Managers with cross-border teams have to wear multiple hats. Along with motivating and guiding the team, selecting the most effective communicative channels and resolving conflicts, they also have to be mindful of differences in culture, aspirations, attitudes, market practices and local laws. Building upon these differences allows them to work effectively with an overseas team.
A central cultural construct in India is that a job is often an integral part of an individual’s identity. Employees also tend to form social and personal bonds at the workplace which could be considered intrusive in other cultures. Moreover, historically, the Indian workplace has been hierarchical. However, recently, there has been an increased emphasis on skillsets and agility over the more traditional markers such as age, work experience and educational qualifications. Post the pandemic, there has also been a shift in understanding employee wellness with issues such as diversity, inclusion and mental wellness occupying centre stage.
Employment laws in India are subject to both Central and State legislations. The Central laws broadly address employer-employee relations (such as industrial disputes, collective bargaining, etc.), whereas the State laws (principally, the various shops and establishments legislations) address more operational matters such as leave, work timings, holidays and overtime requirements. Depending on the State in which employees are hired, the employer would be required to undertake both Central and State-specific compliances.
Hiring from India
Key matters that must be kept in mind whilst hiring are: compensation structuring (the Indian market is very sensitive to remuneration; skilled candidates often field multiple offers and choose the ones that offer more remuneration and flexibility), issue of an offer letter, notice period requirements (including notice period ‘buyouts’), drafting a robust employment contract, developing onboarding practices and conducting background checks. It may also be useful to consider whether the employees are joining from a competitor and whether any risk mitigation strategy would have to be adopted.
While some of the operational aspects may be taken care of with local HR support, it would be helpful for foreign managers to be aware of onboarding practices in general, aspects of compensation benchmarking, what allowances are common in the industry (for example, a night allowance is often given to employees who work night shifts) work timings, practices to be adopted for remote working, and the nature and manner in which background checks would be conducted on employees.
Managing a team
While there are no specific requirements under law, organizations undertake formal reviews to assess employees’ performances and revise compensation based on internal policies. If an employee consistently underperforms, the manager typically has conversations with the person before placing them on a performance improvement plan (PIP). Managers must also refrain from giving mixed signals; for instance, providing consistent critical feedback on email, but still awarding a favourable rating. While an employee is on PIP, their review must be undertaken carefully – at every stage of the PIP, the employee must be aware of their objectives and the extent to which they have been fulfilled.
India does not recognise employment-at-will, and courts are often employee-friendly. Under the Indian employment law framework, employees are broadly classified into ‘workmen’ and non-workmen. The service conditions of workmen are subject to far greater statutory protection, particularly in respect of termination from employment. It is, therefore, important that before terminating an employee’s services for ‘cause’, an internal inquiry is conducted as per principles of natural justice. This essentially implies that all concerned employees are provided a complete opportunity to be heard and that there is no bias in the proceedings. Failure to comply with these principles could result in employees challenging the entire disciplinary process before the courts.
While framing internal policies on conducting disciplinary inquiries, provisions of certain laws such as the Industrial Employment (Standing Orders) Act, 1946 and State-specific legislations would also have to be examined.
Maintaining India-specific policies
Companies must be aware that their global policies and practices may not work ‘as-is’ for Indian employees. While understanding the extent to which a global set of policies would apply in India, companies adopt one of the following methods: (i) they maintain a global handbook with a standalone India-specific annexure; or (ii) draft a separate handbook for employees based in India. The following classification of internal policies may also be useful:
Mandatory Policies: These must be maintained under Indian law depending on the number of employees engaged, and include policies on working hours, overtime, leave, holidays, equal opportunity, maternity benefits, anti-sexual harassment, collection of employee personal data, disciplinary inquiry, etc. Since these policies must be drafted in accordance with local legislation, it would be advisable to rely on India-specific drafts rather than amending global policies.