CSR FOR HR

INTRODUCTION
Business performs a number of roles in the society. This role tends to change over a period of time. Unless business performs well on economic fronts it will not have resources to discharge its responsibilities to the society. In the words of Jean Jacques Rousseau Society and corporations must co-exist and contribute to the well being of each other. In similar context Benjamin Franklin observed doing good is not a private act between a bountiful giver and a grateful receiver, it is a prudent social act. Of late, business has come to realize that enterprises are born out of the society and ust therefore serve it for their own enlightened sustenance. Business draws its most important resource namely, human resource from the society. Thus business becomes responsible to share the burden of the society to mentor the community and also to enrich it. In this regard, an increasing number of enterprises have embraced a culture of CSR. CSR is not an optional add-on service. It is directly linked to the concept of sustainable development integrating economic , social and environmental impact in its operations. CSR is voluntarily adopted. It is over and above legal requirements.

OBJECTIVES OF THE STUDY:

To understand HR's CRUCIAL ROLE FOR SUCCESSFUL CSR To understand different CSR activities in Indian corporate 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 secondary data. Secondary data It was collected from various books, articles, journals and blogs on CSR . LIMITATIONS OF THE STUDY: The study does not consider each and every company i.e. only few companies are taken as examples.

The study deals more in terms of Indian corporates i.e. more focus is laid on how CSR activities are carried out in Indian corporates. In the next section, we will look at how HRs contribution to CSR can lead to the betterment of humanity,starting from its internal stakeholders and extending into the community, while at the same time benefiting the organization via cost saving, increased productivity, and an improved company image. It will be shown that HR is not just a cost centre or a support function but rather a strategic business unit that can help steer a companys direction in order to achieve its objectives.

THE HR-CSR FRAMEWORK The HR-CSR framework proposed below has a specific focus on the role of HR in CSR development. Based on the Deming (1986) cycle and the Maon, Lindgreen & Swaens (2008) general CSR model, the framework consists of four stages: (a) planning and awareness, (b) implementation and process development, (c) monitoring and feedback, and (d) revision and institutionalization. PLANNING AND AWARENESS Vision, mission and values. For CSR to be successful, it must be integrated into the organizations strategy, structure, processes and culture. The highest level of CSR achievements would generally require CSR issues to be legitimized as an integral part of corporate identity (Fernandez, Junquera, & Ordiz, 2003, p. 642). The organization must also be transitioned from a target-driven culture to a value-driven culture that can sustain CSR (Lyon, 2004). In order to make this a reality, an organization can start with revisiting its vision, mission and value statements as they provide an explicit message to both the external and internal stakeholders about the organizations goals and priorities, which in turn drive actions and behaviors. Developing green products, engaging in fair trade, valuing diversity, and investing in employees are just some of the examples that could be incorporated into such statements. How does HR contribute to this particular area? First, as a strategic partner in the organization, HR should be actively involved in the setting of organizational objectives and any revisions of its strategic statements. As a department that is regularly liaising with all facets of the organization, it is well

positioned to provide a balanced view across divisions, with particular empathy for social and human-related matters that are key areas of CSR. Researchers (e.g., Fernandez, Junquera & Ordiz 2003; Kang, 1999) have suggested that a centralized unit/staff should be in charge of the CSR initiatives. If a steering committee is to be formed, HR should be playing a critical role on it. Leadership. objectives and In addition to aligning CSR strategies with corporate

values,

senior management must walk the talk in bringing CSR

initiatives to fruition (Chong, 2009). Leaders are responsible for the management of meaning, that is, orchestrating the process that engages the entire organization in crafting and identifying with the vision to create a compelling future (Ready, 1995, p. 19). They play a major role in creating and managing the organizational culture and climate (Schein, 1985). As figureheads and controllers of resource allocation, they have a strong influence on employee behavior and their commitment to CSR can set the tone for the rest of the organization (Rocha, Searcy & Karapetrovic, 2007, p. 89). As an example, Ramus and Steger (2002) found that supervisors behavior strongly influenced employees response to environmental issues the eco-initiatives. HR can have a major impact on CSR through its role in the recruitment of leaders and managers. Its recruitment advertisements can emphasize the corporate values on CSR and job specification involving knowledge, skills and abilities regarding CSR, while its screening process can focus on finding candidates with good CSR backgrounds and values that are consistent with the organizations CSR-oriented ones. Ideal candidates to advance CSR initiatives may need to have both transformational leadership characteristics to provide vision, engage stakeholders and drive changes (Portugal & Yukl, 1994; Szekely & Knirsch, 2005), and transactional leadership qualities to coordinate tasks, manage information, control finances, set objectives and monitor efficiency (Egri & Herman, 2000). Once leaders/managers are hired, by carefully selecting or formulating leadership development programs, HR can further help to foster CSR-oriented values amongst top management. Education and communication. CSR relies on the commitment and contributions of many organizational members, not just top management. Hence, the first step in mobilizing the collective employee effort towards CSR is to raise the overall awareness of employees on CSR matters. Fernandez, Junquera & Ordiz (2003, p. 644) comment that

an increase in awareness and knowledge of process and materials are some of the critical factors for CSR management particularly at the environmental front. Increasing awareness can be accomplished mainly through communication and education (Maon, Lindgreen & Swaen, 2008), like company statements newsletters/bulletins, formal training sessions, and policies, meetings employee or other

townhall

divisional/departmental discussions. Providing examples of CSR activities and success stories in its own organization or outside organizations would help in the establishment of values, norms and expectations.

Implementation and Policy Development

Almost all HR policies and processes have CSR implications as CSR sustainability requires a more holistic and integrated approach to people management (Wilkinson & Hill, 2001, p. 1497). Indeed, the effectiveness of CSR initiatives depends largely on the design of related policies and processes as well as the ability of the employees in implementing them. In this section, we will discuss the implementation aspects in four main areas, namely, talent acquisition and development, employee involvement, performance and rewards management, and ethics management. Talent acquisition and development. The implementation of CSR initiatives relies on knowledgeable and devoted employees with CSR-oriented values. As a 2002 Corporate Citizenship survey conducted by Cone Inc. indicates, 80% of US respondents would likely not work for an organization with a negative CSR reputation (Kotler & Lee, 2005, as cited in Chong, 2009, p. 107). Hence, having a good CSR reputation is important to attract CSR-talented individuals, but how does an organization newly embarking on CSR get to find and hire such individuals? The most obvious way is to have job advertisements clearly indicating the overall values of the organization and any CSR-specific job requirements (e.g., knowledge on quality control on environmental emissions, involvement in community projects, etc.). With the popularity of the internet as an informational tool and the net-generation coming into the workforce (Tapscott, 2009), designing a good website with easily accessible organizational and CSR-related information can be a very cost-effective way to improve the chances of finding the right individuals. In screening applicants, HR can make use of well-validated personality tests to

help reveal the applicants characteristics and values. Employing behavioral-anchored interviews is another good way to learn more about actual past CSR experience. It is often easy for one to just talk about what one values, but not so if HR requires the applicant to substantiate the claim with real past actions, which can be confirmed through reference checks. The reference check list should specifically include questions on the CSR area. After acquiring the proper talent, its the organizations responsibility to help the employee understand, adopt and contribute to progress in CSR initiatives. Training and development programs should, therefore, focus on:

Creating a CSR knowledge base (on social and environmental issues surrounding the organization, stakeholders interests, industry CSR norms and standards, etc.)

Teaching the necessary skills for CSR initiatives (letting employees learn the various working processes and methods so that work can be done most efficiently and effectively in a CSR-friendly way)

Developing the cognitive ability for handling complex CSR activities (so employees can see the big picture and inter-relations of CSR dimensions)

Promoting employee enthusiasm in CSR (by showing how they can make a difference that can positively impact the organization, themselves, and others)

Developing talent and skills serves a double rewarding purpose for CSR, namely promoting competencies needed for successful CSR initiatives, and increasing overall human capital, which in itself, is one of the goals of CSR

Employee

involvement

and

empowerment.

Employee

involvement

and

empowerment contribute to CSR in multiple ways. Allowing employees to be involved and empowered gives them better control over their work, which will improve their quality of work-life, an important social component of CSR. Workers knowledgeable about their work are often the best people to determine the way forward operationally on CSR, such as on waste reduction and equitable and efficient distribution. Workers input into process improvements can also directly improve the organizations productivity and profitability, which may in turn allow the organization to allocate more funds to CSR initiatives. Employee involvement can take many forms. At the lowest level, employees are simply informed of CSR decisions and initiatives. The next level may involve some

solicitation of input or feedback on the CSR initiatives, such as through open meetings, suggestion boxes, quality circles, joint-committees between employees and management, etc. This is followed by employee empowerment in which employees make autonomous CSR-related decisions in their work such as in autonomous work teams. An even higher level involvement will see employees serving on the organizations board to provide strategic CSR directions. According to Bansal (2002), allowing employees to have a voice in CSR could have a bandwagon effect that can change other organizational members mindset. Performance and reward management. The old saying what gets rewarded gets done tends to be quite applicable to organizational settings. Particularly, the Expectancy Theory postulates that employee motivation is a function of expectancies (probability of success in doing the job), instrumentality (probably of receiving a reward for the job performed), and valence (the value the employee placed on the reward) (Vroom, 1964). So, providing employees with rewards they value, either extrinsic or intrinsic, can motivate behavior for achieving the objectives of a task. How do theories in these areas specifically help to promote CSR implementation? Knowing that goals as well as both extrinsic and intrinsic rewards are both important factors influencing behavior, one can design appropriate performance and rewards systems to reflect the organizations emphasis on CSR (Maon, Lindgreen & Swaen, 2008). Some examples of CSR related goals and targets are: reducing waste materials by a certain percentage; being involved in specific community activities such as fund-raising for charities or providing a number of hours of community services; designing an equitable and more efficient distribution system that reduces the wait time for people in need of the product/services by a certain number of days; and providing mentoring and coaching sessions to other more junior employees on a periodic (e.g., weekly) basis to enhance their work-life experience. Ethics management Promoting ethical practices. Houghton, Gabel and William (2008, p. 478) suggest that the internal face of CSR involves not just legal compliance, but also ethical behavior that goes beyond the letter of the law. Areas of internal ethics management include respect for human rights, embracing diversity and providing equal employment and rewards opportunities to employees and job applicants irrespective of their demographic characteristics. More important is the building of an

organizational culture that supports ethical behavior in general that will impact both the organization and its external stakeholder community. HR can be the keeper and voice of ethics in organizations (Mathis, Jackson, & Zinni 2008, p. 25) as ethics is almost an inherent part of all HR policies and processes affecting employees work-life and livelihood. For example, without a good ethics culture and fair policies and processes, favoritism in staffing and rewards could easily set in, unsafe work conditions could be overlooked, misbehaviors could be condoned, and disciplinary actions could become arbitrary. To foster an ethical culture, ethics itself must be an integral part of the organizational values. If an organization is overemphasizing only the financial aspect, employees may be tempted to adopt unethical practices such as providing misleading information to customers to get sales or making up fictitious accounts to fool management into believing their superb performance.

Monitoring and Feedback (CSR Audit)

While the management of individual or group CSR-related performance has been discussed above under performance management, CSR monitoring and feedback involve a broader look at the overall CSR processes and outcomes, which can be called a CSR audit. Traditionally, audits are associated with ensuring compliance to legislation or proper financial reporting for the sake of the shareholders. With the pressures for more socially, environmentally, and ethically conscious organizations, CSR audit has emerged as a major trend, with many major consultant firms already offering such services to clients. Before an organization employs an external consultant to review its CSR performance, it should first look internally and do an HR audit with a focus on how well HR has contributed to the CSR initiatives. If the HR part is done right, the chances of success in other CSR endeavors outside of the organization can be expected to substantially increase.

Revision and Institutionalization

For areas that are not meeting the performance standards, it is important to investigate the root causes and rectify them. Is it due to a lack of support or resources, inadequate employees skills or knowledge, or some systemic policy and process issues? To make the changes, again top management commitment is needed. Sometimes, more realistic CSR goals may need to be set for the next period and increased resources may be required to support initiatives such as education and training. Policies and processes

may need to be revised to rectify previous inadequacies and oversights and to address changing circumstances. In other words, weaknesses identified in the CSR audit provide a basis for revisiting and revising the planning and implementation areas. For areas that are done well, many organizations make the mistake of just leaving things as is without making a purposeful effort to institutionalize the initiatives and their associated structures, processes, learning, and support systems. By

institutionalization, we mean having the initiatives become a formal, integral and sustainable part of the organization, often with explicit documentation on how it is supported and how things are done. Success does not come easily and when it does, it is crucial that the tacit knowledge from it will not be easily lost through changes in personnel or simply memory loss. Formal mentorship programs or establishing channels for information sharing can help the CSR knowledge transfer. Oftentimes, new initiatives tend to be seen as a novelty backed by enthusiasm. If the organization does not build on its initial momentum, the novelty will wear off and CSR initiatives will become ad hoc projects with little integration and consistency. It is important to note that failed CSR attempts can also provide good learning opportunities (on what not to do). The argument for HR people taking the CSR agenda seriously

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).

Research Work
1. In 2001, Tata Energy Research Institute (TERI) conducted a survey called Altered Images: State of CSR in India Poll and identified four models:

2. Ethical model: as suggested by Mahatma Gandhi where enterprises voluntarily

committed to public welfare and participated in national building.

3. Statist model: as developed by Jawaharlal Nehru which called for state

ownership of big business and discharging CSR.

4. Liberal Model popularized by Milton Friedman supporting private

ownership of business.
5. Stakeholders Model championed by R. Edward Freeman which advocated that

business should respond to stakeholders needs.

There is emerging evidence that effectively implemented, CSR can have significant impact in motivating, developing and retaining staff. Novo Nordisk, a highvalue CSR pharmaceutical company in Denmark, for example, after launching their Values in Action program, which aligns their business objectives with sustainable development principles, saw a 5% drop in staff turnover, while Sears found a 20% reduction in staff turnover since implementing their CSR program. (Skinner, 2002, p.1). A landmark international CSR study of human resource practitioners conducted by the Society for Human Resource Management (SHRM) in 2006, reveals that CSR practices are seen as important to employee morale (50%), loyalty (41%), retention (29%), recruitment of top employees (25%) and productivity (12%). [Note that percentages reflect Canadian responses] (SHRM, 2007, p. 27).

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. The 2010 list of Forbes Asias Heroes of Philanthropy contains four Indians. The 2009 list also featured four Indians. India has been named among the top ten Asian countries paying increasing importance towards corporate social responsibility (CSR) disclosure norms. India was ranked fourth in the list, according to social enterprise CSR Asia's Asian Sustainability Ranking (ASR), released in October 2009.

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. 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. According to Minister for Corporate Affairs, Mr Sachin pilot, one of the ways to attract companies towards CSR work is to develop a system of CSR credits, similar to the system of carbon credits which are given to companies for green initiatives. Moreover, in 2009, the government made it mandatory for all public sector oil companies to spend 2 per cent of their net profits on corporate social responsibility. Besides the private sector, the government is also ensuring that the public sector companies participate actively in CSR initiatives. The Department of Public Enterprises (DPE) has prepared guidelines for central public sector enterprises to take up important corporate social responsibility projects to be funded by 2-5 per cent of the company's net profits. Reliance Industries and two Tata Group firmsTata Motors and Tata Steelare the country's most admired companies for their corporate social responsibility initiatives, according to a Nielsen survey released in May 2009. As part of its Corporate Service Corps (CSC) programme, IBM has joined hands with the Tribal Development Department of Gujarat for a development project aimed at tribal in the Sasan area of Gir forest. As part of CSR Wipro, for example, inculcates CSR values amongst its workforce right at the beginning during the induction process Corporate presentations, keeping employees updated through mails, regular newsletters are the instruments used to keep employees energized about the organizations socially responsible initiatives.

The training of employees through CSR Living Our Values Learning Tool at Cadbury Schweppes (Young, 2006), the major global beverage and confectionary organization, has been a good example of partnership between HR and CSR. The company has also included social responsibility in the latest management development initiatives like the global Passion for People management skills programme. Best Buy, a fortune 100 company and the largest specialty retailer of consumer electronics in the United States and Canada, has initiated ethics training for its employees. Electronic Data Systems (EDS) has a global CSR strategy which is well supported by HR function and the employees (Redington, 2005). The HR department of the company has also developed an e-learning course for its employees built around the Department of Trade and Industry, CSR Competency framework. State-owned Navratna company, Coal India Ltd (CIL) will invest US$ 67.5 million in 2010-11 on social and environmental causes. Companies like Wipro, Infosys, Dabur, and ICICI have even framed whistle blowing policy, providing protection to the employees who come to know about any unethical practice going on within the organization, covering a whole gamut of subjects and showing their positive approach towards unethical practices. Public sector aluminum company NALCO has contributed US$ 3.23 million for development work in Orissa's Koraput district as part of its Corporate Social Responsibility (CSR). The Government moved amendments to the New Companies Bill to make CSR spend mandatory for most profit-making companies. Companies will have to necessarily spend two per cent of their average net profits in previous three preceding financial years towards corporate social responsibility. The CSR spend would be mandatory for companies that have a net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more in a financial year. 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. 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 must earn respect and affection of the community through good deeds and enlightened HR policies. CSR activities undoubtedly enhance the reputation , respect and the brand image of the company in the place they operate. This would inevitably improve their profitability, attract, and retain talent , increase savings, institute diversity and establish their strong foothold in their sphere of operation. In a larger sense , they ensure a better world for the generations to come. Moreover, an individual can significantly grow and learn by participating and connecting with the society. Individuals gain self- confidence and self-esteem by helping others. HR is a key organizational leader and can take the lead or partner with other executives to work cross-functionally to integrate CSR objectives into how business gets conducted. All will agree that effective HR leadership on CSR integration requires Board, CEO and executive commitment to be successful. The insights, knowledge and tremendous satisfaction one derives can be more enriching than monetary awards. It is the HR Professionals who can instill, nourish and stress the importance of CSR activities to the employees and management of the organization and make it a reality. The firm of the future is expected to have undergone significant transformation such that CSR no longer becomes managed as a separate deliverable, but is part of the experience of being an employee in an organization that lives its values.