The Changes in Work Organization Affecting the Role and Purpose of HRM - Article Example

How do you see changes in work organization affecting the role and purpose of HRM' Introduction: The last decade in general and the period since mid 2002 in particular have been tumultuous for organizations all over the world. Greatly admired companies like Enron bit the dust while those like IBM which were close to being written off, staged a splendid recovery. Many glamorous technology outfits disappeared while old economy outfits like Wal-Mart likely to continue to post impressive results. In an age when management gurus made noises about customer delight, Southwest Airlines succeeded by offering no-frills services. In the rapidly commoditizing PC industry, Dell continued to be profitable with its direct selling approach while older rivals like HP struggled. Sun Microsystems, arguably one of the most innovative companies in the computer industry, found itself in deep trouble. Clearly what works and what does not in business remains as unpredictable as ever while some seemingly mundane businesses managed by 'ordinary' people rewarded share holders handsomely, many 'high-tech' businesses which showed great potential when they started off, folded up. Indeed the changing environment and the speed of changes posing greater challenges to organizations. Changes in every aspect of the organizations have increased the uncertainties. Discussion: Changes in technologies have increased access accessibility, visibility and connection. The connected world is smaller, changing rapidly and has more open information customer have become increasingly segmented and persnickety. Investors have become increasingly attended to and actively concerned not about financial results, but intangibles. Employees represent increasingly diverse demographic backgrounds including not only race and gender but personal preferences, global and cultural backgrounds and orientation to work, competitors come from both traditional large global players and increasingly smaller innovators. And all of these factors occur in the context of global business organizations where what happens in one corner of the world affects business throughout the world. Many spend enormous amounts of time specifying these trends and their implications on work organizations. Most of these trends are outside the control of anyone individual or any one organization. They occur in both predictable ways. They affect all aspects of work organizations from how to fund an organization to how to position the firm in customer minds and how to engineer and deliver products. Apart from affecting other aspects of the organization, changes affect the human resources. To be effective in this boundless world, organization members need to adapt to customers, systems and techniques different from their own. Human resources must ensure that employees with the appropriate mix of knowledge, skills and cultural adaptability are available to handle any work assignment with in the organization. HRM must also develop mechanisms that will help diversified employees work together. It is the duty of the overall HR managers to make every effort to acclimate different groups to each other, finding ways to build teams and thus reduce conflict. It is increasingly being realized now by working organizations that due to rapid changes in technologies, world moves towards borderless economies, and as businesses become global, one of the successful business is to understand and manage its human resources strategically and competently. Today HRM has acquired and even more central role in building sustainable competitive advantage for the work organizations. As a result of these developments, HRM has become a major thrust area where, the focus is on synergizing and propelling organizations to seamlessly integrate with the macro environment changing environment and hyper competitive situation forced work organizations to adopt quickly and HR systems and roles play vital role in surviving in such situations. The traditional HRM has changes a lot due to change in macro environment of business, Many work organization do not assess the short-term or long-term implications of their HR policies and practices, which Ulrich (1997 a) emphasizes. According to him, "In the 21st century, HR roles are that of strategic partner, administrative expert, employee champion and change agent". Pfeffer (1998) and Ulrich (1997b) are of the view that most effective work organizations are serious about treating their employees as assets to be invested in the real and potential customer base. In the changing times, HR is to provide results in all the areas. These deliverables must be responsive to an increasingly competitive and global market place and must be closely linked to strategic plans of business. One of the major responsibilities of HRM is to prepare itself for change and to prepare for as many of these challenges as possible in order to exploit competitive advantage. Rapid changes in work organizations force the organization to adopt such HR policies and practices which must be flexible in nature in order to adopt itself to changing situations. Further the key to sustained competitive advantage is building and sustaining core competencies within the organizations and maintaining flexibility in order to react quickly to the changing global market place. In turn, the incredible advances in technology has had to positive effect on internal operations for organizations but it has changed a lot, the way HR managers work. They work and provide support in what have become integrative communication centers. The fast changing environment reminds us that for a business to survive, it has become essential to focus on its core competencies and keep ahead of its competitors through innovation. Many industrial/organizational psychologists as well as HRM academics give emphasis on the people's role in organizational growth. It is now being realized that to attain and sustain competitive advantage the business needs to add values to human resources and customers. The new sources of sustainable competitive advantage available to organizations are people with creativity and talent, inspiration and hopes, dreams and excitement (Pfeffer, 1994). It is being increasingly realized that organization capability largely derives its strength from an organization's HRM practices. This in turn takes full advantage of the other capabilities of an organization. In the new economic scenario, human element has taken the centre stage and has grown in importance as a critical ingredient for gaining sustainable competitive advantage. Change in working organization necessitated the change in role and function of HRM in the organization. There may be a change in the culture of an organization if there is collaboration with some country or there may be a philosophical change in the leadership due to changes in the political scenario leading to internal changes in process. Prevailing socio-economic and technological bent of a country might be considered as external factors. These in turn have an impact on HR strategies which affect the HR related issues, work systems, rewarded and industrial relations. This helps in the achievement of organizational objectives and strategies leading to overall HR outputs. Hendry and Pettigrew (1992) suggested a model for strategic change and HRM. In their model, they focused on definition, specific roles and organizational outputs which have a direct influence on the HRM context in terms of HR flows work systems, reward systems and employee-relations. They further commented that while change in HR practices can be conceived as a response to business strategy, the scope of HRM to respond effectively is, therefore limited by its role and resourcing. HRM is a people oriented concept with emphasis on the maximization of individual skills and motivation through consultation with work force so as to produce high levels of commitment to the organization's strategic goals. Changing work organization forced HRM to utilize its resources to its fullest capacity- a key transition from a managerial emphasis on control to the facilitation of employee commitment (Walton 1985 a, 1985b), which differentiates the traditional personnel practices from HRM. In terms of employee relations, this represents a shift from a pluralist collective, low trust approach to a unitarist one emphasizing individuals, team work and high trust. Beardwell and Holden (1997) said that, "HRM continues to provide agenda and prescription for debate among practitioners and analyst that are contentions, compelling and have no settled orthodoxy'. They identified four broad perspectives for analysis, which are as follows: HRM is no more than remaining basic personnel function, which is little or no different from traditional practice of personnel management; HRM represents a fusion of personnel management and industrial relation which is managerially focused and drives from the managerial agenda; HRM represents a wider conception of the employment relationship and the incorporation of an enabling and developmental role for the individual employee; HRM can be viewed as a part of the strategic managerial function in the development of business policy in which it plays both a determining and contributory role. Now due to frequent changes in work organizations, the role and purpose of HRM has to change accordingly. The need to convert the human resources of an organization into a competitive advantage implies that HRM must be considered as the most vital area in both formulation and implementation of the organization's competitive strategies. The new HRM system must be attendee to the demands of business strategy. For any particular organizational strategy, there must be a matching HR strategy and the way people in an organization are managed needs to be aligned with corporate business strategies. Whenever any change in the organization occurs, whether external or internal, organizations formulate an overall strategic plan. The role of HRM becomes very important in this environmental scanning. In the changing scenario of business environment, organizations tend to build their new strategies on HR based organizational capabilities for competitive advantage. It is probably more useful to figure out how to adopt HR so that it can adapt to and thrive in the work organizations. To adopt in the new situation of work organizations, HR professionals have moved beyond administrative wok in the process of linking their work to overall business strategy, and this strategic approach is turning into reality. HRM has witnessed two transformations since the 1980's. The first transformation is from personnel management to HRM. It changed the overall outlook about how people in organizations should be managed. HRM systematically involved coordinating the shape and substance of several traditional personnel policies and practices. More recently the transformation from HRM to strategic HRM is based on the recognition that in addition to coordinating HR policies and practices with each other, they need to be coordinated or linked with the needs of the organizations. The corporate office and the HR functions are singled out for their roles in leading the efforts to add value to shareholders or to the business. The strategy that complements the business strategies identified with the role of the HR function itself. Martell and Carroll (1995) in their survey of 115 subsidiaries of 500 companies found out that majority of them had integrated HRM and strategic planning systems in their organizations. HRM issues were implicitly discussed in strategic plans and HRM executive were involved in the planning process as strategic partners. HRM was recognized as playing an important role in implementing business strategic plans. The focus is online managers and HR professionals together as tools for competitive organization. The issues involved are line staff; HR professionals; outside vendors; metaphors for successful HR professionals; HR proactive, reactive or anticipatory initiatives for employees; customers investors; the criteria for successful HR practices for financial measures; employee morale and market share. The HR functions have transformed it by eliminating HR systems and practices long held to be central pillars of effective HRM. The corporate HR staff would be composed of few key subject matter experts in the field of compensation, management development, diversity, organizational effectiveness and finally HR functions which should have line executives who have shown success in leading organizational change. The present HR professionals are continuously searching for more appropriate measures which could be closely align with the mission of the organizations. They feel that HRM is too important to be left to HR specialists. General Managers of the organizations has been involved to make HRM successful. They stressed that the basic issues in HR must be laid out in non-specialist terms to understand the basic economic, social psychological and legal forces that impinge on employment. According to them, HR policies are part of systems and capital investment and not the cost only. Ulrich (1998) remarked that when employees focused HR practices shift to customer- focused HR practices, employees and customers both win. Employees win by seeing their work add values to customers, by enhancing their ability to adopt their work quickly to need customers needs, by becoming more intimately involved with satisfying suppliers dedicated to their needs, by reducing the cycle time needed to change how work gets done. HRM has changed its traditional face and adapting to environmental and organizational changes very fast. Ever changing situations in business environmental always needs to change in HRM policies of the organization to cope up with the change and to gain and retain competitive advantage which is critical to an organization's growth and prosperity. Organizations are strategically utilizing the infrastructural requirements to gain competitive advantage particularly through their HRM practices build competitiveness by allowing strategic implementation through environmental scanning, creating a capability to change, and instilling strategic unity in the organization. In these turbulent market conditions the key to success or failure depends on the people. People throughout the organization, formulate the strategy. The ability to harness the technology depends on people and its implementation. The people's advantage within an organization is achieved when the talent capability of the people is released to reach its full potential. The new role of HRM focuses on providing practical advice for ensuring that right people are recruited and right development occurs. HR executives must examine a number of specific issues relating to people such as motivation, leadership and communication which will have an impact on the organization's productivity. Flexible working patterns has been linked directly to new HRM strategies in terms of part -time working, shift working non-permanent employment and subcontracting or outsourcing. These changing work practices in the organizations changes employee-employer benefits and relationships, motivation employee development and training, the impact of legislation, the trade union response and the introduction of a European dimension, which would imply flexibility in organizations, individuals, trade unions and governments. In the new circumstances, HRM is focusing on the creation of value. In the changing business conditions HR professionals must master the talent, change, governance, intangibles, leadership, execution, globalization, performance management, communications and HR transformation. In changing times, HR professionals, practices and functions address these demands to create value. Conclusion: Finally, in the changing work organization situation, HRM policy must focus and change its role on the following aspects: Assuring talent means going beyond the platitudes such as the people are our most important asset and strategy follows people and investing time and resources to secure superior talent. Employees must be both competent and committed. Competent employees have the skills for today's and tomorrow business requirements. HR professionals may assess the extent to which their organization regularly attracts and keeps top talent and the extent to which the talent is productive and focused. Assuring commitment comes when leaders build an employee value proposition that ensures that employees who contribute more will in turn receive more of what matters most of them. HR professionals may track commitment through retention of top employee, by employee attitude survey etc. HR professionals, who build both competent and committed employees, ensure a flow of talent that helps the organization perform well overtime. HR professionals may help identify and shape their shared mindset, or firm brand, by building a consensus among their management team of what they want to firm to be 'known for' by its best customers in the future. Once a consensus is reached on this identity, they may invest in a series of actions to make the identity, real to both customers and employees. HR professionals must design an employee's performance appraisal form; it should reflect the strategy the employee is attempting to accomplish and what specific actions the employee should take to help accomplish the strategy. Rewards both financial and non-financial then reinforce the strategy and enable the employee to receive clear and definitive feedback on his performance. HR professionals must focus on innovation in all domains of their business. HR professionals may reduce cost through process people and projects. People improvements come from doing more with less through technology, teams and more efficient processes. Clearly, these are not the only capabilities that HR professionals working with leaders may install into an organization. But, they are indicative of the types of capabilities that make intangible tangible. They delight customers they engage employees they establish reputations among investors and they provide long term sustainable value. In the changing environment and work organizations, HRM must be done to ensure that employees' administrative concerns are treated quickly and accurately. After analyzing the new HRM roles we come to the conclusion that HRM must transform through to build sustained value, HR professionals must work as a unified team. Embedded HR professionals may be called generalists, partners, relationship managers or business-based HR. HRM must focus on the knowledge and skills required to make sure that actions occurs in the right way. Effective change requires sure-footed, considerate people management, who can take employees through the process with minimum anxiety and maximum enthusiasm. The capacity for change may be increased by correctly using HRM tools and expertise. Organizations interested in becoming more adaptable to environment pressures and changes should hire people who are more flexible. HRM must emphasize that organizations should develop people so that they can realize that change is an important part of growth. Organizations should set performance standards for people to encourage flexibility and diversity and reward people for being innovative. In the changing scenario HRM must try to establish a fit or linkage between the existing business strategy and the HR systems, retaining enough flexibility to adjust the HR system as the strategies of business change. The model for HRM strategy fit that incorporates dimensions that enables the firm to find business strategy-HR system linkages. The success of the organization depends on the ability to have the fit and the ability to make adjustments, flexibility implies openness in thinking, adaptiveness to environment, evaluate markets, competitors and to quickly accomplish reconfiguration, transformation ahead of competition liberalization, informal attitude, resilience in systems, agility in action etc. HRM is all about having flexible people management policies. Then must focus on multi skilling, upskilling, new competencies, knowledge areas, new forms of contracts and need for lower employment cost performance system. So in a changing time, HRM has to take up above mention new roles and dimensions within work organizational setup. References: 1. Beardwell, I. and L. Holden. (1997). Human Resource Management: A Contemporary Perspective. London: Pitman. 2. Hendry, C. and A. Pettigrew (1992). "Patterns of Strategic Change in the Development of Human Resource Management," British Journal of Management, 3(3):137-156. 3. Martell, K. and S. Caroll. (1995). "How Strategic is SIHRM'" Human Resource Management, 34(2):253-67. 4. Pfeffer, J. (1994). Competitive Advantage through People. Boston: Business School Press. 5. Pfeffer, J. (1998). The Human Equation. Boston: Harvard Business School Press. 6. Ulrich, D. (1997a). Human Resource Champions: The Next Agenda for Adding Value and Delivering Results. Boston: Harvard Business School Press. 7. Ulrich, D. (1997b). "Measuring Human Resources: An Overview of Practice and a Prescription for Results," Human Resource Management, 36(3):229-301. 8. Ulrich, D. (1998). "Intellectual Capital=Competence*Commitment," Sloan Management Review, 39(2):15-26. 9. Walton, R. (1985a). "Toward a Strategy of Eliciting Employee Commitment based on Policies of Mutuality," In R. Walton and P. Lawrence (eds), Human Resource Management: Trends and Challenges. Boston: Harvard Business School Press. 10. Walton, R. (1985b). "From Control to Commitment In the Work Place," Harvard Business Review, 63(2):77-84. Read More