).
VI CONCLUSION This research contributes significantly to the present body of literature on voluntary employee retention. The findings of the research are beneficial for both industry professionals and academicians. The main take away of the study will help in establishing good employee retention practices in IT sector. This will equip the companies in developing a trusting and loyal workforce that results in superior firm performance. The crucial insights from the research will help academicians to support industry professionals with the right kind of competencies to succeed in future. To sum up, this is a significant and timely study for the human resource intensive IT sector, which is suffering from high levels of employee turnover.
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