Critically Evaluate the Role of Human Resource Management - Essay Example

A Take-home EXAM QUESTION Critically evaluate the role of HRM Today, IT industry is one of dynamic branches of Australian economy. The development of IT industry is a present day need. High rates of its development, great volumes of currency receipts have an active influence on various sectors of economy that promotes formation of IT industry. An essential part of the IT industry is HRM process aimed to give proper attention to the personnel function. The effectiveness of any IT organization is dependent upon the efficient use of resources, in particular human resources. The overall purpose of HRM in IT industry is to ensure that the organization is able to achieve success through people. In IT industry, the human element plays a major part in the overall success of the industry. "There must be effective management of human resources - there must be an effective personnel function" (Ulrich, Lake, 1990). HRM systems can be the source of organizational capabilities that allow firms to learn and capitalize on new opportunities especially in IT industry which operates in rapidly changing environment. While innovations in high technology often receive the greatest publicity, advances have been made in many fields and at many levels of Information Technology. Some theorists argue that HRM is used to exploit workers in order to achieve strategic goals. It is possible to agree and disagree with this view because much depends upon the conception employed by the researchers. Speaking about IT industry it is possible to say that HRM can be identified as an element or support concept of the industry. In many organizations, including IT sector, human resources is very much part of the productive process and will be a task function. For example, in the IT industry many members of the workforce are seen as being involved in achieving the objectives of the organization creating a new product or service. In this case, people are part of the finished product for which the customer is paying. Customer satisfaction is likely to be affected as much by the courtesy, helpfulness and personal qualities of the staff as by the standard of services provided. This places particular importance on the managerial function which manipulates workforce to achieve organizational tasks (Tyson, 1997). Training, as investment in people, is also a form of manipulation. Training requires the co-operation of managers, adequate finance and resources, time, skilled staff and a supporting appraisal system: from top management and throughout all levels of the organization. Most programs of IT development are designed in accordance with the culture and specific requirements of the particular segment of IT industry or department, and the demands of particular managerial jobs. There should be a clear development policy together with regular reviews of individual performance and a program of career progression. All the forms mentioned above explain manipulation of HR through HRM systems as the inevitable part of management. The overall purpose of HRM can be seen as manipulation as well as it aims to ensure that the organization is able to achieve success through people. "HRM systems can be the source of organizational capabilities that allow firms to learn and capitalize on new opportunities" (Campbell, 1997). On the other hand, it is possible to say that training of IT personnel for its own sake achieves little. Training must be real and rewarding. The rationale for strategic HRM within IT industry is also built on the idea of manipulation which means that people and organizations engage in basically consistent, value-maximizing calculations or adaptations within certain constraints and competitive advantage. The rational model works as follows: an employee has goals or objectives and has a payoff, utility, or preference function that permits that person to rank all possible alternative actions by the action's contribution to the desired goals. The IT organization is presented with and understands alternative courses of action. Each alternative has a set of consequences. The employer in IT industry chooses the alternative and consequences that rank highest in terms of the payoff functions; that is, that contribute most to the ultimate goal. A convincing rationale for resource-based strategy has been produced by Grant: "When the external environment is in a state of flux, the firm's own resources and capabilities may be a much more stable basis on which to define its identity. Hence, a definition of a business in terms of what it is capable of doing may offer a more durable basis for strategy than a definition based upon the needs which the business seeks to satisfy" (Grant, 1991). Nevertheless, HRM plays a major and continuing role in the lives of all people, especially with the growth of IT organisations and the divorce of ownership from management. HRM of one form or another are a necessary part of any company, including IT sphere, as it serves many important needs. HRM management in organizations has an increasing impact on individuals working with IT industry (Niederman, Braneheau, Wetherbe, 1991). The positive role of HRM within IT corporations is to pursue the policy of investing in people and demands that they demonstrate a continuous commitment to training standards. Employees, for their part, receive positive recognition for good training achievements. Cost is obviously a major consideration in any selection process, but the costs are not considered in isolation. They are weighed against the costs of selection failure, either by the appointment of an unsuitable member of staff or by the rejection of a candidate who would have made a 'successful' member of staff. The contributions from an efficient and effective selection process and the benefits derived by the IT organizations are not readily apparent and less easy to identify (Stroh, 1998). In IT industry HRM is connected with the concept of intrinsic value which is based on the belief that what jobs and jobholders are worth is related inherently to what they are and what they do, respectively. In this case, mistake in selection are expensive, not only in the possible effects on staff moral and performance. The role of IT management is to ensure that the organization obtains and retains the skilled, committed and well-motivated workforce it needs. This means taking steps to assess and satisfy future people needs and to enhance and develop the inherent capacities of people - their contributions, potential and employability - by providing learning and continuous development opportunities. It can also involve the development of high performance work systems which enhance flexibility and include "rigorous recruitment and selection procedures, performance-contingent incentive compensation systems, and management development and training activities linked to the needs of the business" (Laabs, 1993). In practice, the concept of HRM could be regarded as a philosophy governing how employees should be treated in the interests of the IT industry with its specific purposes and goals. But this philosophy can be applied in many different ways and there is no single model which can be used to describe HRM. At the organizational level the detailed involvement of the IT activities of several departments, available time, and the need for specialization suggest that the IT personnel manager has a prominent role to play. The personnel manager in IT corporation is the main executor of personnel policies but acting in consultation with, and taking advice from, senior managers. On this basis the personnel manager would be concerned mainly with broader aspects of personnel policy and procedures which affect the organisation as a whole or staff generally. This could include such activities as: manpower planning; job analysis and procedures for recruitment and selection; induction and training; problems of high labour turnover; consultations with trade unions or staff representatives; compliance with the law relating to employment (Santana, Robey, 1994). Taking into account the specific criteria as organizational effectiveness, specified goals, specified quantified measures, stakeholder perspective, it was found that HRM approach plays an important role in IT industry because it allows to reduce the level of mistakes to a minimum As the aim of IT industry is to improve resource capability - achieving strategic fit between resources and opportunities and obtaining added value from the effective deployment of resources, management helps to realize this objectives without profit loss. QUESTION 3 - Critically evaluate the role of performance appraisal in the IT industry. The rapid growth of technology and the dramatically falling cost of computing capability means that more and more aspects of managerial planning and decision making can be assisted by information technology provided, of course, that the information system is developed in accordance with properly defined objectives and principles. Performance appraisal in IT industry is therefore a crucial activity of the personnel function and the management of human resources. A comprehensive appraisal system can provide the basis for key managerial decisions such as those relating to, for example, allocation of duties and responsibilities, pay, delegation, levels of supervision, promotions, training and development needs, and terminations. One way in which to review the performance and potential of staff is through a system of performance appraisal. It is important that members of the IT organization know exactly what is expected of them, and the yardsticks by which their performance and results will be measured. A formalised and systematic appraisal scheme will enable a regular assessment of the individual's performance, highlight potential, and identify training and development needs. Most importantly, an effective appraisal scheme can improve the future performance of staff. The appraisal scheme can also form the basis of a review of financial rewards and planned career progression (Market control of knowledge workers, 2003). The process of appraisal used in IT industry also improves the quality of working life by increasing mutual understanding between managers and their staff. A performance system operated in an organisational context must, if it is to have any credibility, be based on clear ethical principles dominated in IT industry. These are particularly important to an involved culture where individual development, trust and openness are fundamental values. These principles would apply to both appraiser and appraisee: appraise on the basis of representative information; appraise on the basis of sufficient information; appraise on the basis of relevant information; make an honest appraisal; keep written and oral appraisals consistent; and present appraisal as opinion. The increasing adoption of flexible working practices and harmonisation of conditions of employment, together with attempts to overcome the attitude of 'them and us', has prompted the extension of appraisal to cover all members of staff working in a company. In IT industry the usual practice is for appraisal to be carried out by the immediate manager or supervisor - as the person who allocates work and has the closest knowledge of the individual's duties and performance (Argyris, 1994). There is, however, an argument in favour of appraisal at a higher level. This would extend the lines of communication and feedback. This may also help to demonstrate 'fair play' and to overcome problems of different managers/supervisors applying different standards of appraisal. Another approach used in IT industry is for the immediate manager/supervisor to conduct the appraisal and write the report. Senior management are then asked to comment, to monitor the system, review the consistency of reporting and to countersign as confirmation of approval. Appraisal can also be undertaken by a member of the personnel department, by peers, by subordinates, by assessment centres or by self-appraisal. With the majority of schemes taking place in IT industry, staff receives an annual appraisal. However, the frequency of appraisal should be related to the purpose and objectives of the scheme employed. For organizations within IT industry operating in a dynamic, changing environment more frequent appraisals may be called for, as well as for new members of staff, those recently promoted or appointed to a new position or for those whose past performance has not been up to the required standard. Some practical systems within IT industry shows that there is an argument which suggests that open reporting restricts managers from giving a completely honest and frank appraisal on the more critical comments. However, the more staff see of their appraisal report - that is the more 'open' the system - the more they are likely to accept the process of appraisal. IT industry staff are better able to check the consistency of the appraisal report with verbal feedback from the manager. With an open system of reporting staff should be given the opportunity to sign the completed form and to add any comments on their perception of the accuracy of the assessment. In order to establish a successful appraisal system in IT industry careful attention needs to be given to a number of important matters concerning its introduction and implementation. The purpose and nature of the appraisal system in IT industry should be made clear. A successful system should establish a regular dialogue and lead to an improvement in manager-staff relationships. Performance appraisal is a power-sharing exercise. To succeed it must be a co-operative, constructive endeavour with input by both staff and the manager. The system should focus on the strengths and accomplishments of staff, rather than their faults and failures, and it should lead to a plan for the future development and progress of the individual especially in IT industry environment (Schuler, 1998). It is important to note that within IT industry, top management should be seen to own the system and be fully committed to the concept of appraisal. Adequate provision will need to be made for the proper training of appraisers and there should be a reasonable time allowance for the activity. The appraisal system should not be viewed in isolation but in relation to the corporate objectives of the organisation in IT industry, and designed to suit its culture and particular requirements. The system should be integrated with related personnel policies and practices such as manpower planning, and training and development programs (Winch, Schneider, 1993). An effective appraisal scheme in IT industry offers a number of potential benefits to both the individual and the organisation. It can identify an individual's strengths and weaknesses and indicate how such strengths may best be utilised and weaknesses overcome. It can help to reveal problems which may be restricting progress and causing inefficient work practices. It can develop a greater degree of consistency through regular feedback on performance and discussion about potential. This encourages better performance from staff. It can provide information for manpower planning, to assist succession planning, to determine suitability for promotion and for particular types of employment and training. In IT industry the role of appraisal is especially important as it improves communications by giving staff the opportunity to talk about their ideas and expectations, and how well they are progressing (Heene, Sanchez, 1997). The costs of appraisal is low, but the benefits are high. As the main benefit of appraisals is that it helps staff to improve their performance. However, in order to help establish the credibility of the system and to maintain goodwill, it is necessary to establish a formal procedure which is clearly understood by all members of staff. Appeals should be made to a manager it a more senior position than the appraiser or sometimes to a representative committee. The appeals procedure should include provision for staff to it assisted, if requested, by staff representative. The practical systems show that appraisal used in IT industry, needs to be monitored regularly to ensure that appraisals are being carried out properly and to obtain feedback from managers. The system should be kept under continual review and, where necessary, modified to meet changing environmental influences or the needs of the organisation. It is important to ensure that operation of the system and the criteria used for assessment satisfy all legal requirements. The system must be supported by appropriate follow-up action. For example, to see that work plans or changes in duties and responsibilities actually take place, and suitable arrangements are made to meet identified training or development needs. QUESTION 4 - The structure of training in the Australian IT industry. One major area of personnel work of particular relevance to the effective use of human resources is training. Few people would argue against the importance of training as a major influence on the success of an organisation. Staff are a crucial, but expensive, resource. In order to sustain economic and effective performance it is important to optimise the contribution of employees to the aims and goals of the organisation. The structure of IT education in Australia consists of the following levels: a non-school qualification; school education to Year 12 level; a Bachelor degree or Master Degree; work-related training courses. The purpose of IT education at all levels is to improve knowledge and skills, and to change attitudes. This can lead to many potential benefits for both individuals and the organization they will be employed. At the organizational level in IT industry external short courses, and further professional study are used. It is effectively used on all the level of training. The main goal persuade by courses in IT is task training. It involves selected individuals being sent on short training or college-based courses. Health and safety regulations, IT familiarisation courses and the financing of vocational evening classes typify this type of training. From the introverted phase of output training, task training sees the first orientation to the joint needs of the individual and the IT industry - the beginnings of an external view (Beardwell, Holden, Claydon, 2004; Reed, 2001). Another form of training employed by Australian IT industry is performance training which arises when IT organizations has grown substantially and becomes well-established. Training is now viewed positively with a single person for the first time formally designated as responsible for training. Plans and budgets are now some of the tools used to manage the training process. Training programs become means by which the performance of individuals and the organization can be controlled. IT organizations choosing to adjust their quality can only do so effectively by embracing the training function. During this phase appraisal systems also become more established. These systems are used to evaluate not only the effectiveness of training received but also to anticipate future training requirements (Winch, Schneider, 1993). Industry training in the Australian IT industry does not involve strategic training. It can be said to be reached when the organization recognizes and practices training as an integral part of the management of human resources, prepares organizational strategies, and plans training in the light of both individual and organizational needs. Strategic training should be an integral to the philosophy and culture of the It industry (Hoeksema, 1997). The weakness of IT industry training is that too often, strategic training is seen as a low status, low priority and unplaced activity. The potential benefits of IT strategic training is seen as worthwhile. Fundamentally the lack of planning is central not only to training but also to It industry as a whole. To improve training outcomes I industry should adopt four main stages of training to be related to the context of the external environment in which It industry is operating. Different stages of training will be most appropriate at different times. It industry in Australia needs more qualified staff (namely Bachelors and Masters level of education), instead of work-related training courses employees. There are a wide range of forces acting upon IT industry and which make the need for change inevitable. Training for change is vital for the long-term survival of IT industry. Increasing emphasis is being placed on both the need for continuous training to support change and on training as a vital investment for the future. It is not seen as providing long-term benefits or improving IT industry performance. To improve training outcomes IT industry should encourage employees, and the motivation for further education should be provided by Human Resource department which helps employees to identify their career opportunities and goals. This training and learning should be aimed at providing a blend of technical competence, social and human skills, and conceptual ability (Santana, Robey, 1994). It is important to change the structure of training towards more qualified professionals within IT industry. It is important because training can: increase the confidence, motivation and commitment of staff; provide recognition, enhanced responsibility, and the possibility of increased pay and promotion; give a feeling of personal satisfaction and achievement, and broader opportunities for career progression; and help to improve the availability and quality of staff. Training is therefore a key element of improved organisational performance (Get Images puts e-HR in perspective, 2003). Training increases the level of individual and organisational competence. It helps to reconcile the gap between what should happen, and desired targets and standards of performance; and what is happening and actual levels of work performance In IT industry employees, for their part, should receive positive recognition for good training achievements. For example, through increased job satisfaction, higher wage rates and related systems of career progression. Successful structure of training clearly offers potential benefits to the industry and to employees. It can also be one of the most satisfying activities for the manager. But the extent to which the full rewards of training are realised depends on a planned and systematic approach. The changes in the structure of training is particularly important at a time of skill shortages and when the traditional source of young people entering the workforce will diminish noticeably in the next five years. In order to secure the full benefits of successful training there must, therefore, be a planned and systematic approach to the effective management of training. IT HRM should set the scene by giving active support and encouragement to the training process, and through the provision of adequate finance, resources, time and skilled staff. It is essential that IT industry training should adopt an objective assessment of training needs related to: a vision of where the organisation is going; the need to be responsive to changes in external environmental influences; a comprehensive system of manpower planning; and a process of job analysis leading to the preparation of job descriptions and person specifications. It is important that staff themselves should also feel a sense of involvement and know how they can play their part in achieving the goals and objectives of the organisation. They should be given 'ownership and partnership' in the training process. In IT industry full regard should be given to the training needs of those groups who are not currently active in the workforce, including married women, ethnic minorities, older members of staff, and the disabled. Special consideration should be given to the most appropriate methods of training for these groups of people. Also, consideration must be given to the choice of the most appropriate methods of training. These can include: assignments or projects; simulation; lectures, seminars, programmed instruction; group discussions or exercises; coaching, job instruction and job rotation; delegation and allocation of special duties; training packages; internal courses, external courses and distance learning. The methods must be selected carefully according to the particular needs of IT organizations and the employees. Guidance should be given on how to prepare for training and how to deal with the various material or situations presented. Nevertheless, the structure of training and its planning should account that people in IT industry cannot absorb properly a large amount of information at one time. The training program should therefore be planned carefully and staggered over a reasonable period of time. Consideration should be given to the priority, loading and pacing of information; timing and sequence, common or related items; variety of subject matter and methods of presentation; review and consolidation. It is possible to conclude that in the modem era of rapidly changing technology with increased emphasis on flexible working attitudes, job seekers are searching for employers who will offer then: continued opportunities to develop and update their skills and experiences. But, IT industry needs high-qualified staff to meet the current and future needs of the industry. For this reason, the structure of the Australian training in IT industry should be changed from work-related training courses dominated in the industry towards employees with Bachelors and Masters degrees. References 1. Argyris, C., May (1994) "The Future of Workplace Learning and Performance," Training and Development, pp. 36-46. 2. Beardwell, I. Holden, L., Claydon, T. (2004), Human Resource Management, London Pitman Publishing. 3. Campbell, D.J. (1997), Organizations and the Business Environment. Oxford: Butterworth-Heinemann. 4. "Getty Images puts e-HR in perspective", (2002) Human Resource Management International Digest, Vol. 10, Num. 1, pp. 13-16. 5. Grant, R.M. (1991), "The resourced based theory of competitive advantage". California Management Review, #33. pp. 114-35 6. Education and Training Experience, Australia (2002), Available at: http://www.abs.gov.au/Ausstats/abs@.nsf/lookupMF/252D868F10B905F3CA2568A9001393AF 7. Heene, A., Sanchez, R. (1997), Competence-Based Strategic Management. New York: John Wiley. 8. Hoeksema, L. (1997) "The interplay berween learning strategy and organisational structure in predicting career success", International Journal of Human Resource, Vol. 8, Num. 3, pp.307-327. 9. Johnson, G. (1992), Managing strategic change: strategy, culture and action. Long Range Planning, #25, pp. 28-36. 10. Laabs, J. (1993). "Why HR Is Turning To Outsourcing." Personnel Journal, (September), pp. 92-101. 11. National Employers Skills Survey (2003). Available at: http://www.lsc.gov.uk/NR/rdonlyres/ekts4w3fnotnxdfacwiaq6myaaadkxxdb4a3j7xbfnczytk6virmwdhumha3snqwp7spzyk4y5rnfd/NESS2004.pdf 12. Niederman, F.; Braneheau, J. C.; and Wetherbe, J. C. (1991), Information systems management issues for the 1990s. MiS Quarterly, #15, pp. 475-500. 13. Santana, M., Robey, D. (1994) Controlling systems development:effects on job satisfaction of systems professionals. 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(1990), Organizational Capability: Competing from the inside out, John Wiley, New York. Read More