Article review on

How the best Indian companies drive

performance by investing in people
by Peter Cappelli, Harbir Singh, Jitendra V. Singh and Michael Useem

Submitted to Faculty:
Dr. Manoj Bhagat
Lal Bahadur Shastri Institute of Management, New Delhi

Submitted by:
Smriti Krishna (43/10)
Section A

Date of Submission: November 12th, 2010

Introduction
Practices related to companies performances vary across cultures and
geographical boundaries. This piece of the Harvard Business Review on How
the best Indian companies drive performance by investing in people
highlights the way Leaders of highly-regarded Indian companies focus their
energies

and

how

their

practices

are

different

from

their

western

counterparts.
To discover how Indian leaders drive their organizations to high performance,
research team interviewed 98 of the largest India-based companies like
Infosys, Reliance Industry, Tata, Mahindra & Mahindra, Aventis pharma etc.
They give credit of their success not to their strategy or financial markets or
mergers or acquisitions but to their employees. Unlike the Western
counterparts Indian companies make aggressive investment in employment
development and strive for high level of employee engagement & openness.
Leaders of the most successful companies do engage with their country,
culture and employee and believe in investing in their people.
Vineet Nayar, CEO of Indian IT service giant HCL have a strong believe in the
motto of the company which is Employees first, Customers second.
Employees used to evaluate their bosses & bosses bosses which were being
posted on the firms intranet.

Leading the India way

Our survey revealed an important difference between Indian and
Western companies leaders in how they focus their energy. Indian leaders
prioritize their key responsibilities as:

1.
2.
3.
4.

Chief input for business strategy

Keeper of organizational culture
Guide, teacher or role model for employees
Representatives of owner and investor interests

According to the priority stated by Indian leaders shareholders is given forth

place whereas shareholders is number one concern for U.S. executives. This
low ranking of shareholders is held for global companies as well which are
exposed to international capital markets and even listed on U.S. stock
exchange. Although Indian leaders give intense focus on culture and human
capital they cite strategy as their top priority.

Motivating employees
As have stated earlier employees are the most precious asset of Indian
companies and they believe in investing in their employees. However,
motivating the employees and provide them the job satisfaction helps the
organization improve its efficiency. It is done in four specific ways:
1. Creating sense of mission: The best of Indian companies have a
social mission and a sense of national purpose because it helps
employees find meaning to their work. The companies are developing
Corporate

Social

Responsibilities

(CSR)

and

it

is

becoming

reputational asset of a company.

2. Engaging

through

transparency

and

accountability:

Indian

leaders build employee commitment by encouraging openness.

Company looks after the interest of the employees and their families
and in turn wants the same. Vineet Nayar has employed 360 degree
review for managers. In this process the reviews are taken from the
boss, the co-workers and also from the subordinates.

3. Empowering through communication: company give opportunity

to the employees to communicate their grievances, suggestions and
appreciation to the management. Such communication helps building
employee involvement with the company and also helps in sorting out
many problems faced by the company.
4. Investing in training: 25% of the new hires in United States are not
given any kind of training in first 2 years of employment whereas
Indian companies takes an aggressive approach to training. Indian IT
Industry provides new hires with about 60 days of formal training. Tata
Consultancy Services (TCS) has a seven-month training program for
science graduates in addition TCS gives a formal training of 14 days
every year. Business process outsourcing and call centers provide 30
days of training while retail companies require 20 days of training.
Pharmaceutical company, Dr. Reddys Laboratories put outsides hires
through a year training program.
The article gives an overview of the performance analysis and energy focus
of Indian Companies in contrast to Western counterparts. Most of the best
Indian companies unlike western companies invest a huge amount in their
employees and consider it as the reason of their high performance. Very
true, giving incentives to the employees and time to time rewards and
recognition leads to better job satisfaction among the employees which
hence increases the productivity and efficiency of the company and
decreases absenteeism.