People Capability Maturity Model (P-CMM) Facing the Key HR Challenges of MSME in India: A Theoretical Approach

 

Jianguanglung Dangmei

Research Scholar, Department of Business Management, Indira Gandhi National Tribal University (IGNTU), Amarkantak – 484887

 

ABSTRACT:

Micro Small and Medium Enterprises (MSME) have a significant role in the growth of Indian economy and contribute to generating employment especially in the rural areas. But, the performances of the MSME in the globalization period have not been satisfactory as the number of sick MSME is increasing year by year. The MSME in India now face a tough competition from large industries and are not adequately equipped to compete with the global players. There are many challenges in the MSME of India and HR practices are one of the major problems. Many industries claimed that the P-CMM is a strategy for transforming an organization in the modern era by improving workforce practices progressively. Therefore, this paper specifically tries to enlighten the important of P-CMM and its relevant applications to solve the HR problems faced by the MSME of India.

 

 

1. INTRODUCTION:

It is a known fact that the MSME play an important role in the economic and social development of India. As these enterprises enter into a new era, there is a need on how to develop the capabilities of the workforce in aligning with the organizational objectives in the view of globalization. It is crucial for them to develop their own competent human resources with the market conditions to compete with the big industries. If these sectors have to survive alongside with the big companies, they will need to retain their key people and ensure that they have the right skills and competencies. However, there are serious emerging issues of HR practices posing challenges to the survival of MSME in India. Therefore, this paper emphasis on the framework of P-CMM which needs attention for revamping the HR practices

 

2. OBJECTIVES OF THE STUDY:

Following are the main objectives of the study:

(i) To study the Human Resource challenges of MSME in India.

(ii) To understand the concepts and significances of P-CMM for revamping the HR practices of MSME in India.

 

3. RESEARCH METHODOLOGY:

It is exclusively based on the secondary data that focuses on the theoretical and practical knowledge of P-CMM that could revamp the HR practices in connection to the MSME poor performances in India.

 

4. HUMAN RESOURCE CHALLENGES OF MSMES IN INDIA:

Sonia and Kansai (2003) tried to understand the effect of globalization on MSME in India from 1973-74 to 2008-09 and their study concluded that MSME failed to put up impressive performances in the post-reform era.  It has been identified that the main problems of small enterprises are attracting talent, motivating and retaining the key employees (Singh and Vohra, 2005). They do not have formal HRM policies, but they follow only some of the HR practices like recruitment, selection, training and development (Srimannarayana, M., 2006). The reasons behind the numbers of sick MSME which are increasing year by year have been found to be the ancient production process and less employee morale (Pandey, A.P. 2007). Inadequate wage and salary, lack of incentives, bonus, social security and wellbeing measures, labor market victimization and absence of trade unions have also been identified as major issues in smooth running of the SMEs (Srimannarayana, M. 2006; Vettriselvan.R., and Balakrishnan. A., 2011; Narware, P.C. 2011). Recently, it has been found that the shortage of skilled labor and managerial incompetence emerged as key hurdles in the SMEs of India (The Financial Express, 2011).

 

5. PEOPLE CAPABILITY MATURITY MODEL:

It is a maturity framework that focuses on the continuous improvement of management and development of human assets of an organization (Curtis B. et al., 2009). It emphasizes on the improvement of workforce capability and addresses critical people issues in the organization. It is intended to develop individual capability, building work groups and culture, generating motivation and managing performance, and shaping the workforce. It is a guideline for an organization on how to attract, develop, motivate, organize and retain the talent needed for organizational development (Cutis B. et al., 2003).

 

6. UNDERSTANDING THE CHARACTERISTICS OF MATURITY LEVELS OF P-CMM:

There are five maturity levels in the P-CMM. They are (i) Initial, (ii) Managed, (iii) Defined (iv) Predictable and (iv) Optimizing (Curtis B. et al., 1995). The details of the content of each maturity level are given in Fig1 below.

 

Fig1. The five maturity levels of the P-CMM

(Source: Curtis, B., Hefley, B., and Miller, S. A. (2009). People Capability Maturity Model

 (P-CMM) Version 2.0, 2nd ed., Technical Report, Software Engineering Institute.

 

(i) Level 1: Initial:

According to Curtis et al. (2002), organizations at the initial level have difficulty in retaining talented individuals and the workforces at this level are often ad hoc and inconsistent. Organizations exhibit four characteristics at the initial level: inconsistency in the performances, displacement of responsibility, traditional practices and detached workforces (Curtis et al., 2009, p. 15). Some other characteristics at the initial level are lack of relevant knowledge or skill, unclear objectives or feedback, work overload and environmental distractions (Curtis et al., 2009, p. 21). Managers often lack skills and put little importance on evaluation and improving the ability and performances of people who report to them (Curtis et al., 2002). Managers do not have the ability to systematically build up the competitive capability of the workforces. They do not accept developing the workers as a personal responsibility. They only perform workforce activities such as interviewing job candidates, conducting performances appraisal with little preparations leading to poor staff decisions or disgruntled employees. Furthermore, individuals pursue their own agendas and consequently turnover is high (Curtis et al., 1995). Therefore, organizations at the initial level have difficulties in retaining workers and lack common purpose on management responsibilities as well as there is high employee turnover rate (Rothman, 2001).

 

(ii) Level 2: Managed:

At the managed level, the goal is to integrate basic management discipline into workforce activities through repeated practices and focus on managers to take responsibilities for developing and implementing relevant, appropriate and interactive practices for employees. The practices consist of communication, coordination, staffing, work environment, compensations, performance management, training and development (Curtis B. et al., 1995, 2009). The primary objectives at the managed level are to eliminate problems and build the workforces to perform their work responsibilities effectively. The practices are to ensure that the workers have the required knowledge and skills to perform their current assignment. In doing so, the workers start to grow and develop their workforce responsibilities seriously and show greater consistency in the performances within their group (Curtis B. et al., 1995). It also focuses on improving the capability of the workforce and making activities as personal responsibilities of their job. These practices build a foundation for attaining a higher level of maturity in the organizations. The significant of the practices at the managed level is to get rid of the frequent failure of organizations improvement programs as the programs often fail due to unprepared management team. The basic practices address the immediate problems of the managers and equip them for more complicated practices at higher levels. It creates mangers that are vigilant to problems that hamper performances in their units and starts to manifest commitments in the organization to continuously improve the knowledge, skills and performances of its workforce. They demonstrate these commitments in policies and providing the resources needed to support the basic workforce practices. They also reinforce these commitments by holding all managers accountable for the performances of workforce practices in their respective units. Subsequently, managers are focused on individual performances and coordinating individual’s performances into effective unit performances. Therefore, at the maturity level 2, organizations activities are characterized by developing workforce capability of units to meet commitments and this capability is attained by ensuring that people have the right skills required to perform their assigned works.  The benefits organizations received when they execute the improvements guided by the P-CMM in the managed level are reduction in voluntary turnover and poor relations with the immediate supervisors (Curtis B. et al., 2002).

 

(iii) Level 3: Defined:

According to Curtis B. et al. (2002), at the defined level, organizations clearly discover core competencies and bring into line with business strategies and objectives. It is integrating the practices and capability of the workforce to strategic business objectives. It is to increase the competitive advantage by developing the various competencies that must be integrated in its workforce to accomplish its business activities. Each workforce competency constitutes a distinct combination of the knowledge, skills, and process abilities required to perform some of the business activities that add to an organization’s core competency. These workforce competencies are critical pillars that hold the strategic business plan and their absence poses a severe risk to strategic business objectives. After the workforce competencies are well defined, the management executive focuses on systematical training and development practices enabling development in its workforce competencies. At this level, it is competency-based processes for defining workgroup roles and operating processes. Workforce now organize themselves by applying standard competency based processes rather than relying only in the interpersonal coordination skills developed at managed level. They are empowered to make decisions about the business activities as they have the knowledge and skills that are needed to achieve a superior level of performance. Thus, a common participatory culture is developed through empowering workgroups. As a result, the entire workforce starts to share responsibility for developing increasing levels of capability in the organizations. The organization must build an environment that involves people in decision making about their business activities to use the ability of the core competent of the workforce.

 

(iv) Level 4: Predictable :

Curtis B. et al., (2002) stated that the organizations properly handle and manage the capability of the workforce competencies at the predictable level. It is sustained through formal mentoring converting workforce capability and performances quantitatively. Organizations can predict the workforce capability as it can be quantified through the competency-based processes they use in performing their assignments. Organizations preserve the results of the performing competency-based processes to be reused by others due to its high effective performances. In the process, they put trust in the method through it was produced and use the processes that have been proven effective. This trust in the methods gives the managers the confidence to empower workgroups. Managers then transfer responsibilities and authority for the committed workers with the belief that the workers have the competent to perform work effectively. Organizations use these data generated by the competency-based processes for planning, improvements, evaluations and take corrective action when necessary. These data enable the management to make more accurate predictions and better decisions (Curtis et al., 2002). Mentoring, organizational capability management, quantitative performance management competency-based assets, empowered workgroups and competency integration are the expected areas for in implementation in the level 4 (Curtis et al., 2002, 2009).

 

(v) Level 5: Optimizing:

The main priority at the optimizing level is focused on continual improvement. The results of the quantitative management from the level 4 are utilized to guide improvements in the optimizing level. Individual workers are encouraged to make continuous improvements. This level aligns personal, workgroup and organizational competencies to achieve workforces continuously. It helps the organizations to attain workforce innovation, organizational performance alignment and continuous capability improvement (Curtis et al., 2002, 2009).

 

7. The Key Process Areas of the P-CMM:

The key process areas (KPA) explore and identify the capabilities that are required to achieve a particular maturity level. They illustrate the practices that an organization must implement to improve its workforce capability at each maturity level (Curtis et al. 2009). The details of the key process areas of the P-CMM are shown in the Fig2 below.

 

Fig2. The Key Process Areas of the P-CMM

Source: Curtis, B., Hefley, B., and Miller, S. A. (2009). People Capability Maturity Model (P-CMM) Version 2.0, 2nd ed., Technical Report, Software Engineering Institute)

 

 

8. PROCESS AREA THREADS IN THE P-CMM:

The process area threads consists of four themes that run through the P-CMM: (i) Developing capabilities, (ii) Building teams and culture, (iii) Motivating and managing performance and (iv) Shaping the workforce. These four themes address the key process areas linked across maturity level. Further, the implementation of key process areas at one level is seen as establishing the basis for practices and capabilities at the next level. These themes facilitate in understanding the structure of the model and the relationships among the key process areas within the P-CMM (Curtis et al. 2009) as given below in Fig3.

 

9. SIGNIFICANCES OF P-CMM FOR MSME OF INDIA:

Curtis, D.B. et al (2002) clearly identified that P-CMM is a strategy for transforming an organization by improving workforce practices progressively. The P-CMM not only addressed turnover but also increases workforce moral, productivity gain and provides an over organizational improvement strategy (Curtis, B., 2003). It is a promising technique in the human resource subject and an emerging approach in human resource management for organizational development (Curtis et al., 2009). It is a well set course of actions that hold distinctive transformation in each progressive level by aligning with the objectives, performances and changing

needs of the organizations (Pulikkalakath, 2007, p. 5). The P-CMM framework creates a working environment where practices are repeated; best practices are transferred among groups and enhances the capability of the employees (Curtis B. et al., 2009, p. 13). It provides opportunities to career potentials and motivation to improve performances than before (Curtis B. et al., 1995, 2002).  It is a roadmap for evolutionary development from ad hoc and inconsistent performances to mature elevating and superior performances contributing to the organization’s capability offering high-quality products and services (Curtis B. et al., 2009).

 

 

Fig3. Process Area Threads in the P-CMM

Source: Curtis, B., Hefley, B., and Miller, S. A. (2009). People Capability Maturity Model (P-CMM) Version 2.0, 2nd ed., Technical Report, Software Engineering Institute

 

 

CONCLUSIONS:

This paper finds that the P-CMM is highly relevant to overcome the key HR challenges in the MSME of India. If the executive managers strictly follow the protocol of each maturity level of the P-CMM, it will bring tremendous changes in the HR practices developing highly competent skilled workforces needed for the continuous growth of the MSME. Therefore, it is suggested to the HR managers to introduce P-CMM for revamping the HR practices of MSME in India.

 

REFERENCES:

1.        Curtis, D. B., Hefley, W. E., and Miller, S. A. (2002). The people capability maturity model: Guidelines for improving the workforce. Addison-Wesley.

2.        Curtis, B., Hefley, B., and Miller, S. (2009). People capability maturity model (P-CMM) version 2.0 (No. CMU/SEI-2009-TR-003). Carnegie-Mellon Univ Pittsburgh Pa Software Engineering Inst.

3.        Curtis, B., Hefley, W. E., and Miller, S. (1995). Overview of the People Capability Maturity Model (No. CMU/SEI-95-MM-01). CARNEGIE-MELLON UNIV PITTSBURGH PA SOFTWARE ENGINEERING INST.

4.        Curtis, B., Hefley, W. E., and Miller, S. A. (2003). Experiences applying the people capability maturity model. Crostalk-The Journal of Defense Software Engineering, 16(4).

5.        Narware, P. C. (2011). Human Resource Management In Small Scale Pharmaceutical Industry In Madhya Pradesh. International Journal Of Enterprise Computing And Business Systems, 1(2), 1-13. Available online at http://www.ijecbs.com/July2011/4.pdf.

6.        Pandey, A. P. (2007). Indian SMEs and their uniqueness in the country. Available at https://mpra.ub.uni-muenchen.de/6086/1/MPRA_paper_6086.pdf.

7.        Rothman, J. (2001). Crisis? what crisis? A contrarian perspective. Cutter IT Journal, 14(6), 19-25.

8.        Sonia and Kansai Rajeev (2009), “Globalisation and its impact on Small Scale Industries India” PCMA Journal of Business, Vol. 1, No. 2 (June, 2009) pp. 135-146, ISSN0974-9977. Available online at http://www.publishingindia.com/Uploads/SampleArticles/PCMA-Sample-Article.pdf.

9.        Singh, M., and Vohra, N. (2009). Level of formalisation of human resource management in small and medium enterprises in India. Journal of Entrepreneurship, 18(1), 95-116.

10.     Srimannarayana, M. (2006). Human resource management in small business. Indian Journal of Industrial Relations, 313-334. Available online at http://irjbm.org/irjbm2013/Sep2014/rpaper5.pdf.

11.     The Financial Express. (2011). FE Round Table on small and Medium Enterprises. SMEs face many Human Resource challenge. Available online at http://www.smechamberofindia.com/MediaCoverage/ROUND_TABLE_15_Feb_2011.pdf

12.     Vettriselvan, R., and Balakrishnan, A. (2013). Human Resource Management Practices in Micro, Small and Medium Enterprises of Madurai District. International Journal of Applied Management Research, 5(5):59-62. Available online at http://irjbm.org/irjbm2013/Sep2014/rpaper5.pdf.

 

 

 

 

Accepted on 20.03.2017          © A&V Publications all right reserved