Increasing globalisation and competitiveness have brought to the fore the importance of effective human resource management for national and international organisations. In recent years, there has been a remarkable development in HRM throughout the world, however, the majority of research has focused on HRM in advanced industrial societies. The challenges of management of HRs in developing countries are complex and demanding.
As the world develops into a ‘global business village’, there is a greater need to know how managers in various parts of the world cope with issues and problems related to management of human resources. Thus, we must highlight the major factors that impact on HRM policies and practices in different contexts. Pakistan is the seventh most populous country of the world. At 2.18 percent, it has one of the world’s highest population growth rates, such that in the next decade its population is expected to surpass 260 million. The total employed labor force is estimated at 38.18 million, which is only 27.66 percent of the total population. In effect, 41 percent of the total population is under the age of 14. Also, due to slow economic growth for the past two years, well over 2.36 million people are unemployed.
The economy is agrarian in nature as 46 percent of the labor force is employed in the agricultural sector. Since the early 1990s, Pakistan has been implementing a comprehensive program of deregulation and fostering a climate for private investment by opening up activities previously monopolized by the public sector. Bold steps have been taken to privatize the entire public sector, including financial institutions and industrial units and lucrative incentives have been offered for private investment. These efforts, aimed at reversing the trend of nationalization and improving economic growth, have created a suitable business environment in the country. Public sector organizations have been marked by a passive management culture. Political patronage rather than sound business decisions have often determined their operations. Therefore, from the onset, the private sector was encouraged to develop forward-looking management systems. However, it was not until 1997 that the government undertook the task of changing the prevailing corporate culture of public sector enterprises by appointing professional teams of managers at the top-most hierarchical levels whose task was to change the HRM culture by making it meritocratic, decentralized and responsive to employees’ needs , and outlining a unique program that distinctly outlined the need to refashion a new work culture whose building blocks are characterized by innovation, quality and discipline.
The initial success of invigorating the economy was dampened by nuclear tests, subsequent imposition of sanctions by the G-7 countries and frequent changes of governments, with the result that the economy started to stagnate and the public began to grow disillusioned with the state of affairs.
HRM in Pakistan is passing though an embryonic stage.A majority of businesses in Pakistan (both local and foreign) have restructured their personnel divisions as human resource divisions. However, they do not provide any information about what this change entails. Very few organizations have adopted an integrated and focused approach to HRM, taking cultural and structural changes into consideration. In these organizations the role of HRM had been broadened, HR departments had been brought up to par with other business areas and communication channels had been opened up.
Whereas, most of the organizations were following a piecemeal approach whereby only certain HR activities had been introduced in installments. Despite their efforts, most of these organizations suffer from lack of communication, a gap between managers’ promises and implementation of policies and an inconsistency of HRM practices among employees and the centralized structure of the organizations. Employees have expressed dissatisfaction with the existing norms. They clearly understood the vital role that HRM played in adding value to the work environment and building their long-term careers and they aspired for a pro-active, professional and participatory approach to people management.
Over the years, a number of researchers have highlighted the significance of national factors (like national culture, work-related values and external environment) in understanding HRM systems. Research has shown that social institutions such as family, education through socialization process influence companies’ strategies and organizational practices in a systematic way, with the result that companies’ structures and processes reflect typical national patterns .
Pakistani culture is a mixture of religion, Indian origins, British inheritance and American influences. It has largely been observed that Pakistani managers want to follow American management style. American management is considered to be more progressive and result-oriented, whereas British managers are hailed as slow and bureaucratic, trademarks which the Pakistani civil service seems to have inherited from them.
The corporate culture of Pakistan, like many developing countries, is such that there is a general unquestioning respect for authority, people are integrated as cohesive groups and are emotional. Organizations have a formal and hierarchical structure. Policies formulated at head offices are cascaded down to each office/division for a uniformity of objectives and culture. Employees cannot approach their HR departments directly. Going through the proper channel is always stressed. Autonomy given to employees is low and they are not often encouraged to rely on themselves or to learn new things. There is a communication gap between management and employees. Typically, HR policies are made in isolation; feedback from employees during formulation process or afterwards is not sought. Employees seldom know what decisions are being made at their HR departments as communication between employees and HR departments is kept to a minimum. The ‘talk’ of management does not always match their ‘walk’. HR managers are generally praised for their policies but employees expressed dissatisfaction with their role and impact.
In 1990, a government privatization program was introduced that was deemed a success as investors’ interest was sparked and many new enterprises especially in the banking sector were set up. At the same time, multinationals that had long been operating with a low profile, started reinvesting in the market through expansion of services or diversification of products. The government also took initiatives to foster a business-driven culture and to encourage the use of professional and modern management practices. This created a healthy, profitable and competitive business environment making the private sector more progressive than the public sector.
It is apparent that Pakistani organizations and their culture are undergoing a dramatic change. The public sector organizations that were run on colonial patterns are being revamped. The private sector is a valuable addition to the business environment, it has added impetus to the economy, made it more competitive and added a fresh perspective to HRM systems.
HRM holds a promise for employees in Pakistan and is the way forward. Employees recognize the significant role of HRM and aspire towards it. There seems to be a large amount of room for growth for HRM activities as the economy develops further. However, it must be emphasized that the current state of affairs—the uncertain political/economic environment is not conducive to development. Therefore, political stability, along with rules of good governance, should be achieved and sustained if Pakistan wants to recognize its people’s needs to enhance their productivity in order to maximize the full potential of the economy.