Challenges of HRM in Contemporary Environment - Essay Example

Human Resource Management Introduction 2 Recruitment and Selection 2 Work Place Diversity 3 Gain Sharing 3 Working Environment 3 Training and development 4 Promotions 4 Contract 5 Conclusion 5 Bibliography 6 Discuss the major challenges of HRM in today's environment and outline ways in which organisations may respond to those challenges. Support with theory and good practice. Introduction Human resource Management deals with strategic and coherent application of management techniques required to maintain optimum efficiency of the work force employed. The role of the Human resource Management is evolving with the changing times with companies who are unable to attract and retain talent face serious risks of falling behind (Cornelius, 2001). Furthermore, the importance of the working environment, organizing the individuals, providing direction and keeping the work force motivated are key factors which play a vital role in obtaining efficient results from the labor force, thus emphasizing the increasing importance of the Human resource management departments (Connell, 2006). Advancements in the field of transport and communication, growing international trade and greater interaction of firms have lead to greater competition with in the growing world market. Organizations in search of better and more effective ways of production have identified the productivity of the labor force involved as the prime focus. The several techniques employed to tackle major challenges in the current environment are: Recruitment & Selection Recruitment and selection is a very important aspect for development of a strong workforce. Companies need individuals who are motivated and focused for excellence, individuals whose presence increases the productivity of not only the firm but also assists other employees to be more productive. Large corporations now incorporate assessments such as personality tests, aptitude tests along with a series of interviews to asses the ability of the applicant (Cornelius, 2001). Work-Place Diversity It has been an understood fact that interaction with in a group containing diverse members allows for a greater pool of innovative ideas, perspective and views according to their respective background to crop up. Such groups are very common in Multinational corporations (MNCs) (Connell, 2006). Such managements have to deal with strong local bodies combined with individuals transferred from other foreign countries who go through culture-based human resource management training to improve their ability to motivate the culturally diverse labor force. Gain Sharing The extensive emphasis on financial gains makes the technique of gain sharing very effective. This program refers to incentive plans where an employee in a common effort to improve the organizational productivity with the incentive that resulting increment will be shared between the company and the employee. Since the gain sharing is carried out on the effective increment in profits this technique does not cost the company while it motivates the employee to put in greater effort and take on greater responsibilities (Lauver, 2007). Working Environment Several researches on labor productivity identifies that a safe, peaceful and directed working environment greatly adds to the productivity of the labor force. Companies boast their ranking amongst the companies with the best working environment to attract talented individuals (Al-Lamki, 2000). An effective working environment means that each individual can feel part of the team; he or she is provided the best possible tools to work to his or her maximum ability. In the current times talented individuals are sought after vigorously amongst competing firms, firms try to lure in individuals with financial gains but creative individuals also have a need to full fill their own ambitions so they try to opt for firms that will allow them to be more productive (Legge, 1995). An effective working environment also assists in preventing labor turnover; employees who get adjusted into the firm and are satisfied with their projects are more unlikely to switch firms (Connell, 2006). Training and Development Training and development are now an integral part of human resource management. Companies are now investing large sums to help develop the skill sets of their work force (Cappe, 200). The training and development courses allow the work force to have greater skill sets to handle greater problems. They help the work force to see better prospects and superior targets, allowing them to associate closely with the company objectives and goals. Such courses also allow the worker to be more self reliant and be a productive member of the team. They also help build a sense of association with the organizations, motivating them in establishing a personal connection with the company so that they put in greater efforts (Legge, 1995). Promotions Companies now offer effective Management trainee programs where they hire individuals on a fast paced promotion program assessing the performance of the individual at every instant (Connell, 2006). Such fast track programs allow the individuals to receive quick benefits for their efforts, allowing them to set short terms personal targets (Legge, 1995). The level of motivation is also maintained as well as this system of quick promotions allows the more talented and hard working workers to go up higher in the management chain, with the company further benefiting from their skills as part of the management team. Contracts The new system employed by many firms in the current economic environment is to offer jobs on contract. Jobs on contract mean that the firm does not have to provide further benefits and perks such as provident funds or retirement plans. This means a major cost reduction for the firm, while it allows the firm to hold a stick in their hand as a full review is carried out at the time of renewing the contract. This put a constant check on worker as they are reminded that inefficient employer will not be offered new contracts (Bejou & Hartline, 2004). Conclusion In the constantly evolving times the key asset of production for companies is the labor force. The current economic climate requires the companies to find cost effective ways to improving their production system and the easiest way to improve this is by improving the production capability of the work force (King, 2001). But with easy job turnover companies need effective ways to keep the work force tide down to the firm because the investment in the development of the work force and the individuals leaves the company at risk to direct loss in terms of loss in investment, as the individual they invested in has left and become an asset of another firm (Laudon & Laudon, 2006). Large companies hence have been able to form a strong working force through effective Human Resource Planning and they continue to achieve greater levels of production with constant adjustments to their work force. Bibliography 1. Laudon, K & Laudon, J, 2006, "Management Information Systems - managing the digital firm", 10 edn, Pearson Education, New Jersey 2. Cornelius, N., 2001, "Human resource management: A managerial perspective", 2 Edn, Thomson Learning 3. Storey, J., 2007, "Human Resource Management: A critical text", 3 Edn, Thomson Learning. 4. Legge, K., 1995, "Human resource management: Rhetorics and realities", Chippenham: Palgrave. 5. Capon C, 2000, "Understanding Organisational Context", Financial Times - Prentice Hall 6. Bejou . D & Hartline, M.D, 2004, 'Internal Relationship Management: Linking Human Resources To Marketing Performance', Journal of Relationship Marketing', ------- 7. King S. W., 2001, 'Issues in Growing a Family Business: A Strategic Human Resource Model', Journal of Small Business Management, vol 39, no. 1, pp. 3-18 8. Al-Lamki S. M, 2000, 'Omanization: A Three Tier Strategic Framework for Human Resource Management and Training in the Sultanate of Oman', Journal of Comparative International Management, Vol 3,No.1, pp 55 Connell, J, 2006, 'Critical Thinking in Human Resource Development', International Journal of Employment Studies, Vol 14, no. 2, pp 105 Lauver, K.J, 2007, 'Get safety problems to the surface: using human resource practices to improve injury reporting', Journal of Leadership & Organizational Studies, Vol 14, no.2, pp 168 Organizational implications of Enterprise Resource Planning Introduction McKinsey 7S framework Strategy Structure System Shared Values Style Staff Still Conclusion Bibliography Organizational implications of Enterprise Resource Planning Introduction Enterprise Resource Planning is a software system employed to bring in company wide information of all resources and functions of a particular business entity. Enterprise Resource Planning software allows for integration of different departmental and functional areas effectively and efficiently (Turban, 2008). Large organizations comprising of several department witnesses that particular software's are not applicable on all departments, resulting in formation of a system which is not coherent and disjointed. Enterprise Resource Planning allows for comprehensive software which can bring together all functional areas hence allowing for effective communication between different departments. The implementation of the Enterprise Resource Planning software means that it has to be customized according to the needs of the organization but limited capabilities of customization of the software and complexity in implementation of the soft ware means that companies have to face organizational implications of the Enterprise Resource Planning software (University of Twente, 2009). The effect of the Enterprise Resource Planning software on this company will be studied through McKinsey 7S framework. McKinsey 7S framework McKinsey 7S frame work identifies three "Hard" elements and four "Soft" elements. This frame work postulates a model to identify the seven internal factors which need to be aligned to attain productive production (McKinsey 7S Framework, 2009). 1. STRATEGY Will the introduction of ERP into the company provide it with a competitive advantage The ERP software brings in the feature of information sharing in one single hub. This can be seen as a benefit with availability of perfect information, but introduction of enterprise resource planning is known to also introduce adverse organizational implications. Strategic advantage can be attained if specific information is shared through the company rather than general information sharing. Complete information sharing is necessary for higher management but the importance of such information on lower rank is unnecessary. The visibility of the information collected should be specific to relevant people. 2. STRUCTURE EPR can have two major impacts on the structure of the company. First of all, the setup of this system requires re-engineering of the business process to fit the "industry standard" this may lead to a loss of competitive advantage (Dehning, & Stratopoulos, 2003). Secondly, in large firms with multiple independent departments with separate mission, their integration into a single enterprise may result in limited benefits as well. To tackle this problem Enterprise Resource Planning would have to be applied in a way to maintain the necessary independence required for individual department. They should be provided information on need to know basis. Too much information sharing can lead to adverse results. In case of multi national deployment of the soft ware will require greater structural change. Not only will this structural change be expensive, while the significance of foreign information is not as relevant to domestic markets. Foreign information collected will only be helpful in assisting the central management to make decisions regarding the particular foreign branches. 3. SYSTEM The different systems of the firm which run an organization are such as financial and human resource system. Is there a need for total sharing of information between the two systems necessary to attain absolute efficiency The Enterprise Resource Planning enforces complete sharing of information, which may be irrelevant or unnecessary. This may also create interdependence with in departments blurring the company boundaries causing problems in accountability and lines of responsibility. Different departments can try to influence other department which is not a suitable situation for large companies. The idea of specific information is very necessary, here again. Department should be provided relevant information required for its efficient performance (McKinsey 7S Framework, 2009). 4. SHARED VALUES The introduction of Enterprise Resource Planning may affect the team structure in a corporate firm. Enterprise Resource Planning is said to be rigid and inflexible in customizing to the requirements of the firm. This means incorporating Enterprise Resource Planning will require extensive restructuring which can result in damage to the shared values. This could be met with a loss of confidence of the work force on the firm, which can also cause loss in motivation. Shared values are established through persistence with time and any change to them can result in major effect to the overall shared values (Mennecke, 2001). 5. STYLE The major impact of absolute information sharing of Enterprise Resource Planning is on the chain of command of the firm. Since all the information is pooled in one placed, the risk of theft is greater. Chances of critical information getting leaked are greater because greater number of workers have access to it. So the idea for pooling information can be instantly rejected for such sensitive information. So the resistance in sharing sensitive information between departments goes against the Enterprise Resource Planning system itself, leaving it incapable of achieving its purpose. 6. STAFF The Enterprise Resource Planning system is a very complex software system requiring specialized staff to handle the bugs. This means that after its expensive initial set up, the running cost do not go down because either an independent firm has to be contracted to look after the software, or permanent staff has to be hired for this purpose only. This issue will be of greater essence when staff will be required on off shore stations. This will mean much greater running cost. To curtail such high cost off the shelf soft wares could be used instead, which would be much cheaper to use. 7. SKILLS The Enterprise Resource Planning software does not assist any department in improving their individual skills. It only attempts to provide a forum for complete sharing of information with in the company. This forum can allow for greater interaction with in the firm and may help to develop a greater channel for learning but this channel would not be too significant to cause a realistic change (Qureishi, 2007). CONCLUSION The Enterprise Resource Planning software provides a base for information sharing with in the firm but the question arises, is complete information with in the firm necessary condition for efficiency It can be argued that the decision making management requires all the information that they can get in order to make better decisions but all departments do not need complete information of other departments. Similarly access to critical information from one central hub is a grave hazard as the potential of great loss exists for the company and well as employee, if private information is hacked. Effective implementation of Enterprise Resource Planning requires a proper password system, allowing relevant information being displayed to respective managers. There is a need of a balance which needs to be obtained between the customization of Enterprise Resource Planning and the structural changes required to implement the system so that the inherent structure of the company is maintained (Dehning & Stratopoulos, 2003). BIBOGRAPHY 1. Qureshi, S, 2007, 'Information Technology for Development', ITDJ - single issue Information Technology for Development Journal, vol 13, pp 106 2. Dehning,B. & T.Stratopoulos, 2003, 'Determinants of a Sustainable Competitive Advantage Due to an IT-enabled Strategy,' Journal of Strategic Information Systems, Vol. 12 3. Mennecke B. E, 2001, 'Geographic Information Systems in Developing Countries: Issues in Data Collection, Implementation and Management, Journal of Global Information Management, vol 9, no. 4, pp 44 4. The challenges of Human Resource, 2006, viewed april 13, 2009, < http://www.diversityworking.com/employerZone/diversityManagement/id=6 > 5. Turban, 2008, "Information Technology for Management, Transforming Organizations in the Digital Economy. Massachusetts", John Wiley & Sons, pp 320 6. The McKinsey 7S Framework, 2009, april 13, 2009, http://www.mindtools.com/pages/article/newSTR_91.htm 7. "Requirements Engineering for Cross-organizational ERP Implementation: Undocumented Assumptions and Potential Mismatches, 7 December, 2008, University of Twente, April 13 2009, Read More