National Conference on “Corporate Social Responsibility Issues &

challenges”Being organized by

Baba Saheb Gawde Institute of Management Studies, Maratha Mandir, Mumbai

On 26th March’ 2011.Title of the paper

THE ROLE OF HUMAN RESOURCE MANAGEMENT IN CORPORATE SOCIAL RESPONSIBILITY

ByDr. Mohammad Khalil Ahmed

Head, Department of Commerce, Burhani college of Com, Arts, Media & Management, Mazagaon, Mumbai 400010

&Prof. Mehtab Ahmed

Faculty BMS, Burhani college of Com, Arts, Media & Management, Mazagaon, VisitingFaculty: BIMSR, Mazagaon, Mumbai-10

IntroductionThe purpose of this paper is to develop a conceptual model of responsible human resource management (HRM) which is based on an integration of corporate social responsibility (CSR) with HRM. We argue that CSR poses a number of challenges for HRM and for leadership in organisations. Conventionally, the HRM paradigm is based on a rational strategic managementframework which is consistent with traditional economic analysis. This paradigm is limited in circumstances where organisations seek to behave responsibly with regard to a range of internal and external stakeholders and seek to take a longer term perspective.

OBJECTIVES OF THE STUDY:

• To understand HR Department role in promoting CSR.

• To understand the role of CSR in gaining competitive advantage to the Organization.

• To understand different CSR activities in Indian corporates

SCOPE OF THE STUDY

Scope of the study is limited to study the role of HR department in building CSR and mostly

focusing on the different CSR activities carried out by Indian corporates.

METHODOLOGY:

The study was conducted using both primary and secondary data.

Secondary dataIt was collected from various books, articles,

journals and blogs on CSR

SUSTAINABLE HUMAN RESOURCE MANAGEMENT IS THE CONTRIBUTION HRM CAN

MAKE TO SUSTAINABLE DEVELOPMENT

CSR-HR = PR

If employees are not engaged, corporate social responsibility becomes an exercise in public

relations. The credibility of an organization will become damaged when it becomes evident the

company is not “ walking the talk”

Corporate Social Responsibility

• CSR is a concept that frequently overlaps with similar approaches such as corporate sustainability, corporate sustainable development, corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance.

Contd..In 2001, Tata Energy Research Institute (TERI) conducted a

survey called” Altered Images: State of CSR in India Poll” and identified four models:

• Ethical model: as suggested by Mahatma Gandhi where enterprises voluntarily committed to public welfare and

participated in national building.• Statist model: as developed by Jawaharlal Nehru which

called for state ownership of big business and discharging CSR.• Liberal Model popularized by Milton Friedman supporting

private ownership of business.• Stakeholders Model championed by R. Edward Freeman

which advocated that business should respond to stakeholder’s needs.

The argument for HR people taking the CSR agenda seriously can be summarized as follows:

• Companies are increasingly required to take account of the impact of their activities on society.

• The credibility of CSR is dependent on delivery, not rhetoric.• HR is responsible for many of the key systems and processes

(e.g. recruitment, training, communications) on which effective delivery depends

• HR people have relevant knowledge and skills in relation to organizational learning and cultural change.

• Managing trust and risk raises fundamental issues about how people are managed.

• Employees are a key stakeholder in any CSR program." (CIPD, 2002, p. 15)

Corporate Social Responsibilities in relation to Indian Corporates:

Nearly all leading corporates in India are involved in corporate social responsibility (CSR) programmes in areas like education, health, livelihood creation, skill

development, and empowerment of weaker sections of the society. Notable efforts have come from the Tata

Group, Infosys, Bharti Enterprises, ITC Welcome group, Indian Oil Corporation among others.

Contd..

• According to a study undertaken by an industry body in June 2009, which studied the CSR activities of 300 corporate houses, corporate India has spread its CSR activities across 20 states and Union territories, with Maharashtra gaining the most from them. About 36 per cent of the CSR activities are concentrated in the state, followed by about 12 per cent in Gujarat, 10 per cent in Delhi and 9 per cent in Tamil Nadu.

• The companies have on an aggregate, identified 26 different themes for their CSR initiatives. Of these 26 schemes, community welfare tops the list, followed by education, the environment, health, as well as rural development.

Contd..

• Although corporate India is involved in CSR activities, the central government is working on a framework for quantifying the CSR initiatives of companies to promote them further.

• As per the guidelines, companies with net profit of less than US$ 22.5 million will earmark 3-5 per cent of profit for CSR, companies with net profit of between US$ 22.5 million - US$ 112.5 million, will utilize 2-3 per cent for CSR activities and companies with net profit of over US$ 112.5 million will spend 0.5-2 per cent of net profits for CSR.

In India

• Reliance Industries and two Tata Group firms—Tata Motors and Tata Steel—are the country's most admired companies for their corporate social responsibility initiatives, according to a Nielsen survey released in May 2009.

HR’S ROLE IN PROMOTING CORPORATE SOCIAL RESPONSIBILITY

• HR professionals need to co-ordinate the CSR activities and demonstrate company‘s commitment to CSR. Effective CSR depends on being seen as important

throughout an organization. HR professional need to include CSR in an organizational culture to make a

change to actions and attitudes and ensure the support of the top team which is critical factor to

success. HR should communicate ,implement ideas, policies, cultural and behavioural change across

organization. HR is also responsible for the key systems and processes underpinning effective delivery.

Contd..

• Human Resources technology can help with a Corporate Social Responsibility program, including reducing the company‘s carbon footprint to benefit the planet. Start with these areas:

• Implement and encourage green practices.• Foster a culture of social responsibility. • Celebrate successes.• Share and communicate the value of corporate

social responsibility to employees and the community

THE BASICS OF INTEGRATING CSR INTO HR MANAGEMENT

• Step 1: Vision, mission, values and CSR strategy development

• Step 2: Employee codes of conduct• Step 3: Workforce planning and recruitment• Step 4: Orientation, training and competency

development• Step 5: Compensation and performance

management• Step 6: Change management and corporate

culture

Contd..

• Step 7: Employee involvement and participation.

• Step 8: CSR Policy and Program Development.

• Step 9: Employee Communications• Step 10: Measurement, Reporting – and

celebrating successes along the way!

CHALLENGES IN HR INVOLVEMENT WITH CSR

• HR has to understand how CSR strategy is aligned to business and HR practices.

• HR needs to ensure that their organization CSR can stand up to the inevitable scrutiny by stake holders and that training and communication mean its embedded through out the culture of an organization.

• HR needs to be an active business partner working with other functions like finance, public relations, marketing etc.

Contd..

• HR has to implement CSR as a strategic opportunity which should be market-led and It should be restrained by bureaucracy. Because trust build through successful CSR is hard to regain if lost.

• HR has to get the Top team on board and know how to sell benefits of CSR to different stakeholders.

• HR has to develop CSR code based laws and regulations of the country and also ensure that reporting systems are accountable and transparent.

Contd..• HR has to look for ways to leverage social

responsibility initiatives internally.• The separation of employees during mergers,

acquisitions, downsizing etc. should be strategically aligned with the business strategy as well as Corporate Social responsibility.

• The Human Resource department should effectively measure and evaluate CSR activities. There is also a need to conduct periodic review of the CSR activities

RECOMMENDATIONS:

• The HR department should take the responsibility to develop a formal policy on sustainable practices involving employees.

• The orientation programme of newly recruited candidates should be designed in a manner that corporate philosophy about CSR gets highlighted.

• The Training facilities may also be made available to instill the CSR culture among employees.

• The Training facilities may also be made available to instill the CSR culture among employees.

Recommendation (contd.)

• The separation of employees during mergers, acquisitions, downsizing etc. should be strategically aligned with the business strategy as well.

• The Human Resource department should effectively measure and evaluate CSR activities.

• CSR activities are generally designed by top management. The HR role is only the execution of those plans.

• CSR can be integrated in to processes such as employer brand, recruitment, appraisal, retention, motivation, rewards, internal communication diversity ,coaching and training.

• CSR is a strategic opportunity which is market -led and is restrained by bureaucracy.

Recommendations (contd.)

• Indian companies has to be sensitized to CSR in the right perspective in order to facilitate and create an enabling environment for equitable partnership between civil society and business.

• A part from individual efforts, companies as part of the strategy are coordinating with social organizations to take up projects like specialized medical care , blood banks, labs, slum development programs, education endeavors, environment friendly projects etc.

• HR should make employees aware that every single person in the society have responsibility to the society they belong irrespective of the job ,class, caste or gender.

CONCLUSION:

It is a foregone conclusion that business enterprises have social obligations. Instead of single objective enterprises are required to pay attention to multiple objectives like social, environmental, information and ethical objectives all of which are integrated. Indian enterprises must graduate from thinking in terms of just charity to the concept of respectability. More particularly, HR activities must realize that neither office nor position gives immunity form responsibility.

Contd.

It is important to link HR with external environment to chart out a better future for the society. “C” no longer stands for Corporate and Cash, now it also includes Care and Community development as socially responsible enterprises help in building a better tomorrow for the underprivileged. Companies can centralize community development activities by creating a trust to be funded by member- companies on a pre-determined formula.

Contd.

• HR practitioners can act as translators of the organization’s CSR commitment vertically and horizontally across departments. Most will find upon reading this report that they have many good practices underway. Many will find they have a new structure for their thinking they can apply practically in the workplace.

Contd.

• For human resource professionals embarking on CSR or deepening their CSR experience, this roadmap can help them understand their role in sustainability and CSR and how they can foster an environment that embeds a CSR ethic in “the way we do business around here”.

THANK YOU