The dynamics of HRM systems in Indian BPO firms

Pawan S. Budhwar*, Harsh K. Luthar, Jyotsna Bhatnagar

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This paper highlights the context within which business process outsourcing (BPO) has rapidly grown in India and the critical need to investigate the dynamics of human resource management (HRM) practices and systems in this sector. Using a mixed-method approach involving both in-depth interviews and self-completing questionnaires, we analyze the nature of HRM systems in BPO organizations operating in India. The analysis is based on a sample of 51 BPO companies, a majority of which are located near the capital of New Delhi. The results focus on the nature and structure of work and organization of Indian BPOs, as well as the strategic role played by HRM in such organizations. Furthermore, the findings highlight the way specific HRM practices such as recruitment, performance appraisal, training and development, and compensations are implemented. Our study suggests the existence of formal, structured, and rationalized HRM systems in Indian BPOs. A number of insights related to HRM policies and practices are shared by the HR managers interviewed shedding more light on the inner workings of the Indian BPO companies and their challenges. The analysis provides original and useful information to both academics and practitioners and opens avenues for future research on the nature of HRM systems and practices in the Indian BPO industry.

Original languageEnglish
Pages (from-to)339-360
Number of pages22
JournalJournal of Labor Research
Issue number3
Publication statusPublished - Dec 2006


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