The Challenges of the Human Resource Executive - Research Paper Example

? Human Resource Table of Contents Introduction 3 Present status of Human Resource Management in organizations. 4 International and Domestic HRM and how they impact the executives’ strategic thinking 7 Specific recommendations on what needs to change to improve the quality of work life; given reasonable cost constraints. 10 Conclusion 12 Reference 12 Introduction It is a demanding time for HR in Indian organizations. While population has crossed one billion, organizations in formal sector face grave challenges in terms of people management. The high economic growth and the consequent demand for employable people to achieve growth have made HR personnel sit up and think. As Indian organizations realize the need for professional HRM, there is a high demand for HR professionals as well. Reports indicate that during 2008 the attrition of HR professional in the growing IT sector is the highest at 20%, while turnover rate for core IT professionals known for high attrition is 18%. Additionally, in many organizations, line professional adopt the role of the HR and that too with great success. The CEOs are concerned about the issues related to people placed by the top leadership in HRM organizations. However, the Accenture report identifies most CEOs, which doubt on the ability of a large section of HR functionaries to be strategic business partners. The reasons behind the failure of organizational leadership is to encourage HR to move to the front lines from their traditional roles as a back-room support and crisis-handler, and the inability of HR function to align with business. With the development of the knowledge industry and recruiting high demand for people, the HR functions started to take a strategic focus. The applicability of HR functions is not only confined to business establishments but also to non-business organizations. Supporters of HRM claimed that the HR manager is a change agent and a transformational leader, and his or her functions are panacea for all organizational ills and social events. Therefore, the term human resource implies to the availability of man power for supply, which can be drawn and used to accomplish a task. Resources appear as a cost in traditional accounting services (Grahamm, 2005, p.5). Present status of Human Resource Management in organizations. HR executive is usually the vice president of an organization. They carry the responsibility of linking the firm’s corporate policy and strategy with HRM. In a weak economy, it is difficult for the hr executives today to reward the employees for their performance. The present condition of the nation’s employment rate remains at 9.1% (Rushe & MacAskill, 2011). Therefore, to improve the nation’s economy HR executives are providing new opportunities to the top technical talent. According to the HR professionals, managing the company’s brand image became challenging role for them to exist in the competitive market. Therefore, the use of internet facilitates the HR executives today to attract and recruit the new talents for their organizations. It also enables the companies to search for talent cutting across time and distance constraints. Using social networking sites like Facebook, Linkedln help the HR executives to connect with the new talents. We can take the example of the LinkedIn, created a small team in their organization, which will focus on only providing opportunities to the prospective employees to work in companies like Mountain View and Calf. In August, Linkedln invited students from different colleges nearby to take active participation in computer programming event organized in their headquarters. The main motive behind this participation in computer programming event was only to give them an exposure in their organization culture and to promote their company to attract the new talents. Now day’s companies are trying to create their presence in social media in order to connect with the new talents. Taking another example of one of the world’s leading professional service organization Ernst & Young created a Facebook page where their employees can share their experiences and opinion about their internship and work culture. In this way, the company is trying to increase their brand value among the people through social media presence. During the recession, it is a tough time for the HR executives to retain the best employees in their organization. In the present scenario, companies are the top talents through employee referrals rather than hiring through external sources. Therefore, this procedure is a time saving and helps the companies to recruit the top talents needed in their organization (Glazer, 2011). Today’s HR activities are different and more sophisticated than it was in the mid 1990s. HR professionals are doing different things and doing many things better in today’s scenario. They are improving the information systems to cope up with the new technology, creating benchmarks and developing competency models. However, in many organizations, the HR services are poor; it became a difficulty for the HR executives to manage the change in technologies. The use of the technology allows the HR to adopt the role of a strategic partner and adding value playing the role of a strategic partner. HR functions play an important part in building the organization but due to rapidly changing business environment HR can help the organization in formulating and implementing the strategies. A strategy is course of action, which shows how an enterprise will move from the business it is in now and to the business, it wants to be in future. Today’s human resource managers face three basic challenges. One is the need to support corporate productivity and performance improvement efforts. Secondly, employees play an expanded role in employer’s performance improvement efforts. Last but not the least employers see that their human resource units must be more involved in designing the company’s strategic plan (Storey, 2008, p.19). In today’s scenario HR, mangers have started speaking the language of business. They seek to justify the economic value of their action. Cost-benefit analysis applied to all the areas of HR activities, which will help the organization in improving their productivity and quality. Taking the example of the different sectors in sports industry the HR managers are facing the challenges to meet the rising expectation of the customers and providing them services in order to exist in the competitive market. In the IT sector HR, managers are facing the challenges to retain and motivate the employees in the organization. The reason behind the retaining and motivating the employees in IT sector is salary and work satisfaction. Hence, we can find that the software industries are facing shortage of experience people in various departments and attracting the key talents will be the challenging role faced by the HR (Storey, 2008, p.19). The challenges faced by the HR in the era of Globalization In the era of globalization today’s HR play an important role to manage the changing environment and all the business functions. Globalization brings both benefits and threats to the organization. In the next decades, the HR will be facing the issues relating to change, so it is necessary that the HR professionals adopt the role of a change agent or a HR consultant in order to deal with the changes and develop specific competencies. In future, the workplace flexibility expected to rise and work will be redesign in order to put emphasis on the collaborative work culture. Excellent HR practices have found their application in Indian business. With the rapid increase in globalization, the HR managers need to manage the diverse workforce in order to attract and retain the investors and shareholders. Therefore, HR professionals need to provide culture sensitivity training to the employees in order to manger the culture of the organization. To understand the culture of the organization the HR managers should be aware of the culture norms. In today’s 21st century we can find the workforce culture and the environment has changed due to innovation, globalization and competition in the market. In 2013, the HR executives will have to deal with greater change, which will affect all the facets of the organization. As we know that, the future role of the HR will be changing from administrative role to strategic role, so HR managers need to show their efficiency and effectiveness in the organization. To compete in the international market the HR professionals need to understand the culture diversity and national economy. They need to understand the policies and HR practices followed in international business. However to deal with challenges HR professionals need to start acquiring the new skills and competencies (Bashford & Rouse, 2011, p.5-9). International and Domestic HRM and how they impact the executives’ strategic thinking The HR executive needs to give international orientation in hiring the expatriates, training and development of the expatriates, assessing the performance and motivating. The task of HR manger becomes more challenging when expatriates need to be attracted, compensated and motivated differently. The success of domestic and international business both depend on its human resources. In international firm multiculturalism, means people belonging to different cultures. Global firms are the repositories of multiculturalism. In IHRM, the firms need to maintain a united culture that combines all the subsidiaries together. Multiculturalism motivates greater creativity and innovation. It also creates awareness about the need to maintain sensitivity in dealing with foreign customers. The international HR manager needs cross cultural competence in order to manage the multiculturalism. The IHRM the HR manager needs to have knowledge of beliefs and values of different cultures. He should cultivate cosmopolitan outlook and attitudes inside himself and display the sensitivity to the affective process of culture. In IHRM, without using the human power the resources cannot be fully utilized (Rovai, 2004, p.4-6). The scope of IHRM is much broader than managing domestic HR activities. IHRM focuses on HR activities practiced in the organization, types of employees from different places and countries of operation. Factors like more HR activities, need for broader perspective and more involvement in employee’s personal lives, differentiate IHRM from domestic HRM. Risk exposure is high in domestic IHRM since the risk is often associated with the poor selection decisions. In domestic HRM, the involvement of HR department in personal lives of the people is limited. HR plays a significant role in implementation and control of strategies in an international business. By strategies, we mean future oriented plan, which are designed to interact with the competitive environment, which helps the organization to achieve its goals. The implementation of strategies is more crucial than designing them. So strategies implemented not possible without structural innovation but it can also be implemented with radical organizational cultures. In organization, proactive HR policies are built by cultures. The international business in IHRM adopts three different approaches for staffing followed by ethnocentric, polycentric and geocentric. One of the most challenging tasks of IHRM is managing the performance of a firms various international facilities. In IHRM recruitment, selection, and training and development tend to focus on pre- assignment issues whereas performance management looks at post- assignment performance related issues (Lehman, 1999, p.2). As expatriates plays a major role in international business, MNCs take great care in their selection process. In order to prevent expatriate failure MNCs design HR strategies. MNCs use management development as strategic tool in firms pursuing a multinational strategy. In addition, MNCs need to be able to detect pressure to conduct business in a locally responsive manner. The implementation of international strategies is often constrained by the absence of competent managerial personnel to man overseas assignments, which results in decreased interest in setting up subsidiaries. In terms of human and financial terms, underperformance in overseas assignments is costly and the indirect costs of poor performance in international assignments such as damage to foreign customer relations may be costly. Performance Management becomes an integral part of corporate strategy. Besides contributing to enhance performance, it identifies the potential employees and linking the rewards with the established performance. Therefore, these entire offers add value to the inputs for formulation and execution of strategies ((Lehman, 1999, p.2). In domestic firms, the role of a HR executive will be to formulate his own strategy aligning with the corporate unit and functional strategies. For example, Motorola, which is an American based MNC, came up with a powerful strategy in HR leadership. The company’s goal was to link HR practices with customer and shareholders requirements. In recent years we have seen that human resource managements traditional role in executing strategy has expanded to include working with top management to formulate the company’s strategic plans. SWOT analysis is the next step in strategy formulation. The SWOT analysis will help the firm to scan its internal environment by listing out its strength and weaknesses and external environment identify the opportunities and threats. The strategy formulated need to be implemented in the organization carefully. Implementation of strategies requires coordination among the group and leadership skills. Strategy implementation poses a threat to many managers and employees in the organization. In domestic firms, HRM makes strategic management highly effective by supplying human resources who are competent and committed. The multi domestic industries like Sony, Panasonic adopts global strategy to compete in the global market. They are searching for the markets where they can take the advantage of the customer needs and desires. A global strategy will be effective when the completion is global and enjoys the advantages of low costs and faster product development. Domestic firms design the strategies to achieve maximum local responses by adding value to the product and customizing the features of the product according to the customer has needs and wants. To create a successful global strategy HR mangers need to have knowledge of the international market and global competitors. In Dell, the competitive strategy has always been to be a low cost leader. Dells human resource managers use various HR strategies to support Dells low cost aims. For example, Dell delivers most of its human resources services, not through a conventional Human Resource Department, but via the Web (Dell, n.d.). In case of Multi domestic strategy firms like Philips, focuses on innovation and high quality products delivered to individual countries. Matsushita is a company, which follows the global strategy; it focuses on having a financial control and ability to get the market quickly (Dell, n.d.). Specific recommendations on what needs to change to improve the quality of work life; given reasonable cost constraints. Based on the above analysis on MNCs and domestic firms HR strategy, there are some loopholes which are creating barriers in strategic Human Resource Management. In some organizations, the HR executives face the inability to think strategically. Taking a strategic approach to HR may lead to taking drastic changes in the firm’s architecture. Not many executives are prepared to accept such drastic changes. Many firms face difficulty in quantifying many HR outcomes since it is believed that many of the outcomes of HR function are abstract. During designing the strategy, most of the HR managers fail to understand the role of general managers. In highly competitive environment, key executives are poached from rivals; there is a tendency to invest less in employees than in technology and information, which are more proprietary. Therefore, the organizations fail to understand that people are the main assets of the organization and it is they who invent new technology and bring a competitive advantage to the company. Therefore, to improve the quality of work life, the strategies are designed keeping in mind the welfare of the workers along with the aim to create a safe and healthy environment. Managing human resource often requires making decisions in which fairness plays a role. When an HR executive is developing a strategy he needs to keep in mind that managing people and shaping their behaviour depends on shaping the values they use as behavioural guides. The success behind the South West Airlines strategy is its high compensation, flexible job assignments, cross training and employee stock ownership. South West achieves its strategic aims of delivering low-cost, convenient service (Comperchio, 2011). In order to strengthen company’s long-term competitive position in the market place, cost leadership strategy will be effective to help the enterprise to become a low cost leader in the industry. By differentiation strategy, the firm focuses to be unique among the competitors along with the dimensions that are widely valued by buyers. Jet Airways, India’s largest full service private airlines achieved the market leader position through its highly trained and motivated employees and better service to customers. Therefore, to bring down the cost, constraints on team based rewards, three weeks per year training and a full week of employee screening and testing can be done. As we noted above the challenges faced by the HR in the era of globalization, we can find that increase in competition leads to low costs and makes employees more productive. For example, HR managers of Ritz- Carlton and Signicast are involved in collaborating with their top managers in both designing and executing their company’s strategies. The Signicast’s new strategy today requires employees with knowledge, skills, and motivation to run the new automated plan, Signicast management knew that without the necessary employee knowledge, training and skills, the new plant will not be able to function. Its strategic HR plans enable the company to hire employees who could exhibit behaviours the company needed to accomplish its goals. In this way, the strategic HR plans will enable the company to build up a safe and healthy working environment and bring improvements in the quality of work among the employees. Conclusion Changes are taking place today that are requiring HR managers to play an increasingly central role in managing companies. In high performance companies, HR professionals are a part of strategic planning team. They help the team to identify the human issues that are vital to business strategy. The HR manager uses the scorecard measuring the new policies and practices that are required for employee competencies and skills. For example, the strategy of DETI ensures that their employees have the acquired skills and knowledge to manage the workload and increasing pressure. The HR strategy plans ensure new policies are introduced in the organization and managing the vacancies in order to provide opportunities to the new talents in their organization. It also ensures safe and healthy working environment, which will reduce absenteeism in work. To ensure successful HR strategy, a structured procedures need to be followed in manage the employees and transfers due to increase use of technology. Reference Bashford, C. S., & Rouse, J. (2009). Workforce Strategy. [Pdf]. Available at: http://www.croydon.gov.uk/contents/departments/democracy/pdf/wf-strategy11-13.pdf. [Accessed on April 26, 2012]. Doesn’t look like an authentic source, replace this with another source. Comperchio, M. (2011). Organizational Behaviour. [Pdf]. Available at: http://hbsp.harvard.edu/he-main/resources/documents/web-files/OB-Kreitner-Kinicki.pdf. [Accessed on April 26, 2012] Glazer, E. (2011). The Wall Street Journal. [Online]. Available at : http://online.wsj.com/article/SB10001424052970204479504576636841227735016.html.[Accessed on April 26, 2012]. Lehman, K. (1999). Approaches to International HRM. [Pdf]. Available at : http://www.utas.edu.au/mgmt/wps/wps_files/99_01pap.pdf. [Accessed on April 26, 2012]. Rovai, S. (2004). HRM practices in foreign MNCs(multinationals)operating in the PRC. [Pdf]. Available at : http://www.iese.edu/en/files_html/p23.pdf. [ Accessed on April 26, 2012]. Storey. J. (2008). The Routledge Companion to Strategic Human Resource Management. Taylor & Francis. Read More