High-commitment HRM is more rhetoric than reality - Essay Example

? High-commitment HRM is more ‘rhetoric than reality’ Introduction: The concept of Human resource management has been popular since the beginning of the 1890 and the US organizations marked the centenary in the year 1990. Since the inception Human resource management has been a vital part of the organization and has undergone a variety of changes. Different view has been expressed by the Human Resource practitioners from different industries. Human resource management also has encountered major changes over the last decade. The various theories underlying the practice of human resource policies have received several obstacles and the overall dependence of the performance of the employees on the human resource policies have been in question. A number of obstacles have also been identified on the future issues of the theories and the management process in practice (Pieper, 1990, p.41). The paper focuses on the limitations of the human resource management in practice and identifies the factors relevant to it. A critical study has been conducted to determine why the practice of high commitment human resource management (HRM) has faced difficulty in the reality. The theory behind the high commitment HRM have also been studied along with the major human resource policies in practice and helps to draw the conclusion that it has proved not to be effective in the resent scenario. High commitment HRM has become much more rhetoric than in reality. High Commitment HRM: The term high commitment HRM can be defined as a set of HR policies and practices which are aimed to bring performance improvement in all the organization. There are various components of high quality HRM policies which are described below. (Marchington, Wilson, 2005, p.72)Employee is the most primary element of the human resource management. One of the major component which deals with the high commitment HRM is regarding their security and the internal condition of the labor market. Employment security has been regarded as a high matter of concern because organizations cannot demand the best of the employee’s performance and dedication without providing them security and having concern for their career. Providing of employment security enhances the employment relationship. The most significant factor about the inclusion of employments security in the human resource policies is that it aims at eliminating job reductions and the employee’s expectation from the organization reaches a substantial level. Such policies also bring in to fact that the human resource management aims to highlight that they do not treat the workers of the organizations as variable cost but rather treat them as an asset who had their major contribution towards the organizational development. High commitment HRM also specifies that the employees hired in the organization through the selective recruitment process needs to be undergone through extensive training sessions to have a clear knowledge regarding their roles and the working of the organization. Much importance has been stressed on the importance of the individual and organizational learning. Skill specific forms of training are being suggested in the principle of high commitment human resource management. Providing employees with the necessary training also contributes to their overall development. Employee involvement and sharing of information among them also appears to be one of the vital components of the high commitment HRM. Sharing of information relating to organizational performance and financial matters will provide the employees with the updated information and would also be helpful in conveying the message that the employees are trusted and treated in an open environment with a positive manner. Employee participation can also be helpful for the management in providing them with legitimacy for their actions. Employee information and participation involves downward communication, problem solving groups which are designed to increase the rate of the employee participation. The importance of employee voice cannot be ignored in the organization and high commitment HRM highlights the fact that the workers should be provided with the opportunity to express their problems and discus with the management. Suggested method of representation of the employee voice includes the trade unions and the employee grievance for expressing their views.(High Commitment HRM and Performance, n. d) High commitment HRM and performance: The importance of high commitment HRM is guided by the assumption that the implementation of the policies will result in enhanced organizational performance. Such practises are believed to have unique and sustainable advantages regardless of the circumstances. The theory of strategic fit describes that the HRM practise should be aligned according to the strategies followed by the organization. The link between the strategy and the designing of the HRM practises requires vertical fit. (Wall & Wood, 2005, p.431) Few researchers conclude that there exists a linear relationship between HRM and performance. The HRM practises of selection, rewards contribute significantly to the performance of the individual and the organization in general. Human resource goals and policies also help in generating the outcomes of the organization like high job performance and lower rate of attrition. The policies for organizational job design leads to higher job performance among the employees. The rewards and recognition systems adds to the quality of the work on the workplace. Various studies have been carried out to find the link that exists between HR policies and the performance of the organization. Some results have reflected that firms having higher productivity and quality adhere to high commitment strategy. High performance system has impact if they are included in the management infrastructure. Some researchers revealed that the employee motivation affects the production level significantly and the financial performance of the organization is influenced to a considerable level by the employee skills. However the direct influence of HRM on the performance cannot be linked definitely as there is no evaluation scale to measure the impact of HRM policies on the productivity of the employees and the overall organization. (Armstrong, 2006, p.24) Various organizations around the world have personnel management and the human resource management which are contradictory in nature. In the matters of beliefs and assumption, HRM has the importance of devising clear rules and regulations. HR policies address various competing needs in a single approach and it becomes problematic for handling the variety of issues at a time. Critics also stresses on the point that the HRM policies acts as a powerful devise in masking the reality of a market driven and organization focussed activity (Loosemore, et al, 2003, p.35). Various challenges which are offered in the proper functioning of HRM are globalization, attaining profitability through the growth process, making technology viable and opportunity to create intellectual capital who has the efficiency to run a global organization and devising strategies for constantly adjusting to the overall changes without changing the focus of the overall business. In today’s competitive environment the business houses have adopted hard core HR policies for the satisfaction of the employees and gaining the overall profitability. All most all organization has a dedicated human resource team who frame policies on a regular basis and looks in to the view point of the employees. But the adoption of certain policies in the organization also does not prove to be beneficial in some cases. A study by the business research lab indicates that organization with employee strengths of 500 or more tends to exhibit lower level of dissatisfaction among the employees in comparison to the organizations which has an employee strength lesser than 100. In spite of the policies adopted like employee involvement and information sharing the employees within the organization has a lesser amount of trust in the employees and feels that they are of no values. Another important significance of the research was that employees in large companies has lesser amount of confidence among them in matters of job security and has lesser amount of satisfaction regarding their on- job training they receive.(The Business Research Lab, n. d) Considering the high commitment HR policies of providing security to the employees in order to provide them with more confidence regarding the organization, it is significant to study the level of attrition faced by the companies. The importance of the Business Process Outsourcing (BPO) industry is significant considering the level of impact it has over the economy. The rise in the growth of the overall BPO industry has been achieved over more than 50 percent in the recent times. However the growth rate could have achieved in a more increased rate provided the attrition rate would have been lower. The attrition rate increased significantly over the years and has reached almost between 40 and 75 percent. Major IT companies dealing in the BPO sector have their own HR departments with effective policies in place but the effectiveness required in the functioning of the organizations could not reach up to the desired level owing to employee dissatisfaction and higher attrition rate. For instance, TCS with its Asia Pacific presence has claimed to have their HRM policies in place and adapting to the surrounding conditions. In fact they provide Human Resources Outsourcing service and one of its services is to ensure retention (TCS, 2011). Yet, its own attrition exists to be a common problem despite wage hikes. For instance, in 2010, the company experienced a 13 percent attrition rate inspite of providing a wage hike of 10-13 percent in one quarter (Khanzode, 2010). In 2008, during the financial meltdown, Infosys BPO had an attrition of 28 percent and Wipro BPO had the rate summing up to 18 percent. Tesco HSC had an attrition of about 50-55 percent in 2007. All these companies are big players and have separate HRM departments and training programs (Attrition in Indian BPO industry, 2008). The higher attrition rate of the organization also resulted in the increased cost for the organizations in training and recruiting new staffs. (Goel& Thakur, 2007, p.3) Similar results have been noted in the Indian pharmaceutical industry. The attrition rate in the industry accounts for 30 to 35 percent. The industry comprises of global players like Pfizer, Merck and Novartis which are all structured organization and has reputed HR departments. Studies show that the employees cited various reasons for leaving their organization, among which better payment related opportunity and better growth formed the majority of the reasons. The reasons bring the efficiency of the HR policies adopted by the multinational companies in question. The management involved with the pharmaceutical industry has been constantly framing policies for the organization to reduce the level of the attrition but much significant effort has not been realized. (Dhotre, 2010, p.89) Considering the result of such performance which affects the productivity of the organization, managements in certain organizations have prevented from the implementation of many HR policies. One of the major barriers to the high commitment HRM practise is the managements resistance to implementing a high cost package of practises which is very time consuming and to deliver the results and transfer the effective to the employees. Most of the organization has a devolved decision making policies and a flattened hierarchies. This method is prevalent in organization which has unskilled and less educated manger. The mangers focus on achieving the competitiveness by implementing longer working hours and high monitoring over the workers. Whereas the organizations with high qualified managers have taken the competitive advantage by improving the quality of their products and the services. High commitment HRM policies are costly to implement but often mangers and the overall organizations fail to identify the cost associated with the implementation. Researchers have commented that those high commitment HRM policies have their implications mostly in the low to moderate levels and decreases significantly in the higher levels. Often government and the framework of the organizations may act as hindrance towards the implementation of the HRM policies. Managers aim to achieve short term returns rather than focusing on the long term gains. Introduction of the high commitment HRM policies must invest in a series of reforms which involves high cost allocation and has a delayed effect. Government policies also determine the level of effectiveness and the implementation of the high commitment HRM policies and often pose restriction. Often employees also restrict the implementation of the high commitment HRM when they do not trust the management. The employee’s willingness to learn about new skills during their training program and offering their ideas and suggestion regarding the overall productivity of the organization requires the trust and the co operation which may prove to be difficult in maintaining. (Gill, 2009, pp.39-50) In the competitive working environment often the business policies are conflicting to the philosophies to the high commitment HRM. Most of the firms look for expansion of their business and in the present economic downturn they often have to cut down the employee size for running steady in the market. In the era of outsourcing and various off shore opportunities opening for the business house, the management cannot guarantee a secure career for the employees which are one of the prerequisite for the high commitment HRM. The high commitment HRM dedicates mast of the policies towards the employee betterment and is framed for the overall improvement of the employees working condition. In the present market there is extensive market pressure due to the tremendous rise in competition. The implementation of the high commitment HRM differs considerably among the specific groups and the result also differs considerably. Thus the universal application of the HR policies fails in this respect (Guest, 2011, p.8).As a result much of the focus has been shifted from the employee to the market conditions and the HR frame policies depending n the market needs. The rhetoric HRM policies signify flexibility in the working environment of the employees whereas in reality the management stresses on constant reengineering of the methods and policies and opts for scientific management measures in handling the employees. The high commitment HRM policies focuses on the right sizing of the employee strengths for the optimum production of the organization whereas the organizations in practise in downsizing and employee redundancy. Another crucial deviation which has been observed in the practise of the high commitment HRM is the employability based on the part-time provisions. The organizations find it more profitable in the art time allocation of the employees rather than permanently absorbing them in the organization. But such policies are not been framed in the high commitment HRM. Individual contributions from the employees are to be recognised and rewarded according to the rhetoric of the high commitment HRM policies through the help of the trade unions, but in most organizations the trade union bargaining power are undermined and the employees cannot claim for their worth. According to high commitment HRM it stresses on the training and the development on the particular skills so that the employees can deliver their best in their own specialized area, but the management of the organizations stresses on the multitasking ability of the employees so that a higher amount of the task can be conducted by employing a lesser number of employees. In the present market condition, the management wants to attain competitive benefit over each other and in this environment they often prevent the information flow of crucial events among the employees, but according to the high commitment HRM the promotion of the information flow among the employees to provide an open environment for working and to create a feeling among the employees that they also belong to the organization and they should be kept informed with the regular updates. The team working approach of the high commitment HRM has also taken a suffering as people are focussed much more on the individual benefits rather than delivering the best for the organization. (Loosemore, et al, 2003, p.36) Conclusion: The study conducted above deals with finding the effectiveness of the high commitment HRM in enhancing the overall performance of the organizations and the difference of the policies as specified in the high commitment HR with that followed by the management in practise. It can be concluded from the above study that all the theories of the high commitment HRM are difficult to implement in the current scenario by the HR managers and the rhetoric are different from the reality to large extent. The change in the overall business environment and the rise in competition however drift the practise significantly to a large extent. In the present environment the business houses desire to attain profitability in their respective business at the sake of the employee benefits and without taking much concern in them. But there exists a link in the overall HRM policies of the organizations with the organizational productivity and the HR’s significantly keep some respect of the high commitment HRM under their control. Most of the mangers have modified the human resource policies based on the organizational situations and the objectives in mind and feels difficulty in adhering to the rhetoric business policies as specified in the high commitment HRM. It is suggested that the practise of the high commitment HRM policies will surely bring profitability to the business in the long run and companies should try their best in framing policies as specified according to the rhetoric of the HRM policies. The study regarding the limitation of the HRM policies suggest that due to the change in market condition and due to the difference in organizational goals and achievement of the organization most of the of the companies significantly deviate from the use of the high commitment HRM . In the present generation the organizations aim towards profit maximization and often fail to adopt the policies of the high commitment HRM. Thus the notion that high commitment HRM is rhetoric than reality is supported. 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(2010) TCS to overhaul HR policy, The Financial Express, available at: http://www.financialexpress.com/news/tcs-to-overhaul-hr-policy/647643/3 (accessed on November 21, 2011) Loosemore, M et al, (2003), Human Resource Management in Construction Projects: Strategic and Operational Approaches, London: Routledge(WHERE ARE THE PAGES) High Commitment HRM and Performance, (n.d), cipd, available at: http://www.cipd.co.uk/NR/rdonlyres/7FE8ADEB-EA96-4836-83DD-2E95FD309B15/0/samplech3.pdf (accessed on November 15, 2011) TCS (2011), Human Resources Outsourcing, available at: http://www.tcs.com/offerings/business_process_outsourcing_BPO/human-resources_hr/Pages/default.aspx (accessed on November 20, 2011) Wall, T, D & Wood, S, J, (2005), the romance of human resource management and business performance, and the case for big science, Human Relations, Vol 58, No, 4, p. 431 Marchington,M& Wilkinson, A (2005), Human resource management at work: people management and development, CIPD Publishing The Business Research Lab (n. d), busreslab, available at: http://www.busreslab.com/quickpolls/poll6.htm(accessed on November 19, 2011) Goel, D & Thakur, P, (2007), India: An Attractive BPO Destination Marred By Alarming Attrition, tpi, available at: http://www.tpi.net/pdf/papers/TPI_whitepaper_India.pdf(accessed on November 19, 2011) Dhotre, A, (2010), ATTRITION IN PHARMACEUTICALINDUSTRY: HUMAN RESOURCE MANAGEMENT’S ROLE AND STRATEGY, International Research Journal, Vol.1, No, 11, pp.87-89, available at, http://www.ssmrae.com/admin/images/0ea3861cf0d096caf0b1048517f1b428.pdf Read More