There are Signs that the Current Economic Situation Is Improving - Essay Example

?There Are Signs That the Current Economic Situation Is Improving Table of Contents Table of Contents 2 Introduction 3 Review of Literature 4 Improving Economic Situations 4 Implication of Improving Economic Conditions on Human Resource (HR) Policies 5 Analysis and Discussion 8 Conclusion and Recommendations 12 References 14 Introduction Human Resource Management (HRM) plays an effective role in managing the people or employees of an organisation. HRM comprises different activities, practices along with policies on the basis of which, operations of the employees are managed, evaluated, developed and maintained. The prime objective of HRM is to maximise the productivity and the contribution of the employees towards the attainment of the desired organisational goals. HRM is also entrusted with the tasks of ensuring that a suitable working environment is developed in organisations. Moreover, it also ensures that a harmonious and a better relationship is developed amid employees and management of organisations. The role of HRM can be viewed to get affected due to influences with respect to internal along with external environment. In this regard, the internal factors include organisational culture and climate. Organisational culture is based on various factors including values, beliefs along with ethnicity of employees. Organisational climate depends on leadership styles, communication and human resource (HR) policies. On the other hand, external factors comprise economic conditions, demographics and labour market conditions. Economic conditions entail availability of financial resources or materials and demand along with supply of products and/or services. Labour market implies the availability of labour forces to be recruited. Demographics state the features of the workforces to be recruited which include education level, marital status and age. In this context, the economic conditions are determined as the major element affecting the aspect of HRM in maintaining the performance of business organisations. This can be owing to the reason that the economic conditions pose several threats to certain significant factors that include employment rate and productivity (Pearson Canada Inc., 2013). It can be apparently observed that the global economy has been under economic recession from the period 2009, affecting business operations on a global context. However, the commencement of the year 2011 has been identified to reveal signs of improvement in the global economic conditions with increased demand and sales of products and/or services. Additionally, the rate of employment has declined by a certain extent. Moreover, there are certain other factors depicting the reviving conditions of the global economic conditions that include profit margin, increased factory productions and better job opportunities (Pearson Canada Inc., 2013). In this respect, the essay intends to discuss about the impact of improving economic conditions imposed on the policies along with other strategic aspects of HRM within organisations. Review of Literature Improving Economic Situations According to Monica (2012), the economic conditions have been observed to improve by a certain extent in a slow and a steady manner after the recession period. It can be viewed in this similar concern that the spending of consumers in the worldwide market segments have increased by a substantial amount due to greater flow of money in the economy. Additionally, operations of business organisations have increased on a global context with better trading activities and sales of products and/or services. Monica (2012) noted that flow of investments has augmented with the rise of the trends of globalisation. Moreover, the rate of inflation is also seemed to reduce in most of the countries, improving the purchasing power of customers at large (Monica, 2012). In this similar context, Jochnick (2013) stated that balanced economic policies have assisted countries in improving their respective economic conditions in a steady manner after the global recession. The business operations of private along with public sectors have improved immensely due to decreased debt. Furthermore, the interest rates amid countries have decreased, which facilitated in improving credit functions. Moreover, Jochnick (2013) noted that the market conditions in relation to financial market, stock market, foreign exchange market and product market have improved steadily. In this respect, the worldwide countries are able to witness better growth rate in the ‘Gross Domestic Product’ (GDP), signalling that the economic conditions are improving (Jochnick, 2013). The article which published by United Nations (2013) signified that the world economy has been improving in a slow pace. Moreover, in most of the developed economies, different policies have been implemented with the objective of minimising systematic risks. These policies have also facilitated in stabilising confidence among businesses, investors along with consumers. The lending policies of banking sectors have increased by a certain extent. Additionally, the report of United Nations (2013) revealed that the rate of unemployment has decreased by a minimum extent. Besides, the participation rate of employees has improved in most of the economies in a slow manner (United Nations, 2013). Thus, the aforementioned factors are the major indicators depicting the improved economic conditions of the global economy. Implication of Improving Economic Conditions on Human Resource (HR) Policies In the present business environment, the economic conditions have improved by a certain extent due to the implementation of different economic along with monetary policies as observed in the above discussion. In this regard, the HRM of organisations are entrusted with the task of developing effective policies in consideration to both employees and employers (Stefanescu & Darabaneanu, 2011). According to Stefanescu & Darabaneanu (2011), the HR managers are required to develop effective HR policies in these improving economic conditions and competitive business environment with the intention of enhancing the operational performances of organisations. It can be affirmed that HR policies should be efficient in developing a better working environment through devising along with executing effective conflict management strategies and forming better communication system. As stated by Stefanescu & Darabaneanu (2011), HR policies should be devised in such a manner, so that the expectations of the employees along with the employers are fulfilled. Moreover, suitable organisational environment will assist in managing and coordinating the activities of employees in an efficient manner. Subsequently, effective working environment policies will facilitate in maintaining the competitive position in the worldwide market segments for the next 1-2 years in this improving global economic conditions (Stefanescu & Darabaneanu, 2011). Gusdorf (2008) has stated that in this improving economic conditions, HR policies should comprise better recruitment plans with the intention of attracting more skilled workforces in the present competitive and adverse economic along with business environment. In this regard, the recruitment policies should be developed with lucrative benefits and compensation plans. Contextually, the employees will be able to be facilitated with the opportunities of having better promotions, monetary and other benefits. According to Gusdorf (2008), HR policies facilitating employees with various lucrative benefit plans will be able to retain skilled employees and recruit competent employees, so that organisations are able to meet their desired business objectives and maintain superior competitive position (Gusdorf, 2008). According to the report published by KPMG (2012), the HRM of organisations is entrusted with the responsibility of seeking that employees are competent in performing their individual activities with the aim of meeting the organisational objectives. In this regard, the HRM should develop effective plans and policies in relation to training and development programs. The employees with the provision of efficient training and development programs are likely to develop their competencies. Moreover, the report of KPMG (2012) signified that training and development approach will facilitate the employees to operate advanced technologies efficiently. In this respect, business organisations will be able to perform with better productivity. Respectively, business organisations will be aided with the opportunity of developing innovative products and/or services in order to meet the expectations of the customers (KPMG, 2012). According to the report published by SHRM (2011), HRM should develop effective policies in relation to flexible workforce, so that employees from different cultural background are managed in a proficient way. The HRM of companies is required to manage flexible workforce by recruiting skilled and talented individuals in a global context. Effectually, business organisations will be able to perform their respective operations in a more effective way. In this respect, business originations with flexible workforce are likely to execute their operations economically due to reduced labour cost. Additionally, the report published by SHRM (2011) revealed that workforce flexibility will enable business organisations to raise their competitiveness in modern business scenario. Besides, business organisations with flexible workforce are able to formulate better strategies in order to improve the performance of businesses in future with lower labour and management cost (SHRM, 2011). Analysis and Discussion From the above discussion, it is quite apparent that the current economy of the world is inclined towards considerable improvement. This can be justified with reference to the fact that the commercial sales grown at a rapid pace and rate of unemployment are also in a controllable state. There are also certain other factors that reveal how the global economy is back on its usual track of enhancement after the economic downturn, which occurred in the year 2008. It is worth mentioning that the performance of the business and rising confidence of the customers over the economy along with stabilization of the emerging markets of the world reveals signs of improvement of the global economy (Giles, 2013). The above discussion also demonstrates that the unemployment rate of the US and the other major economies of the world are in a declining stage, which further depicts signs of improvement in the global economy (OECD, n.d.). Apart from that, factors such growth in advertising sales, increasing production levels of companies, rise in profits of companies and the slow rise in the percentage of jobs are also certain major indicators, revealing how the world economy is in a rising state. It is quite evident that the contemporary business is impacted largely with the changing nature of the business market, approach of the competitors and the changing nature of the economy among others (Grabianowski, 2013). Specially mentioning, the impact of economic growth in the world can be apparently observed to impose in various departments of business, but its influence on HRM is quite significant and noteworthy (Pearson Canada Inc, 2013). The earlier sections of this essay portrayed that HRM functions are regarded as the imperative part of any sort of business. One of these HRM functions mainly comprises dealing with the issues associated with human resource asset of business. This particular function typically includes certain important aspects such as employee recruitment, selection, training and development, motivation, reward and complying with legal formalities associated with human resource to name a few. The sign of economic improvement discussed in the previous sections of the essay is deemed to pose certain potential impacts on the strategy for organisations in HR planning and recruitment in the next 1-2 years (Thite, 2004). In order to determine the effects of improving economic conditions especially in HR planning along with recruitment strategies of the organisations in the next 1-2 years, it can be stated that the HR planning of organisations based on the aforesaid concerns would change. This change would certainly make the organisations to realise that HR planning and recruitment of companies needs to be in line with the demand of the customers and the business market that are deemed to change/rise owing to the economic growth or enhanced financial conditions. In this regard, with economic rise, business leaders will intend to search for innovations in order to come up with differentiated products to meet the market along with customers’ requirements. Moreover, companies will seek to perform their operations globally and catch the opportunity of acquiring maximum benefits from the global economic growth. Every process of the business has the need to get accelerated and change in accordance with the market change, which includes HR programs at the top of the list. At this stage of the business environment, acquiring and retaining the right talent through recruitment has become quite a mandatory task (Thite, 2004). As observed in the previous discussions of this essay, the rate of unemployment is steadily declining owing to economic growth. Strong economic growth will eventually effect the HR department of organizations in terms of raising disagreements with other organisations, concerning the aspect of recruiting the right employees. In this regard, HR planning of the organisations will undergo certain considerable changes. The organisations need to set their respective compensation and rewards based programs better than that of the competitors, so that they could be able to attract the applicants at large. Hence, it can be affirmed that decline in unemployment rate owing to economic growth will impose considerable impact or effect in the HR planning and recruitment in the next 1-2 years (Gusdorf, 2008). With regard to analyse about how the enhancement in the current situations also affect other strategic aspects of HRM, it can be affirmed that managing the present employees of the business is also become a challenging task for HR department owing to economic growth. It is evident that employees always seek to acquire the best for themselves, which may be in terms of compensation, better work environment and personal development opportunity among others. With economic growth or improvement in economic conditions, employees will have the opportunity to avail significant benefits from other companies. Hence, in this regard, the HR department of the business will need to implement proper retention policies and make sure that the present employees of the business remain much loyal to the company having complete fulfilment of their expectations. In addition, the HR department of the companies will also need to ensure forming a better working environment for the employees wherein they can work with utmost safety, designing fair compensation for the employees based on the present wage structure and providing utmost opportunity for their advancement among others. The aspect of maintaining proper relationship with the employees will become more and more significant towards enhancing the retention rate after the development in the economic conditions. This will require HR managers to provide greater value towards the contribution made by the employees in attaining organizational goals and also rewarding them for their good performance (Gusdorf, 2008). Observably, the economic growth has increased the rate of commercial sales in the global market. With this concern, the companies now have the need to increase their level of productivity in order to meet the rising demands of the customers. In this regard, the role of HRM is deemed to be quite significant in fulfilling the aforesaid concern. It is often argued that the performance of human resource in companies is directly linked with the efficiency of providing quality training programs to the employees. Owing to the rising demand of the business market, the employees of the organisations will need to be quite efficient and ensure utmost dedication in their work, so that they can be able to deliver the desired level of productivity in the business (Pearson Canada Inc., 2013). Contextually, employees should be trained for developing their respective performance and raising their competence towards using advanced technologies. Additionally, HR department of organizations will also need to motivate employees more towards knowledge sharing within the business network for further assuring maximum innovations in their operations (Thite, 2004). Hence, it is apparent that there would be severe changes in the policies and approaches of HR department of various organisations in order to move in parallel with the economic growth or the enhancement in the economic conditions. Conclusion and Recommendations From the above analysis, it can be comprehended that the economic conditions of the global economy have improved by a certain extent in a slow pace. The improvement in the global economic conditions can be witnessed from different indicators that encompass improved lending policies of banks, reduced debt of private along with public sectors and decline in the rate of unemployment. Moreover, developed countries are observed to devise different monetary and economy polices enabling to increase confidence in investors, consumers and businesses on a global context. In this regard, HRM of business organisations are required to develop effective HR policies in order to improve their performances and competitiveness. Respectively, HRM should formulate different policies with the objective of recruiting skilled and competent employees, so that operations can be performed with better productivity. Subsequently, HRM should seek that a suitable organisation climate is developed with better conflict management policies, benefits and compensation plans. The HR policies that are developed should be effective in attracting and retaining skilled employees. Additionally, a flexible workforce should be maintained with the aim of ensuring that business operations are executed with reduced labour cost. Thus, HR policies and strategies should be developed in the present improving economic conditions, so that business organisations are able to perform with better competency and competitively in future. The analysis of the paper depicts that global economic growth is accompanied with several noteworthy changes in the labour market that further impacts the HR functions of the organizations operating in the global market. This will force HR department of companies to change their policies and approaches to deal with the changing scenario of post global economic growth. Contextually, certain recommendations have been made for the companies and their HR departments that might be fruitful to implement. These include: Policies in Recruitment In recruitment, designing proper policies to attract applicants is quite important and it requires to be developed after the improvement in the economic conditions, as competition in labour market would be high. In this regard, HR department will need to frame policies that should include forming better compensation packages, providing attractive opportunities, which depict maximum employee development while working with the company and formulating attractive incentive or reward programs among others. Policies in Retention Retention is important in managing the existing employees of an organisation. It would be vital to mention that the existing employees are often regarded as valuable assets owing to the reason of having greater work experience. However, retaining them after the improvement in the economic conditions will be a hard task for the companies, as the employees are deemed to obtain better and attractive offerings from other companies as well. In this regard, the HR department of the companies will need to develop policies, containing proper compensation in accordance with the present wage structure, proper working environment with utmost safety for employees, attractive reward program and maintenance of proper interpersonal relationship to name a few. Policies in Training and Development With signs of economic growth, the commercial sales are deemed to reveal a rising trend owing to increased demands of the customers. Hence, increasing productivity is the only option that the organisations will be left with. In this regard, the role of employees will be vital. Contextually, HR department will have the changing task to train the employees for maximum productivity aligning with the changing goals of the organization owing to economic growth. References Gusdorf, M. L., 2008. Recruitment and Selection: Hiring the Right Person. Society for Human Resource Management, pp. 1-15. Giles, C., 2013. Global Economy ‘Back on Track’. Financial Times. [Online] Available at: http://www.ft.com/intl/cms/s/0/6b96b4a8-2d11-11e3-8281-00144feab7de.html#axzz2khpjcmlp [Accessed November 16, 2013]. Grabianowski, Ed., 2013. 10 Signs the Economy Is Improving. Home. [Online] Available at: http://money.howstuffworks.com/10-signs-the-economy-is-improving.htm#page=9 [Accessed November 16, 2013]. Jochnick, K. A., 2013. Kerstin as Jochnick: Monetary policy And The Current Economic Situation. BIS Central Bankers’ Speeches. [Online] Available at: http://www.bis.org/review/r130823a.pdf?frames=00 [Accessed November 11, 2013]. KPMG, 2012. Rethinking Human Resources in a Changing World. KPMG International. [Online] Available at: http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/hr-transformations-survey/Documents/hr-transformations-survey-full-report.pdf [Accessed November 11, 2013]. Monica, P. R. L., 2012. Economy IS improving. Don't Mess It Up, Congress! Investing. [Online] Available at: http://buzz.money.cnn.com/2012/10/17/economy-is-improving-dont-mess-it-up-congress/ [Accessed November 11, 2013]. OECD, No Date. Global Economy Is Improving But Europe Lags Behind, Says OECD. Home. [Online] Available at: http://www.oecd.org/newsroom/global-economy-is-improving-but-europe-lags-behind.htm [Accessed November 16, 2013]. Pearson Canada Inc., 2013. Human Resources Management: The Field and Its Environment. Chapter 1. [Online] Available at: http://www.pearsoned.ca/highered/divisions/virtual_tours/dessler/dessler_ch01.pdf [Accessed November 11, 2013]. SHRM, 2011. The Top Workplace Trends According to HR Professionals. SHRM Workforce Forecast, pp. 2-45. Thite, M., 2004. Managing People in the New Economy: Targeted HR Practices That Persuade People to Unlock Their Knowledge Power. SAGE. Stefanescu, F. & Darabaneanu, D., 2011. The Human Resources Management in the Context of the Economic Crisis. 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