HR OUTSOURCING ON THE PERFORMANCE MANAGEMENT …

European Journal of Molecular & Clinical Medicine ISSN 2515-8260 Volume 07, Issue 02, 2020

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HR OUTSOURCING ON THE PERFORMANCE MANAGEMENT

SYSTEMS OF IT &PHARMA ORGANISATIONS

DR.T.S.POORNACHANDRIKA

ASSOCIATE PROFESSOR

CBIT-SMS

HYDERABAD –TELANGANA-75

[email protected]

ABSTRACT

To counter the fierce competition in the global market and to accomplish long term

growth, organizations need to develop, refine and concentrate on their core

competencies. Organizations need careful planning and strategy formulation and

implementation to enhance productivity levels and to change the Value system of the

employees .This is a mandate as employees be in a better position to internalize the

new and emerging technologies and future challenges. The HR function has

transformed due to the evolution of the internal and external organizational

environment. The focus has shifted from traditional, operational and administrative

perspectives to changes in employment relationships and strategic HRM. Presently the

contemporary approach of human resources management is to define the relationship

between business strategy and human resources management. Moreover, organizations

are required to investigate the way in which HRM can be used strategically to achieve

organizational goals. Outsourcing is simply getting work from the external sources,

which is done previously inside the organization. If external organizations or business

entities have specialized in an activity which is not strategically important to business-

and is able to do it cost effectively, it is recommended to get it done. Human resources

outsourcing: “Human Resource Outsourcing (HRO) is the process of transferring

functions of an organization’s human resources management functions or activities to

a service provider external to the organization”. Many organizations outsource all or

some HR activities because they cannot afford to employ talented part-time or full time


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employees across all areas of the organization’s operations. Other human resources

activities being commonly outsourced include recruitment and selection, remuneration,

industrial relations (IR), and occupational health and safety. However, the decision

whether to outsource the HR functions or retain depends on the benefits and costs of

HR outsourcing and centers around HR needs versus creating internal strengths. There

are both Pros and Cons of outsourcing HR activities. outsourcing HR has been

increasing, with many organizations choosing to outsource partial or all of their HR

activities.

An organization's human resources department is responsible for a variety of

functions such as policy development and implementation, recruitment and

selection.HR department conducts background checks of the employees, Human

resource departments monitor employee payroll and tax filing as well as employee

benefit and health administration. Human resources also manage legal compliance,

maintain files and records, monitor performance management systems and oversee

training and development. Human resources department also handles employee

assistance and counseling process, employment relocation process, grievances

handling and expatriate administration and also do effective retirement planning.

Human resources department is in charge of human resources information

system in the organization. Human resources department has a major role in dealing

with strategic business planning which helps to anticipate the future vacancies in an

organization. Human resources department assists the employee in retirement planning

and pension benefits administration. For many businesses, the various functions of the

HR department are too comprehensive and complex to maintain in-house. The

organizations that outsource HR functions receive several advantages that support the

organization’s business. Research suggests that outsourcing HR activities can

encourage the HR function to become more strategic by spending less time and effort

on meeting cost objectives and addressing developmental goals, in terms of specific HR

knowledge and more time on strategic planning. It is observed that the most common


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outsourcing HR activities are recruitment, payroll, training and development, benefit

administration and legal compliance, and the administration or transaction process of

HR. Organizations outsource many more HR activities implies that, organizations and

human resources outsourcing providers will become business partners. HR providers

will take full responsibility for their organization’s (client’s) HR function. In turn, to

understand the nature of their client’s business, HRO providers need to consider the

context of their client, including organizational culture and structure. Hunan resources

outsourcing is considered as a viable option due to its cost advantage, quality services

and concentrating on the core competencies. Core Functions of human resources

management which are Outsourced by the organizations.

Recruitment and selection

Background checks

Training and development

Performance Management

Executive development and coaching

Compensation Management

Employee relocation process

Union and labor relations process

Employee grievances

Expatriate administration

Health care benefits administration

Human resources information system

Retirement planning

Pension and benefits administration.

Performance management plans are like route maps to the employee and the

organization. They give the correct direction to the employee. They evaluate the

current performance of the employee, communicate the organizational performance


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expectations and standards and they help to leverage individual employee performance

plans with the company policies. Role of HR professionals have become strategic by

relieving them of administrative burden and enabling them to focus on the strategic

performance of the organization. This study is done to be familiarized with the

similarities and dissimilarities in terms of organizational perfprmance of IT and

Pharmaceutical sectors (Comparitive study) in the Twin cities of Hyderabad and

Secunderabad.

Key words:Outsoucing,HR outsourcing,Organisational Performance, Performance

Management.

INTRODUCTION

To counter the evergrowing competition in the global market scenario and to

accomplish long term growth, organizations need to develop,nurture and focus on their

core competencies. Organizations require careful planning ,strategy formulation and

implementation to increase productivity levels and to transform the value system of the

organization.

This is necessary as employees be in a better position to internalize the new and

emerging technologies and future challenges. Business Practices and economic

activities are ever changing. Most organisations have transformed completely from

manual processes to, automated and digitalised technologies Revelations indicate that

industries have come up with sophisticated products that require man power with

special skills Moreover, information communication technology usage and faster

information flows have revolutionized way of life and the way businesses operate. The

ever growing and ever changing needs and demands of the consumers are compelling

the organizations to change and restructure their business operations to ensure that they

keep up with market demands. All of these factors are facilitating organizations to

change in order to be competitive,sustainable and innovative in nature and it is known

that only the healthy organizations succeed.


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Research in this domain suggests that if an organization has to withstand in the

business environment it must focus on Pace, flexibility and competencies To achieve

that, organizations need to focus on its strength areas and core competencies while

relieving noncore and repetitive functions to an external service provider who will

carry out that function as one of their core activities for a fee. This outsourcing

strategy can allow organizations to focus on their core competencies to increase

efficiency without wasting time to invest in people and technology. This production

strategy facilitates the organizations to become increasingly profitable, and better be

able to serve to local and glol customer base. Outsourcing can be defined as an

organization delegating their non-core functions to an external organization that

provides a particular service, function or product. Market changes reveal that

outsourcing is no longer confined to information technology (IT) services, but has

expanded to financial services, banking services, engineering services, creative

services, data management services, hospitality and clinical laboratories or laboratory

medicine, and human resource management (HRM) Outsourcing the Human Resource

(HR) function is one of many ways to improve an organization’s efficiency. The nature

of the HR function has changed due to the evolution of the internal and external

organizational environment. The focus has shifted from traditional, operational and

administrative perspectives to changes in employment relationships and strategic and

futuristic HRM. Presently the contemporary approach of human resources management

is to define the relationship between business strategy and human resources

management. Moreover, organizations are required to investigate the way in which

HRM can be used strategically to achieve organizational goals and objectives.

This transformation in focus demands the HR function to become more

strategic in nature. Research indicates that outsourcing the HR activity is one of many

strategies used by the management to meet the organization’s demands and objectives

including cost economy factors, increasing flexibility and agility, gaining access to

advanced technologies and a focus on core activities.


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Need of the study

The overall purpose of the study is to explore and explain HR outsourcing of

Performance Management systems by the select organizations. The primary purpose of

this research is to internalise this concept of human resources outsourcing in the

organizational Set up. The research hypothesis and the objectives were formulated to

study the advantages, performance and achievement of individual and organizational

objectives.

The information gained from the study may aid in knowing the importance of

outsourcing Performance Management areas of human Resources Management,

unearth the reasons and possible benefits of HR outsourcing and consider all the factors

which make HR outsourcing, a considerable and an important option, especially for the

information technology industry and the pharmaceutical industry and to know the

Impact of HR outsourcing on the Employee and the organizational Performance.

Scope of the study

The scope of the study is confined to the Pharma and IT industries and within these

sectors sixteen important identified human resources functions are covered.

Limitations of the study

1. The research is confined to Hyderabad and Secunderabad only.

2. The sample size is 320 Employees (IT=170 and Pharma=150) 42 HR

Managers (IT =16, Pharma=26).

3. Direct access with the respondents was restricted and possible Interview

method was not possible.

4. Access to the complete information was not possible because of the

confidentiality maintained by the respondents in disclosing the information.

5. Respondents biased attitude and prejudices hindered the quality of research to

a certain extent.


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Sample size

Employees and HR Managers of Pharma and IT industries located in Hyderabad

and Secunderabad are taken as sample size.

SAMPLE DESCRIPTION

Type Frequency Percent

Pharma Employees 150 47

IT Employees 170 53

Pharma Managers 26 62

IT HR Managers 16 38

Sources of Data

Primary data was collected from IT employees and Managers, Pharma

employees and managers through structured questionnaire method, followed by

interviews and interactions with employees and HR Managers in both the selected

industries.

Complete information about the organizations is not furnished because of the

confidentiality matters.

Secondary data was collected from textbooks, journals, magazines, periodicals,

and websites.

Sampling Technique

Simple Random Sample is the most effective method used to collect data from

the respondents of the two select industries.

Use of statistical tools: The nature of the study is descriptive where the universe and

population is workforce of Pharma and IT industries from Hyderabad city. The samples

are collected from both employees and human resources managers. The sampling

technique used is convenient sampling. The instrument used for obtaining the data is a

structured questionnaire. The sample size of employees for Pharma and IT are 170 and

150 respectively. The sample size of managers for Pharma and IT are 16 and 26

respectively. The scaling technique used for the sample variables is like rt scale ranging


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from 1 to 5 points. Period of study is 2016 -2019. The statistical techniques and tool

used in the study are KMO Bartlett test, Scale reliability testing, factor analysis, mean,

standard deviation, correlation, t-test and ANOVA test and software used is IBM

SPSSv 20.

Objectives of the study

1. To assess the impact of Human resources outsourcing on the employee

Performance

2. To evaluate the impact of Human resources outsourcing on the organizational

performance in the select industries.

Impact of HR outsourcing on the employee and the organizational Performance

Introduction: It is always recommended for the organization to improve and upgrade

the systems to improve the overall performance suited to the demands of the changing

business environment and requirement.HR department is no exception to this. By

imbibing the change process the organization should not incur any risk and major

responsibility which disturbs the normal functioning of the organization.

Table 1: Mean and SD values of upgrading HR system between IT and Pharma

industries

Variable Industry N Mean SD

Importance to improvise existing HRM system

without risks and responsibilities

Pharma 150 3.6933 0.969

IT 170 3.9765 0.8282

Source: Compiled questionnaire data using IBMSPSSv20

From the table, it has been examined that the intensity of the importance to

improve the existing HRM system without risks and responsibilities is comparatively

high in Pharma industry than in IT. The same has been evidenced with their respective

mean and standard deviation values.


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Table 2 t and p-values of Improving HR system between IT and Pharma

industries

Variable

t-test for Equality of Means

t df p-

value MD

importance to improvise existing

HRM system without risks and

responsibilities

Equal

variances

assumed

-

2.818 318 0.005

-

0.28314

Equal

variances not

assumed

-

2.791 294.944 0.006

-

0.28314


H0: There is no significant difference in the opinion about importance of major HRM

systems improvement without risks and responsibilities between Pharma and IT

Industry.

Ha: There is a significant difference in the opinion about importance of major HRM

systems improvement without risks and responsibilities between Pharma and IT

Industry.

To test the hypotheses independent t- test is employed and the test results are

furnished in the table.

It is clear from the table that the opinion of employees about importance of

major HRM systems improvement without risks and responsibilities between two select

industries is interpreted with statistical values. The calculated results show t-statistic of

2.818 and p-value 0.005 with 318 degree of freedom. The p-value 0.005 is less than

0.05. Therefore, it can be rejected the null hypotheses at 5% level of significance,

which means that the importance of major HRM systems improvement without risks

and responsibilities between two select industries.

Performance management plans: Performance management plans are like route maps

to the employee and the organization. They give the correct direction to the employee.


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They assess the current performance of the employee, communicate the organizational

performance expectations and standards and they help to leverage individual employee

performance plans with the company policies.

Table 2 Mean and SD values of synchronization of performance management

plans with company policies between Pharma and IT industries.

Variable Industry N Mean SD

Synchronization of performance management

plans with company policies

Pharma 150 3.4667 1.01444

IT 170 3.6353 1.07524


From the table it has been examined that the said statistical mean and SD vales

in synchronization of performance management plans with company policies for select

industry, the mean and SD for pharma are; 3.4667and 1.01444, and the mean and SD

for IT industry are; 3.6353and 1.07524. Thus, it is inferred that the synchronization of

performance management plans with company policies are more or less are identical in

both the select industries.

Table 3 t and p- values of synchronization of Performance management plans

with company policies between Pharma and IT industries.


t Df p-

value MD

Synchronization of performance

management plans with company

policies

Equal variances

assumed -1.437 318 0.152 -0.1686

Equal variances

not assumed -1.443 316.562 0.15 -0.1686


H0: There is no significant difference in the synchronization of performance

management plans with company policies between IT and Pharma industries.


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Ha: There is a significant difference in the synchronization of performance management

plans with company policies between Pharma and IT industries.

To test the above hypotheses, the independent t-test is applied and the results

were furnished in the table. From the table it has been observed that the given t value

and p-value are; -1.437 and 0.152 which is more than 0.05 which means that the null

hypotheses has been accepted and alternate hypotheses is rejected. Therefore, it is

inferred that there is no significant difference in the synchronization of performance

management plans with company policies between Pharma and IT industries.

The components of Performance management system

Table 4 : f and p-value of performance management system between IT and

Pharma industries.

Variable Sum of

Squares

df Mean

Square

F Sig.

Performance planning

and goal setting

Between Groups 14.587 1 14.587 18.19 0

Within Groups 255.085 318 0.802

Total 269.672 319

Performance evaluation

Between Groups 19.984 1 19.984 21.55 0

Within Groups 294.887 318 0.927

Total 314.872 319

Development planning

Between Groups 1.066 1 1.066 1.253 0.26

Within Groups 270.68 318 0.851

Total 271.747 319

Training

Between Groups 5.162 1 5.162 7.241 0.01

Within Groups 226.685 318 0.713

Total 231.847 319

Overall performance Between Groups 23.985 1 23.985 25.1 0


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management system Within Groups 303.862 318 0.956

Total 327.847 319

Source: Compiled questionnaire data using IBM SPSSv20

H0: There is no significant impact of HR outsourcing on the performance planning and

goal setting, performance evaluation, training and overall performance management

system between Pharma and IT industries.

Ha: There is a significant impact of HR outsourcing on the performance planning and

goal setting, performance evaluation, training and overall performance management

system between Pharma and IT industries.

To test the above research hypotheses, the ANOVA-test is applied and the results were

furnished in the table. From the table it has been observed that the calculated f value

and p-values are; 18.19 and 0.000, 21.55 0.000, 7.241 and 0.010, 25.1 and 0.000 which

are less than 0.05 which means that the null hypotheses has been rejected and alternate

hypotheses are accepted. Therefore, it is understood that there is a considerable

significant impact of HR outsourcing in the performance planning and goal setting,

performance evaluation, training and overall performance management system between

Pharma and IT industries.

H0: There is no significant impact of HR outsourcing on the development planning

between Pharma and IT industries.

Ha: There is a significant impact of HR outsourcing on the development planning

between Pharma and IT industries.

To test the above research hypotheses, the ANOVA-test is applied and the

results were furnished in the table. From the table it has been observed that the

calculated f value and p-values are; 1.253 and 0.26 which is more than 0.05 which

means that the null hypotheses has been accepted and alternate hypotheses is rejected.

Therefore, it is inferred that there is no considerable significant impact of HR

outsourcing in the development planning between IT and Pharma industries.


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Correlation of HR outsourcing with other HR functions: The correlations of HR

outsourcing with HR functions are discussed as industry wise. In connection with the

mentioned concept, it is required to understand the degree of correlation among the

selected HR outsourcing functions.

Pharma:

Table 5: Correlation between HR outsourcing and other HR functions which

improves employee and the organizational performance.

Variables

To improve

strategic role

of HR

professionals

Cost

economy

factors

Gaining

HR

outsourcing

providers’

tech&

Expertise

Time

saving

Improve

performance

standards

To

systemize

HR

Functions

To

avoid

legal

risks

Focus

core

business

To improve

Strategic role

of HR

professionals

Correlation 1 .722** .343** .494** .418** .517** .430** .584**

Sig. (2-tai) 0 0 0 0 0 0 0

N 150 150 150 150 150 150 150 150

Cost economy

factors

Correlation .722** 1 .349** .517** .518** .559** .401** .644**

Sig. (2-tai) 0 0 0 0 0 0 0

N 150 150 150 150 150 150 150 150

Gaining HR

outsourcing

providers’

tech&Expertise

Correlation .343** .349** 1 .336** .479** .408** .183* .277**

Sig. (2-tai) 0 0 0 0 0 0.025 0.001

N 150 150 150 150 150 150 150 150

Time saving

Correlation .494** .517** .336** 1 .728** .581** .466** .688**

Sig. (2-tai) 0 0 0 0 0 0 0

N 150 150 150 150 150 150 150 150

Improve

performance

standards

Correlation .418** .518** .479** .728** 1 .651** .431** .639**

Sig. (2-tai) 0 0 0 0 0 0 0

N 150 150 150 150 150 150 150 150

To systemize

HR Functions

Correlation .517** .559** .408** .581** .651** 1 .699** .644**

Sig. (2-tai) 0 0 0 0 0 0 0

N 150 150 150 150 150 150 150 150

To avoid legal

risks

Correlation .430** .401** .183* .466** .431** .699** 1 .634**

Sig. (2-tai) 0 0 0.025 0 0 0 0

N 150 150 150 150 150 150 150 150

Focus on core

business

Correlation .584** .644** .277** .688** .639** .644** .634** 1

Sig. (2-tai) 0 0 0.001 0 0 0 0

N 150 150 150 150 150 150 150 150

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).



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From the table, It has been examined that there are varied degree of correlations

among HR outsourcing process and HR functions ranging from 0.183 at 5 % level of

significance to 0.728 at 1% level of significance. There is a high positive degree of

linear correlation (0.722) between strategic role of HR professionals and cost economy

factors in terms of HR outsourcing process. And in the rest of functions the coefficient

of correlation is below 0.584. In other words there is a moderate degree of linear

correlation. Therefore, it can be concluded that the intensity of HR outsourcing process

does not provide the desired results for the management.

There is a high positive degree of linear correlation (0.644) between cost

economy factors and focus on core business in terms of HR outsourcing process. And

in the rest of functions the coefficient of correlation is below 0.559. In other words

there is a moderate degree of linear correlation. Therefore, it can be concluded that the

intensity of HR outsourcing process does not provide the desired results for the

management.

There is a low positive degree of linear correlation (0.48) between gaining HR

outsourcing provider’s talent and expertise and improving performance standards in

terms of HR outsourcing process. And in the rest of functions the coefficient of

correlation is below 0.408. In other words there is also a low degree of linear


does not provide any expected results for the management.

There is a high positive degree of linear correlation (0.732) between time saving

and improving performance standards in terms of HR outsourcing process. Thus, it

accomplishes organizational objectives. And in the rest of functions the coefficient of

correlation is below 0.688. In other words there is a moderate degree of linear


does not accomplish much the organizational objectives.


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There is a high positive degree of linear correlation (0.699) between to

systemize HR functions and to avoid legal risks in terms of HR outsourcing process.

Thus, it accomplishes organizational objectives. And in the rest of functions the

coefficient of correlation is below 0.644. In other words there is a moderate degree of

linear correlation. Therefore, it can be concluded that the intensity of HR outsourcing

process does not accomplish much the organizational objectives.

There is a high positive degree of linear correlation (0.688) between to focus on

core business and time saving in terms of HR outsourcing process. Thus, it

accomplishes organizational objectives. And in the rest of functions the coefficient of

correlation is below 0.644. In other words there is a moderate degree of linear


does not accomplish much the organizational objectives.

IT Employees

Table 6: Correlation between HR outsourcing and other HR functions which

improves the employee and the organizational Performance.

**. Correlation is significant at the 0.01 level (2-tailed).

To

improve

Strategic

role of HR

profession

als

Cost

economy

factors

Gaining

HR

outsourcin

g

providers’

tech &

Expertise

Time

saving

Improve

performan

ce

Standards

Systemizi

ng HR

Functions

To avoid

legalrisks

Focus on

core

business

To

improve

strategic

role of HR

profession

als

Correlation 1 .750** .766** .708** .393** .542** .492** .544**

Sig. 0 0 0 0 0 0 0

N 170 170 170 170 170 170 170 170

Cost

economy

factors

Correlation .750** 1 .669** .748** .395** .509** .428** .534**

Sig. 0 0 0 0 0 0 0

N 170 170 170 170 170 170 170 170

Gaining

HR

outsourcin

g

providers’

tech and

Expertise

Correlation .766** .669** 1 .692** .573** .606** .511** .630**

Sig. 0 0 0 0 0 0 0

N 170 170 170 170 170 170 170 170

Time

saving

Correlation .708** .748** .692** 1 .604** .672** .537** .594**

Sig. 0 0 0 0 0 0 0

N 170 170 170 170 170 170 170 170

Improve

performan

Correlation .393** .395** .573** .604** 1 .600** .512** .517**

Sig. 0 0 0 0 0 0 0


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ce

standards N 170 170 170 170 170 170 170 170

To

systemize

HR

functions

Correlation .542** .509** .606** .672** .600** 1 .732** .697**

Sig. 0 0 0 0 0 0 0

N 170 170 170 170 170 170 170 170

To avoid

legal risks

Correlation .492** .428** .511** .537** .512** .732** 1 .565**

Sig. 0 0 0 0 0 0 0

N 170 170 170 170 170 170 170 170

Focus core

business

Correlation .544** .534** .630** .594** .517** .697** .565** 1

Sig. 0 0 0 0 0 0 0

N 170 170 170 170 170 170 170 170


From the table, it has been examined that there are varied degree of correlations

among HR outsourcing process and HR functions ranging from 0.393 at 1 % level of

significance to 0.766 at 1% level of significance. There is a high positive degree of

linear correlation (0.766) between strategic role of HR professionals and HR

outsourcing provider in terms of HR outsourcing process. And in the rest of functions

the coefficient of correlation is below 0.750. In other words there is a moderate degree

of linear correlation. Therefore, it can be concluded that the intensity of HR

outsourcing process does not provide the desired results for the management.

There is a high positive degree of linear correlation (0.750) between cost

economy factors and strategic role of HR professionals in terms of HR outsourcing

process. And in the rest of functions the coefficient of correlation is below 0.748. In

other words there is a moderate degree of linear correlation. Therefore, it can be

concluded that the intensity of HR outsourcing process does not provide the desired

results for the management.

There is a high positive degree of linear correlation (0.604) between improving

performance standards and time saving in terms of HR outsourcing process. And in the

rest of functions the coefficient of correlation is below 0.600. In other words there is a

moderate degree of linear correlation. Therefore, it can be concluded that the intensity

of HR outsourcing process does not provide the desired results for the management.

There is a high positive degree of linear correlation (0.732) between systemizing HR

functions and avoid legal risks in terms of HR outsourcing process. And in the rest of


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functions the coefficient of correlation is below 0.697. In other words there is a

moderate degree of linear correlation. Therefore, it can be concluded that the intensity

of HR outsourcing process does not provide the desired results for the management.

There is a high positive degree of linear correlation (0.697) between focus on

core business and systemizing HR functions in terms of HR outsourcing process. And

in the rest of functions the coefficient of correlation is below 0.630. In other words

there is a moderate degree of linear correlation. Therefore, it can be concluded that the

intensity of HR outsourcing process does not provide the desired results for the

management.

Table 7: Organizational performance

Variable


T df p-

value

Mean

Difference

Impact of HR outsourcing on

organizational performance

Equal variances

assumed

-

2.148 318 0.032 -0.29882

Equal variances

not assumed

-

2.171 317.266 0.031 -0.29882

Source: Compiled questionnaire data using IBM SPSS20

H0: There is no impact of HR outsourcing on the organizational performance between

Pharma and IT Industry

H1: There is an impact of HR outsourcing on the organizational performance between

Pharma and IT Industry

To test the hypotheses independent t- test is employed and the test results are

furnished in the table .

The calculated t and p-value between IT and Pharma are -2.148 and 0.032 for

the impact of HR outsourcing on organizational performance. The p-value 0.032 is less

than 0.05. Therefore, it is rejected the null hypotheses at 5% level of significance,


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which means that there is a significant impact of HR outsourcing on organizational

performance between two select industries.

Table 8: f and p-value of organizational performance between IT and Pharma

industries.

Variable Sum of

Squares

df Mean

Square

F p-

value

Concentrating on core

competencies

Between Groups 0.01 1 0.01 0.012 0.91


Total 244.75 319

Improving HR

efficiencies

Between Groups 9.191 1 9.191 8.303 0

Within Groups 351.997 318 1.107

Total 361.188 319

Internalizing vendor

knowledge

Between Groups 21.353 1 21.353 19.92 0

Within Groups 340.847 318 1.072

Total 362.2 319

Organizing training &

development

Between Groups 19.026 1 19.026 17.32 0

Within Groups 349.362 318 1.099

Total 368.388 319

Relieving of time

consuming and

routine functions

Between Groups 25.06 1 25.06 22.74 0

Within Groups 348.223 316 1.102

Total 373.283 317

Enhancing employee

productivity

Between Groups 6.388 1 6.388 5.196 0.02


Total 397.388 319


H0: There is no significant impact of HR outsourcing on concentrating on core

competencies between Pharma and IT industries


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Ha: There is a significant impact of HR outsourcing on concentrating on core

competencies between Pharma and IT industries.

To test the above research hypotheses, the ANOVA-test is applied and the results were

furnished in the table. From the table it has been observed that the calculated f value

and p-values is ; 0.012 and 0.91 which is more than 0.05 which means that the null

hypotheses has been accepted and alternate hypotheses is rejected. Therefore, it is

inferred that there is no considerable significant impact of HR outsourcing on

concentrating on core competencies between Pharma and IT industries.

H0: There is no significant impact of HR outsourcing on the Improving HR efficiencies,

internalizing vendor knowledge, organizing training and development, relieving of time

consuming and routine functions, Enhancing employee productivity and between


Ha: There is a significant impact of HR outsourcing on the improving HR efficiencies,

Internalizing vendor knowledge, organizing training and development, relieving of time

consuming and routine functions, enhancing employee productivity and between


To test the above research hypotheses, the analysis of variance ,ANOVA-test is

applied and the results were furnished in the table 3.45. From the table it has been

observed that the calculated f value and p-values are; 8.303 and 0, 19.92 and 0, 17.32

and 0, 22.74 and 0, 5.196 and 0.02 which are less than 0.05 which means that the null

hypotheses has been rejected and alternate hypotheses are accepted. Therefore, it can be

concluded that there is a considerable significant impact of HR outsourcing on the

improving HR efficiencies, internalizing vendor knowledge, organizing training and

development, relieving of time consuming and routine functions, enhancing employee

productivity and between Pharma and IT industries.


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Employee performance records for promotional decisions: HR outsourcing service

provider keeps a track or record of the employee performance for promotional and

other HR decision.

Table 9: t and p-value of employee performance records for promotional decisions

between two select industries.

Variable t-test for Equality of Means

t Df p-

value

Mean

Dif

Employee performance records

for promotional decisions

Equal variances

assumed -1.3 318 0.194 -0.1341

Equal variances

not assumed

-

1.31 315.59 0.193 -0.1341


H0: There is no significant impact of HR outsourcing on employee performance records

for promotional decisions between Pharma and IT industries.

Ha: There is a significant impact of HR outsourcing on employee performance records

for promotional decisions between Pharma and IT industries.

To test the above research hypotheses, the independent test is applied and the

results were furnished in the table 3.46. From the table it has been observed that the

calculated t value and p-values is ; 0.194 and 0.1341 which is more than 0.05 which

means that the null hypotheses has been accepted and alternate hypotheses is rejected.

Therefore, it can be concluded that there is no considerable significant impact of HR

outsourcing on employee performance records for promotional decisions between


Role of HR professionals have become strategic by relieving them of administrative

burden and enabling them to focus on the strategic performance of the organization.


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Table 10: t and p-value of focus on strategic performance

Variable


t Df p-

value

Mean

Dif

Is HR outsourcing enables HR

professionals to concentrate more

on strategic performance

Equal

variances

assumed

-

1.96 318 0.051

-

0.20078

Equal

variances not

assumed

-

1.98 317.16 0.048

-

0.20078


H0: There is no significant impact of HR outsourcing on HR outsourcing enables HR

professionals to concentrate more strategic performance between Pharma and IT

industries.

Ha: There is a significant impact of HR outsourcing on HR outsourcing enables HR


industries.

To test the above research hypotheses, the independent test is applied and the results

were furnished in the table. From the table it has been observed that the calculated t

value and p-values is; -1.96 and 0.051 which is more than 0.05 which means that the

null hypothesis has been accepted and alternate hypotheses is rejected. Therefore, it is

inferred that there is no considerable significant impact of HR outsourcing on HR


industries.

REVIEW OF LITERATURE

The research study of Fang Lee CookeJie ShenMcBride, Anne (2005) provide a

critical review of the reasons for, the processes involved in, and the perceived

effectiveness of human resources outsourcing.. .Results showed that organizations

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should apply both the resource-based view and institutional theory when making

outsourcing decisions.

Sarode,Sheetal Gade (2012) high light the factors which need to be considered before a

company goes for outsourcing of human Resource. The findings of the research

indirectly point out that human resources functions outsourcing is contingent upon

factors like flexibility, availability of adequate resources, affordability, and

acceptability. The research also suggests a systematic process, requisites and proper

planning which successfully execute human resources outsourcing in the organizations.

Kernohan, Paul2(2008), technology outsourcing brings benefits and efficiencies to

human resources. Human resources functions gains are assured once the steps are

planned systematically and good service providers are selected.

Ganesh, ShivGanesh (2007), study that a large number of U.S. companies have

outsourced IT work to countries such as India, it was found that IT outsourcing raises

class issues and ethnic tensions, It gives the relation between outsourcing and

globalization.

Yu, Tai-Yi(2014), on information systems (IS) outsourcing indicate that public sector

decides to outsource information technology (IT) services because private vendors offer

more cost advantages. This research explores government sectors of outsourcing and

focus on the role of relationship for IS-service provider in information sharing and

providing which are contributing factors to successful outsourcing in long-term

partnerships and is affected by the level of trust that each has in the outsourcing

relation.

Vaniessa Robinson (2009), reports on research by Leeds university business school for

the Chartered Institute of Personnel and Development (CIPD) on outsourcing

opportunities for human resources (HR). 315 organizations were surveyed, 29% were



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outsourcing HR, with 7% opinion was human resources functions outsourcing is a

success.

Chandrakant Ghabak (2012) revealed with this study that globalization to the Indian

industry is both a threat and oppurtunity. unique human resources practices has great

influence the growth of the IT and ITES sector, Retaining talented work force is the

need of the hour. A model of 3C, viz, cost effective training, conducive working

environment and continuous skill improvement was proposed. The Indian IT success

story has made India's attractiveness as an investment destination.

Sheigren, Diane (2004) human resources outsourcing is the world’s fastest growing

field.The research proved that there is high level of satisfaction in the executives ,

whose organizations have outsourced their HR Functions.

KVS Jawahar Babu;G Githanjali Jain (2012) opined human resource management is a

process of bringing people and organizations together so that their mutual goals are

met To combat competition, Human Resource (HR) department should evolve itself

with the transformation . The companies human resources activities should ensure in

overcoming this type of crisis. To tackle this situation new human resources issues and

initiatives should be practiced in the organization. human resources outsourcing is one

such activity.

Weatherly, LeslieA (2005), Companies and the industries are outsourcing their human

resources business processes numbers to effect improvements in efficiency, service and

cost. vendors are promising quality service, reduced costs to the organizations. With

this mutual state of things human resources outsourcing has become very successful

globally.

Herbertson, IainManager(2000) discusses the advantages of outsourcing the human

resources (HR) function of a business by the effectiveness of the human

resources department of the Millennium Dome in Greenwich. Process involved in the

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3464

selective outsourcing of human resources recruitment program implemented by

manpower, success of the outsourcing is dependent on the competence of the staff.

Bendorf, MichaelBarge, Bruce N.de Mesa Graziano, Cheryl11

(2005), deals on the

issues of the outsourcing of human resource services. U.S. companies are building

value laden relations in building ties between the finance and human resource

functions. This change is to the realization that human capital is the most valuable asset

and greatest cost to many organizations that examined the opinions of human resource

(HR) and finance personnel on the outsourcing of human resources activities in order to

increase value. The findings reveal that both departments agreed that drivers

of outsourcing were primarily to provide access to improved information, technology

and service levels in addition to cost reductions.

Rison, Richard P.Tower, Jennifer (2005), study focuses on reducing the cost of human

resource (HR) and continue to provide value: Human resources has the responsibility

on which aspects costs should be based on .Many companies will make changes in the

budget cuts to respond to expectations from senior management to lower costs. This

strategy only serves short-term results, but does not help a company achieve its long-

term goals.

Jie Shen (2005), reviews the selected literature in human resources outsourcing. The

origin of human resources outsourcing can traced back to 19990’s.It’s growth rate was

modest in the beginning, was rapid in the next stage and is future anticipated growth.

The effective management of human resources outsourcing greatly lies in selecting the

right human resources vendors, ensuring service quality, building strategic relations

and managing the enterprise.

David W. Conklin (2005), have expressed varied of opinions about the risks and

rewards of outsourcing companies' human resource activities, including the entire

business process. This research paper takes into account very preliminary cases of

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3465

human resources outsourcing. Human resources departments can always be the

strategic influencer of change management in the organizations. The managers can

always take into account the earlier lessons when outsourcing human resources

functions.

Jean M. Hiltrop Per V. Jenster, Herna Martens (2001),in the twentieth century

organizations grew rapidly which gave ample scope for career opportunities Advent of

globalization made many organizations to go for cost cutting and outsourcing non core

activities to the specialist vendors. Speed and flexibility dominate the organizational

functioning. Organisations are reducing number of full time employees. As the markets

are becoming supply driven, organizations are finding hard times in employing

permanent and full time staff, they are more depending on contractual or the part time

staff.

Peter Brown (2010) reveals how a business can create high performance workforce

who become a competitive advantage and who can’t be replaced. Research reveals

that human resources is not too simple nor too complicated to outsource. Human

resource functions has to aligned with business strategy, to support the achievement of

goals with the available infrastructure. and costs have to be reduced. Outsourcing can

play a strategic role to help the organization to achieve their goals.

Dr. Bharat Vagadia1 (2012) found out that outsourcing industry is relatively new,

which made an impact on the world scene two decades ago, it has gone through a

dramatic evolutionary changes..Organizations have drifted from transactional

outsourcing to strategic outsourcing to the stage of transformational outsourcing. and to

the stage of innovative outsourcing. The research focuses on the revolutionary journey

from one stage to another in the outsourcing scenario. It deals in various types of

outsourcing like of travel and logistics outsourcing, Finance and accounts.

http://link.springer.com/search?facet-author=%22Dr.+Bharat+Vagadia%22


3466

.CONCLUSION

Organizations have to continuosly ,update and upgrade the systems to improve the

overall performance in line to the demands of the changing business environment and

competition.Major Responsibility lies with the HR Department as a catalyst for the

change Process. By imbibing the change process the organization should not incur any

risk and major responsibility which disturbs the normal functioning of the organization.

It can be concluded that the existing HRM system without risks and responsibilities is

comparatively high in Pharma industry than in IT. There is a considerable significant

impact of HR outsourcing in the performance planning and goal setting, performance

evaluation, training and overall performance management system between Pharma and

IT industries. It can be concluded that there is no considerable significant impact of HR

outsourcing on employee performance records for promotional decisions between

Pharma and IT industries. Therefore, it was also inferred that there is no considerable

significant impact of HR outsourcing on employee performance records for

promotional decisions between Pharma and IT industries. Finally it was concluded that

that there is no considerable significant impact of HR outsourcing on Performance

Management systems of both the IT &Pharmaceutical sectors Finally it was observed

that the organizations in Pharma and IT Sectors are concentrating more on strategic

performance management Systems.

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HR OUTSOURCING ON THE PERFORMANCE MANAGEMENT …