We don't hire a person, we hire a family

If you have worked in an Indian business family (including Reliance),  you would have noticed one or both of these things:
A. When an employee has an issue with the family (finances, child not listening etc) , they come to their manager (bade babu or seth ji), and a loan or a counselling session is arranged pronto. Sometimes, rules are bent to make this happen.
B. When a child graduates, the seth ji or bade babu calls the father and tells them to send the resume. The child is usually absorbed by the company.

You may also have observed this in domestic staff in India. We hire one person, then her relative joins as driver, another relative joins as cleaner, and the family is engaged. In villages, we are aware of entire generations of 2 families engaged in an employment relationship.

We're all in this together

If you come from Western business practices, you have possibly heard of a word - Nepotism. It is viewed as something negative. Something that takes opportunity away from a qualified person and gives it to someone who is friends or family with the decision maker.

So it will surprise you to know that in the Indian style of business, reference is the best qualification a person can have.

This is practised in two ways

A. We don't hire a person. We hire the family. 

During the industrialisation era, industries were built in the middle of nowhere. It was, therefore, important to build townships near the factories also. This led to bonhomie among the families of those working together.
Contrast that with Electronic City in Bangalore, where employees are expected to spend upto 4 hours a day in buses.

Whenever there was a company event, the entire family was invited to it. The manager made it a point to speak to the wives and convey his compliments. When a person got an award, usually, his wife and family were asked to come up to the stage with them to collect that award.
Contrast that with today, when the families go to ONE family day a year and all award functions are usually held without the family in attendance.

B. Other things being equal, we hire someone we know. 

This was EXTREMELY important. This is why the entire social and religious structure of India is based on professions. Each profession was specialised. Training began early, and by the time a person was ready to join the workforce, they had already had over 10,000 hours of real training on it.

Even when education went from vocational to professional (read: 3R and formal schooling based), companies continued to hire from the family pool of employees if possible. When a child graduated, the father came first to Bade Babu to see if a vacancy was available in the same company.

Surat diamond industry labour is always hired from a certain community, and all the families are interlinked. So one individual cannot even dream of stealing and getting away with it.

The family sort of hangs out together

Why was this done? 

I am, of course, only hazarding a guess. 

1. It ensured employment stickiness 

Just like in story telling, we engage as many senses as possible, to make the experience richer for the audience, in employment, we need to ensure stickiness. After work, the person goes back to their family. If the family is also engaged with their employment, the employee's stickiness goes up many notches. The decision to leave is not an individual one. The wife has friends, the kids have friends, the boss's wife knows your wife. Its a complex web that one needs to extricate oneself from. Much harder than a resignation to one boss or even looking out for a job. 

2. Oh, the beauty of reference checks! 

Today, professional organisations struggle to do reference checks. They get identity proofs , they check educational qualifications online. And they still dont get relevant, qualitative information like whether the person has been corrupt or a predator in the past. Has the person demonstrated any domestic violence tendencies? Was he a bully in the previous organisation? 

In this method, which sustained for thousands of years before it became possible to do formal ref checks. A person would only recommend another if they were absolutely certain of their ability to deliver and their integrity. One puts one's personal credibility at stake. Its personal. 

Companies today try to hire through employee referral programs. Some of them are successful. However, in some key points, these programs differ from the Indian method of hiring who we know. 

For starters, the engagement level of the referrer is not so high that they feel that they are staking their personal credibility. Its a purely professional transaction. 

Secondly, the referrer and the referee are usually not allowed to work together, which beats the entire purpose of referring. Why would I want to bring my friends into the company if I can't work with them? 

Conclusion 

Was it the best way to hire? 

We don't know. But unlikely. There is no one best way to do things. We do what works for us. We learn from multiple sources. This is one of them. 

Is it applicable today? 

Depends. On the industry, company, and the organisation culture. 

Should i use it?
Not without adequate checks and balances, and training. Indian business practices cannot be applied piecemeal. They have to be understood deeply, imbibed, practised in everyday life, and then used as a specific method in business. Business empathy comes from personal empathy. We first spend years being empathic in our homes, putting people first. Then, when we listen to an employee, we do that with genuine concern, not to put a tick on the HR checklist.
I leave you with that thought.