Recent Issues in Human Resource Management

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Recent Issues in Human Resource Management ISSN-2520-3657 VOL 1, Issue 1 PP, 54-68

The Impact of Multiple Types of Crises on Human Resource Management among Export Oriented Textile Industry of Pakistan Muhammad SohailRehan&&Ayaz-ul-Haq Iqra University, Islamabad, Pakistan Abstract:This research study investigates the impact of multiple types of crises on human resource management (HRM) practices. The main objective of the study is to identify and analyze the appropriate and inappropriate HRM practices adopted by the firms in the era of multiple types of crises in order to utilize the workforce at optimum level during the crises. This is a qualitative study for which data were collected through interviews. The semi structured interviews were conducted with thirty seven organizations. Primarily, the respondents were the HR managers and senior managers responsible for HR. The Data collected through interviews were further analyzed by using qualitative data analysis software Nvivo. The findings of our study indicate that the ongoing multiple types of crises affected all major HRM practices. The organizations changed their HRM practices by reducing the staffing costs. The most common HRM strategy in the wake of multiple types of crises was reducing the number of manpower through downsizing/ rightsizing. Certain training and development costs were either freeze or reduced. The performance goals were formulated more demanding and tougher. However, the rewards and compensation measures were not severely affected. Although, it is necessary to review the HRM practices, according to the crises, however, at the same time safeguarding the employees’ interests is also among the organization’s core responsibilities. Keywords:Energy Crises, Global Economic Recession, in competitiveness, HRM Practices, Pakistan, Textile Industry 1. Introduction The role of Human Resource Management in organizations during the era of multiple crises is pivotal. The impact of multiple types of crises on Pakistan’s economy in general and the industrial sector in particular is quite significant. Firms in Pakistan are facing multiple types of crises. The energy crises erupted in the year 2007 when the domestic consumers and industrial sector faced gap between demand and supply of electricity in Pakistan (Shah et al. 2013). The shortage of energy led to partial closure of industries. Various industrial plants are either redundant or unable to deliver at their optimum level. This power shortage has caused a severe decline in economic growth of the country (Lodhi& Malik, 2013). The global economic recession (GER) commenced in late 2007 and later spread worldwide in early 2008. Resultantly many countries experienced a deep economic crisis (OECD 2009). Initially, the developed countries (G-7) suffered from GER through sharp declines in consumption, investment and trade. However, later the developing countries became the victim of crises by three means: (i) banking failures and decline in domestic lending, (ii) decline in export earnings, and (iii) decline in financial flows (Naudé, 2009). This turmoil led to the closure of hundreds of thousand business organizations, resulting in unemployment surge. Firms around the world are facing workforce related challenges wrought by the GER (Bidya, 2009). In the wake of 9/11 terrorist attacks in the United States, Pakistan emerged as a front line coalition partner. Although the battle field was Afghanistan, however, Pakistan equally suffered from this war and at present the situation is still worse. In this uncertain security situation ruined the business environment of Pakistan and severely affected our economy. The country’s poor security situation failed to attract local as well as foreign direct investment (FDI). Among other problems, security problems also contributed in sluggishness of the country’s exports (Pakistan Economic Survey 2014-15). In comparison with other countries of the region, like China, India and Bangladesh, the cost of doing business in Pakistan has gone higher. The higher energy tariff, double digit inflation in the past few years, expensive labor, and unfavorable taxation have caused the increase in the cost of doing business in Pakistan. Due to these factors the Pakistani products have become incompetitive in global markets. According to Global Competitiveness Index, the Pakistan’s

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ranking has decreased from 128th in 2013-14 to 129th in 2014-15 (The Global competitiveness Report 2014-15). The successful organizations consider their workforce as the biggest source of sustainable competitive advantage. Human resources are inimitable, therefore, managing the human resources effectively play a fundamental role in the success and growth of the organizations. In the era of crises, however, the role of HRM becomes even more significant and strategic (Gunnigle et al. 2013, Shen&D’Netto 2012, and Smith &Asma 2004). HRM practices in most of the firms in Pakistan are still not as formal as in advanced countries. In Pakistan, the labor related laws are not enforced in their true letter and spirit, thus exploiting the human resources. The firms’ response to global economic crises by changing their HRM practices has been studied in various countries; however, there is a lack of empirical data. In Pakistan, there is no evidence of such research work in subject matter. Moreover, the situation in Pakistan with comparison to other countries is more complex because of other multiple types of challenges like energy crises, poor security, and higher cost of doing business. Therefore, this study is the pioneer in exploring the responses of Pakistani firms towards HRM practices during crises. This is in line with the recommendations of the authors of the most recent studies conducted worldwide e.g. Gunnigle et al. 2013, Wickramasinghe and Perera 2012, Shen and D’Netto 2012, Smith and Asma 2004. Pakistan has great potential for higher growth, which is essentially required to accommodate the swiftly growing working-age population. Pakistan has substantial natural resources which need to be exploited. A lot of scope exists to enhance the agricultural productivity. Moreover, there is a ready market available for an expanded manufacturing and service sector. However, over the past several years, Pakistan’s economy is performing significantly lower than its actual potential. The performance of Pakistan’s economy is remarkably lower in comparison to other countries of the region. Among the major challenges facing Pakistan’s economy are, lower GDP growth, trade deficit, fiscal deficit, current account deficit, lower FDI inflow, inflation, lower tax to GDP ratio, low foreign exchange reserves and increasing unemployment rate. The energy crises, the uncertain security situation and higher cost of doing business have further worsened the situation (Pakistan Economic Survey 2014-15). Foreign investors are reluctant to invest in such non conducive environment. Most of the industrial units in the country are either idle or working on their minimal capacity. Cost of doing business has gone higher in comparison to other countries of the region. The unemployment rate is rising with every succeeding year (Pakistan Economic Survey 2014-15). All these poor economic indicators are interconnected with each other. The industrial growth can turn around the poor economic situation by earning more foreign exchange through exports. The industrial growth creates more jobs and helps in increasing per capita income. Therefore, for sustainable socioeconomic growth, the role of the industrial sector is highly critical. In order to achieve the optimum level of industrial output during the crises, the role of human resource management becomes even more significant. The HRM practices if aligned successfully according to the situation may help overcome the crises; vice versa the situation may be destructive for the firms. This notion is in line with Resource Based View (RBV) presented by Barney (1991). The appropriate HRM practices tailored carefully according to the characteristics of the situation help firms to overcome the crises successfully. The adoption of HRM practices by firms during the crises and uncertain situation is an area of concern for the researchers. This research study investigates the impact of multiple types of crises on human resource management (HRM) practices. The main objective of the study is to identify and analyze the appropriate and inappropriate HRM practices adopted by the firms in the era of multiple types of crises in order to utilize the workforce at optimum level during the crises. Moreover, this study will make comparisons between the HRM practices adopted by Pakistani firms in response to crises and HRM practices of firms operating worldwide when they faced the crises.

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2. Literature Review A crisis is an event which leads to an uncertain and dangerous situation. Crises cause negative changes in economic, political, security and societal affairs. Pakistan is suffering from energy crises, the uncertain security situation, being in-competitive due to higher cost of doing business and economic recession. All these crises caused slowdown in economic activities of the country (Pakistan Economic Survey 2014-15). This slowdown in economic activity results in a fall of macroeconomic indicators like investment spending, GDP, employment, household income, capacity utilization, and business profits, while unemployment, bankruptcies, and inflation rate rise. The nature of crises in Pakistan is slightly different from global crises. The most recent global economic recession of 2007-09 has been termed as “Great Recession”. The effects of recent global economic recession are worse than the great depression of the 1930s. In comparison to the great depression of 1930s, the current global economic recession has more adversely affected the world trade, industrial output and world stock markets (Eichengreen& O’Rourke, 2009). The magnitude of GER 2007-09 is worldwide, ranging from developing economies/ countries with developing economies (Naudé, 2009). In this scenario, the firms review their existing strategies by adopting cost reduction strategies so as to successfully cope with the crises. In their attempt to operate with scarce resources, firms alter their financial choices, change marketing priorities, review business strategies, and also review HRM practices. The preliminary investigation reveals that the GER 2007-09 posits severe challenges to firms in all dimensions of management, particularly marketing, financial, strategic, and HRM. For any successful firm, its human resources are the most vital sourceof sustainable competitive advantage. The organization’s ability to attract, select, develop, motivate, and retain competent employees is very important for its success (Park, Gardner, & Wright, 2004). In order to successfully cope with the situation, firms need to promptly and effectively respond by using the HRM practices. Jones and Wright (1992) argue that High Performance Work Practices can improve the knowledge, skills, and abilities of an organization’s employees, reduce shirking, increase employees’ motivation, and increase retention of competent employees while forcing nonperformers to quit the organization. These practices include comprehensive recruitment & selection, incentive compensation & performance management systems, and employee training and involvement. In this way, firms develop a team of performance oriented employees, who not only outperform and ensure firms’ survival during challenging times but also become a sustainable source of competitive advantage. Cascio (1991) argued that for sustained competitive advantage, organizations need to review and adjust their certain HRM practices according to the changing situation. Park et al. (2004) has supported the argument and further proposed that firms should adjust their practices and review their skills sets to meet and align themselves with globalization, economic upheaval, increased competition, and technological changes. The most recent available literature on the crises faced by different economies is primarily from the global economic recession 2007-09. The literature suggests that the global economic recession of 2007-09 has affected the HRM practices worldwide. Many organizations around the world opted large scale downsizing because of business closures which led to increase in unemployment. Organizations had left with no option but to adopt different HRM practices such as outsourcing, flexible work schedules and reduction in training expenses. In a study conducted in China, Shen and D’Netto (2012) found that the majority of the respondent organizations (export oriented industries) intended to reduce their workforce and also freeze further recruitment. A substantial number of organizations increased the use of flexible working hours, however, only a small number of firms intended to expand their workforce during global economic recession. From this research, it is clear that the organizations adopted the policy of reduction in expenditures. The main objective of this approach was to survive, the organization from the crises by reducing staffing costs. In another study conducted in Sri Lank,

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Wickramasinghe and Perera (2012) found that respondent organizations (globally distributed software development firms) not only brought declines in new hires, but also made layoffs as a cost reduction strategy in the face of global economic recession. Similarly Gunnigle et al. (2013) conducted a study in Ireland and found that respondent organizations MNCs (Multinational companies) are heavily relying on measures such as downsizing, redundancies, short time working, temporary layoffs and unpaid leaves to bring staffing levels downwards. In another study conducted by Malik (2013) in India, it was found that respondent firms (Indian IT Sector) largely opted for hard HRM approaches including cutbacks in hiring plans and recruitment freezes. However, in another study conducted by Varkkey and Kumar (2013) in India, it was found that respondent firms (Indian diamond cutting and polishing firms) reacted differently by shortening the work week and extending the unpaid leaves instead of large scale layoffs. The employees of these firms responded positively and firms’ financial performance after recovery period was unprecedented. Foder and Poor (2009) also conducted a study in Hungary and Slovakia and found that most of the respondent firms along with freezing new hires also carried out downsizing. However, some organizations adopted the policy of talent acquisition and internal restructuring as they believe that it will provide a healthy return once the recovery is started (Kim, 2010). So focusing on recruitment and selection among the other HRM practices, the preliminary investigation reveals that the majority of the firms around the world opted various strategies to reduce staffing costs. These strategies include freezing new hires, layoffs, Flexi time, unpaid leaves, redundancies, shorter work timings etc. During the era of crises in the form of global economic recession, most of the firms around the world were reluctant to invest time and money in training programs. As a cost reduction strategy, firms find them at ease in reducing and freezing training expenditure (Barney & Wright, 1998). Shen and D’Netto (2012) found that respondent organizations (export oriented industries in China) reduced their training budgets. Moreover, the focus is shifted from off the job training to on the job training programs as on the job/ in house training programs cost less expensive relatively. Wickramasinghe and Perera (2012) in their study found that respondent organizations (globally distributed software development firms of Sri Lanka) reduced their training budgets during global economic recession, however, large organizations provided more training opportunities as compared to small and medium size organizations. This study indicates that firms’ cost reduction strategies in terms of training expenditure vary from firm’s size (large to medium and small size organizations) as large size organizations carried out less reduction in the training budget than smaller organizations. Similarly, Gunnigle et al. (2013) mentioned in their study on MNCs (operating in Ireland) that substantial decline has been reported in T&D expenditure during global economic recession. However, concurrently some MNCs have focused more on particular types of management and leadership training. This reflects that while some organizations opt to decline the training budget as a cost reduction strategy during crises, others take the crises as opportunities and invest more time and money for positive future outcomes. A quite different strategy regarding training during global economic recession as Varkkey and Kumar (2013) mentioned that some firms (Indian diamond cutting and polishing firms) planned and implemented the skill up-gradation programs for unskilled and semi-skilled employees through in house training by skillful employees. In this way, the organization invested time and resources in engaging workforce in a productive manner. In another study, Malik (2013) found that respondent organizations (Indian IT sector) adopted the reduction in the training budget as a cost reduction strategy during the global economic recession. In a large scale survey of HRM practices in MNCs in Australia, Boyle and McDonnell (2013) revealed that majority of the respondent firms reduced their training expenditure in the wake of global economic recession. This most common approach of declining the training expenditure by, firms around the world suggests that firms feel the convenience in pursuing this

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particular cost reduction strategy. Although, this strategy helps firms in controlling costs in the short run, however, in the long run, its consequences may not be favorable for the firms particularly once the recovery period starts after crises. Therefore, the decision of reviewing the training budget warrants careful consideration of management. Though, some firms have maintained their training programs and focused more on skill enhancement of their employees through on the job training programs. This strategy of on the job training may not be so expensive and may also be useful to the firm in the recovery period after crises. As the firms review their HRM practices to confront the challenges of global economic recession, performance management system being a vital component of HRM practices is also reviewed (Bidya, 2009). The importance of performance management systems is evident from the notion that it affects firms’ decision regarding hiring, downsizing, training, rewards and career growth. Establishing a performance oriented appraisal and compensation system ensures the development and retention of core employees (Park, Gardner, & Wright, 2004). Shen and D’Netto (2012) in their study on export oriented industries of China described that respondent firms continued to conduct performance appraisal during the global economic recession. However, the majority of the firms reduced the individual performance goals, keeping in view the impact of the economic situation on performance goals. In this study, there was no organization that discontinued conducting the performance appraisals as the managers believed that the results of performance appraisal determine the pay and layoff decisions. Moreover the frequency of conducting performance appraisal was consistent with previous routine. Similarly Wickramasinghe and Perera (2012) in their study of globally distributed software development firms in Sri Lank also explored the performance management system during the global economic recession. In this study, the authors investigated the difference in performance management practices adopted by firms with respect to their size (large, medium and small). However, the findings imply that there is no significant difference in performance management strategies in terms of firms’ size. Moreover, the effective performance management during recession significantly predicts employee’s happiness at work. Gunnigle et al. (2013) mentioned in their study that MNCs’ key responses to global economic recession in Ireland are downsizing, reduction in working time, layoffs, and changes in reward systems. For the purpose of making corrections and rational decision, the HR function needs to evaluate the individual as well as team performance. In the absence of performance management system, the MNCs may not be in the position to make above mentioned decisions during the global economic recession. In another study in India, Malik (2013) found that respondent organizations (IT sector) vigorously carried out performance management practices in order to reduce their workforce. The author asserted that during the economic crises, the presence of opportunistic performance management practices is not surprising. Foder and Poor (2009) in their study conducted in Hungary and Slovakia also maintained that the global economic recession caused changes in performance management practices of the firms. The literature suggests that performance management practices have been affected by the crises of global economic recession worldwide. The literature suggests that during the global economic recession when firms adopt different cost reduction strategies, the rewards and benefits are also reviewed. The financial rewards of all kinds (salary, bonuses, benefits, incentives, etc.) provided by firms to their employees may become limited during recession (Mohrman& Worley, 2009). However, the literature suggests that in view of global economic recession, firms responded differently in term of rewards and benefits strategy. In this scenario of crises, firms have to make a very tough decision regarding financial rewards and benefits as on one hand they face scarcity of financial resources and on the other hand employees low morale and motivation if their rewards and benefits are reduced. Shen and D’Netto (2012) in their study on export oriented industries of China described that the majority of the respondent firms maintained their current pay level during the global economic recession. However, there was a tendency to reduce fringe benefits. This seems a quite balanced strategy as reducing pay may de-motivate and cause a turnover of skilled and talented

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workforce. In another study, Wickramasinghe and Perera (2012) mentioned that respondent organizations (globally distributed software development firms in Sri Lanka) took the rewards deduction initiatives by reducing both salary and benefits during global economic recession. The authors found that reduction in financial rewards and benefits significantly predict decline in happiness at work during the recession. This argument reflects the drawbacks of reduction in financial rewards and benefits, therefore the firms need to focus on alternative sources of rewards such as recognition. Similarly, Gunnigle et al. (2013) described that in their attempt to labor cost reduction during global economic recession (GER), MNCs in Ireland initiated various measures which include new pay scales, revamped profit share scheme, short time working, voluntary redundancies, and reduction in bonuses, pay cuts and pay freezes. These measures might have favored firms in adjusting their financial position, however, for employees’ perspective, their effect is quite unfavorable. In the context of GER, Varkkey and Kumar (2013) conducted a study on Indian diamond cutting and polishing firms and described that firms continued to pay the base income to employees. However, their incentive and other fringe benefits were suspended. Later, the firms outperformed in recovery period, which reflects that employees tend to reciprocate the fair treatment they received during crises. Similarly, Malik (2013) also conducted a study on the Indian IT sector and described that most of the firms adopted the strategy of pay freezes and reduction in benefits and incentives. Fodor & Poor (2009) reported that the strategy of pay freeze was also adopted by firms in Hungary and Slovakia during the global economic recession. The literature suggests that firms around the world reduced financial rewards and benefits in their attempt to labor cost reduction strategy, however, there is a dearth of empirical evidence that to what extent it has affected the employees. Preliminary investigation and published data revealed that the crises of global economic recession have caused the firms to review their HRM practices. Due to the challenge of global economic slowdown, the firms around the world have responded by cutting their certain costs. The cost cutting strategies by firms have been opting to ensure their survival and competitiveness in global markets. Firms have changed their HRM practices by reviewing recruitment and selection measures, training and development measures, performance appraisal measures and rewards & compensation measures. The changed HRM practices have certain implications and repercussions for all stakeholders, including firms and employees. 3. Method This is a qualitative study and can be categorized as exploratory research. In this study case study method has been employed. The export oriented Textile sector of Pakistan has been selected as target industries for the purpose of data collection. Textile industry is a mainstay of Pakistan’s economy. The textile industry’s share of GDP is 8.5%, which is almost $ 20 billion. The textile industry has the largest share of 55% in Pakistan’s total exports. The contribution of this industry in earning valuable foreign exchange for the country is unprecedented. Textile sector carries 38% of manufacturing sector employment. Almost 150 million people are employed (directly or indirectly) in this industry. The Textile industry of Pakistan has potential to double its exports and employment level (Textile Policy 2014-19). Talking about sample size for this study, thirty seven different textile units spread over central Punjab were visited and interviewed. These textile units were diverse in nature in term of their production ranging from basic/ raw textile products to value added products. The respondents of this study were HR Managers and senior managers responsible for HRM. In this study the Snowball sampling technique was adopted. Snowball sampling is used most frequently to conduct qualitative research, primarily through interviews. In this qualitative study semi structured interviewing technique was adopted. The respondents were asked to express their thoughts on each question provided. Moreover, the researchers used intervening questions also. The interviews were divided in two parts. In Part-I, Textile

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industry’s response towards multiple types of crises was solicited, whereas, in Part-II questions specific to HRM practices in response to these crises were asked. Questions asked in Part-I regarding multiple types of crises were composed and arranged on the basis of the viewpoints of Textile industry associations, Textile journals, newspaper articles, economic and trade reports by Government departments including Pakistan Bureau of Statistics (PBS), Ministry of Finance and Ministry of Textiles. Questions asked in Part-II regarding HRM practices was adapted from most recent research studies carried out in China, India and Sri Lanka. In this regard, research study carried out in China by Shen and D’Netto (2012) is worth mentioning. 4. Data Analysis Procedure In this study, the researchers conducted in depth face to face interviews with the respondents from Textile industry. The duration of the interviews lasted between 30 to 35 minutes. The respondents were asked predetermined basic questions as well as intervening questions arising from the responses of interviewees. The information provided by the respondents was noted on interview sheets designed for the same purpose. Later the data were transcribed in textual form by using MS Word. Different themes were identified from the data. The textual data were coded into different related themes. To analyze the data collected through interviews, Qualitative data analysis software Nvivo was used for various data coding and thematic analysis. Nvivo offers a wide range of techniques such as Coding Nodes, Word Tree, Word Tag Clouds and Tree Maps. These techniques were used for the validation of different themes of the study. For the purpose of getting more clarity, the qualitative data analysis was carried out in two parts by using Nvivo. In our first part, analysis of multiple types of crises was presented by forming a set of the major challenges. Whereas, in the second part of our analysis the data regarding major HRM measures were analyzed by using different techniques available in Nvivo. At the end, the findings from both parts were integrated to deduce the results. 5. Findings and Discussion This section covers reporting of the results of this exploratory study. From the interviews, following themes were extracted. 5.1 Identification of Multiple types of Crises The major crises facing Textile industry as reported by organizations during the interviews are energy shortage, higher energy tariff, higher cost of doing business, in-competitiveness, nonconducive business environment, unfavorable taxation, the poor security situation, expensive raw material, slow recovery from global economic recession, lower quality raw material, lack of skilled manpower, outdated machinery & equipment and higher labor cost. Figure 1: Word Cloud is illustrating the “Multiple Types of Crises”

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“Word Cloud” shows the bunch of words in different sizes. The size of each word depends on its frequency of repetition in textual data. Words which are frequently used and discussed are reported large in size. Based upon data provided by the organizations, figure depicted above shows “Word Cloud” of major crises being faced by Textile Industry. However, this may not be sufficient for a results inference until supported by various other techniques available in Nvivo. While applying query of “Word Cloud” on any particular Node in Nvivo, the summary of words frequency is also generated in tabular form along with such image. In order to find out how Textile industry responded to ongoing multiple types of crises in terms of HRM practices, interviews have been conducted on four major HRM practices. These four major HRM practices include Recruitment and Selection measures, Training and Development measures, Performance Appraisal measures, and Rewards & Compensation measures. 5.2 Recruitment and Selection Measures The majority of the organizations from Textile industry have been severely affected by the long standing crises. Many organizations were either struggling for survival or had diminished from the market. However, few organizations had molded themselves according to the present tough environment by adopting different HRM and Marketing strategies. Figure 2. Word Cloud is illustrating the “Recruitment & Selection Measures”

Figure 3. Word Tree illustrating the “Recruitment & Selection Measures”

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Figure 4. Tree Map illustrates the “Recruitment & Selection Measures”

In the era of crises, various firms reviewed their HRM practices by adopting cost cutting strategies. The organizations from Textile sector struggled to cut their labor costs by reducing their number of employees. A large number of small and medium size textile units have been either fully or partially closed down by reducing their operations from three shifts to one shift only. Subsequently, this situation has compelled the firms to lay off a large number of their workforce. (PTJ, February 2008). From the respondent organizations, some had already carried out downsizing/ rightsizing while most of the remaining organizations were seriously looking into this option and may reduce their workforce in the near future. “Word Cloud” regarding recruitment and selection measures taken by the Textile Industry in response to present crises is depicted above. Specific to downsizing/ rightsizing strategy, figure given above further explains the attraction of this option for management. The Word Tree suggests the significance of downsizing measure during the era of crises. Besides downsizing strategy in response to the crises, organizations adopted other strategies as well. These strategies include, freeze of new hiring, no further expansion in the workforce and keeping the workforce level below than installed capacity. The Tree Map on overall strategies adopted by the Textile industry is also presented. In this Tree Map, it is obvious that a large number of organizations were operating by keeping the workforce level below than installed capacity. The workforce has not been expanded by the organizations and fresh recruitment was almost frozen. 5.3 Training and Development Measures In the Textile sector, the compliance related training programs like HSE (Health Safety and Environment) are conducted at workplaces by various public sector and private organizations. Training for skill enhancement of employees is, however the prerogative of the management of the concerned organization. Since these training programs involve time and money expenses, therefore, organizations responded in different ways towards training and development measures during the era of multiple types of crises. Among the organizations interviewed, various organizations maintained their training budget. However, a substantial number of organizations decreased their training expenses as well. Since majority of the respondent organizations maintained their training budgets, however, it is pertinent to mention that a large number of organizations had no formal off the job training programs which may involve any major expenses. While collecting data through interviews with managers of Textile industry, it is realized that management always endeavors to bring reductions in certain expenses including training costs.

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Figure 5.Tree, Map and Word Cloud is illustrating the “Training & Development Measures”

Word Cloud demonstrates the concern of the various units of Textile industry’s management regarding cutting the training expenses. The managers argue that they take such measures to bring down per unit cost of their product so that their products become competitive in global markets. While organizations felt that off the job training was expensive, therefore reductions in off the job training will be useful to cut the expenses. The larger organizations that had formal training programs continued off the job training, however, they limited these programs only to managerial level employees in production and marketing departments. Due to the crises, the non-managerial employees and departments other than production and marketing were not provided training opportunities. 5.4 Performance Appraisal Measures The organizations continued conducting performance appraisal in the era of crises and no organization stopped conducting performance appraisal. The management in almost all units have consensus that performance appraisal outcomes are highly linked to certain HRM decisions like pay increase, contract termination, promotion and training opportunities. A large number of respondents also reported that performance appraisal practice in their organizations is continues in the same way as before eruption of the crises. As far as frequency of performance appraisal is concerned, the majority of the organizations conducted performance appraisal on an annual basis. However, the performance of production and Marketing related persons was frequently monitored either on task to task basis or on time to time basis. Most of the organizations have maintained the individual performance goals, while some organizations have increased the individual performance goals of their employees. Figure 6.Word Cloud & Tree Map illustrating the “Performance Appraisal Measures”

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On the question of individual performance goals, they'refinding a common response from managers that in the era of multiple types of challenges, the individual performance goals need to be more stringent, more demanding and tougher as compared to a normal situation. No organization reported reduction in individual performance goals due to the crises faced by Textile industry. As shared by most of the interviewees, the performance goals for production and marketing related employees have been increased or formulated more demanding. The figure shows Word Cloud of performance and appraisal measures describing the most frequent themes. The response indicates that performance appraisal measures in Textile industry continued with even greater emphasis during the era of multiple types of crises. These results indicate that organizations in Textile industry recognized the importance of performance appraisal, even during the era of multiple types of crises. 5.5 Rewards and Compensation Measures In spite of the multiple types of the crises, the organizations maintained the current pay of their employees. Except a few, organizations did not freeze pay increments of their employees. In most of the organizations, the base pay and performance pay have been either increased or maintained. Figure 7. Tree Map illustrates the “Rewards & Compensation Measures”

Figure 8. Word Cloud is illustrating the “Rewards & Compensation Measures”

A large number of interviewees shared that the increasing base pay of employees are also an obligation on organizations as government has set a threshold of minimum wage level. Performance based pay in most of the organizations has been maintained, however, a considerable number of organizations have increased performance based pay to promote performance oriented culture. We found that majority of the firm’s mentioned already offered fringe benefits to their employees. A very small number of respondent organizations reduced

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the fringe benefits. Word Cloud presents different themes which emerged during interviews regarding rewards and compensation measures. In response to a supplementary question regarding the labor cost in Pakistan, most of the interviewees responded that labor cost in Pakistan is higher as compared to regional players which is not good to be competitive in the global market. The majority (2/3) of the organizations maintained the promotion opportunity rate for their employees. However, some organizations reduced the promotion opportunities, but those are less in numbers. Overall the compensation and reward measures adopted by the organizations in the era of multiple types of crises remained unaffected. However, firms either stopped paying the annual bonuses or reduced their financial worth. Most of the organizations responded to increasing inflation in Pakistan’s economy by increasing the pay level of their workforce. Figure 9. Model generated through Nvivo illustrating the relationship between “Multiple type of Crises and HRM Practices”

The above model generated through Nvivo indicates the relationship between multiple types of crises and HRM practices. Present the challenges being faced by the industry, including energy shortage, higher energy tariff, in-competitiveness, higher cost of doing business, the effects of global economic recession, the poor security situation, unfavorable taxation and lack of skilled manpower create a non-conducive business environment and forms a set of multiple types of crises. These multiple types of crises have severely affected the HRM practices in Textile industry of Pakistan. The organizations have responded to multiple types of crises by changing all major HRM practices, including Recruitment and Selection, Training and Development, Performance Appraisal, and Rewards and Compensation measures. 6. Conclusion The findings of the study indicate that HRM strategies are among the core strategies adopted by the organizations to mitigate the effect of multiple types of crises. In response to the multiple types of crises, organizations reduced the size of their workforce. Hence the retrenchment measures reduced staffing costs significantly. Rigorous and frequent performance appraisals and maintaining the rewards and benefits during the era of crisis helped business survival. The concept of training as an investment has not been practically followed by any organization as no organization increased training expenditure in the face of multiple types of crises. The training

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budget was either decreased or maintained by the respondent organizations. This strategy lacks future vision of organizational growth. 7. Practical Implications Although in the short run the overall HRM strategies proved useful for the organizations, however, employees may perceive these measures against their interests. The HRM measures adopted specially shrinking the size of the workforce are likely to have a negative impact on the morale of the remaining employees. The implementation of the new HRM measures in response to the multiple types of crises is likely to result in decreased organizational support and this in turn may have a negative effect on employee behavior and organizational commitment. The act of salary maintenance by organizations during the tough and challenging era is quite encouraging. This measure is essential to boost employee morale and ensure organizational sustainability. 8. Recommendations While facing the multiple types of crises, organizations need to respond in a rational and prudent way. Instead of simply adopting the cost cutting strategy, management needs to keep in mind the long term perspective of the organization’s as well as employees’ well-being. There should be budgeted allocation to confront rough times so that staffing costs, training costs, compensation and other benefits may not suffer. The organizations which care their employees during the rough and tough time are perceived supportive by their employees and during recovery period these organizations come out of the crises more quickly (Rumlet, 2008). It is recommended that organizations should foster value addition in their respective units. For this purpose the HRM strategies such as talent acquisition and retention, support for training and development, employee involvement, open communication, performance appraisals and salary maintenance are essential to be followed. 9. Future Research This study can be further extended by exploring the impact of changed HRM practices on employees’ perceived organizational support (POS), which is a basic construct of organizational support theory (OST). The in depth study of this dimension may also contribute to Organizational Support Theory. It is further recommended that the impact of changed HRM practices may also be explored on employees’ OCB (organizational citizenship behavior), employees’ productivity and employees’ motivation.

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