Human Resource Management - Essay Example

Human Resource Management and Section # of INTRODUCTION OF HUMAN RESOURCE MANAGEMENT In contemporary times, the term ‘Human Resource Management (HRM)’ has virtually replaced the traditionally used term ‘personnel management’ when referring to the organization of the people within an organization. In literal terminology HRM is regarded as a carefully and deliberately planned approach towards controlling and managing the ‘people’ asset of the organization, which occupy a crucial position in the ultimate goal achievement process, both individually and collectively. Effective management of the human resource is necessary for any organization; therefore the underlying philosophy behind the strategic management in this sphere is to attain success by efficiently utilizing the most important asset of a company (Armstrong, 2006, 3). Its target is focused upon examining the likely prospects of enhancing the satisfaction and production of the workers of an organization (PdfCast, 2010, 1). The main concern of this department is to increase the recognition of the importance of the working people for any firm, thus it professionalizes the treatment of the workforce by defining policies and undertaking practices which are for the benefit of the people of an organization and are not in collision with the goals of the organization, since the human resource of the modern times demand a greater and improved outcome from their jobs hence they respond positively to the HR managerial practices and policies which help them achieve this aim and provide them increased work autonomy and control over their working life (PdfCast, 2010, 4). PRACTICES OF THE HUMAN RESOURCE DEPARTMENT The practices and policies of any managerial department of an organization are created with the intention of attaining a specific outcome, which must be in line with the organizational goals or help proceed towards them. The policy goals of the Human Resource Department can be categorized as follows (Armstrong, 2006, 10 - 11): Treating the people who work for the organization as assets which are important with regards to the competitive advantages of that firm To align the policies of the HR department with other strategies and policies of the corporation Developing and maintaining coherence between the HR policies and practices It aims to create an organization which is susceptible to changes and is therefore flexible and flatter in order to adapt to volatile fluctuations in the business world It should initiate and sustain team management qualities and internal cooperation within the organization It should mould the perceptions and mindset of the people within the organization according to the ‘customer first’ philosophy to progress towards attaining customer satisfaction It should provide empowerment to the workers of the organization, such that they are capable to initiate and manage their self development process and learn in order to improve It focuses on encouraging the move towards a performance driven culture by the development of reward strategies Improving the level of internal communication within the organization by increasing the involvement of employees It should be capable to foster the sentiment of commitment and loyalty towards the firm in the workforce Increasing the responsibility on the line management for the human resource policies being enacted and implemented Enhancing the role of managers to include facilitation and enabling Furthermore, the practices and activities of the human resource department are defined in order to achieve these policy goals. The most common practices of the HR Department include: Adhering to the Equal Employment Opportunity (EEO) provision principle Job Analysis (including Job Description and Job Specification) Human Resource Planning The process of Employee recruitment and selection, the motivational strategies to be employed and the orientation of these activities Creation of the performance evaluating methods and tactics and compensating the workers accordingly The training and development of new and existing employees The employer-employee relation building Safety standards, health policies and the wellness program to be initiated in the organization It must be ensured that all these policy goals and practices should be in compliance with four Human Resource orientations: they should be action oriented, such that they focus on implementation rather than mere recording and writing of policies and this would enable the firm to increase chances of employee development and contentment; they should be people oriented, in a manner that they are capable of taking into account individual needs and preferences and could mould in accordance with these specification to motivate the workers; they should be globally oriented, the functions and activities must expand on a global level, and must follow worldwide acceptable principles, they should adhere to global norms and values and be flexible enough to be molded according to country specific requirements; most importantly, all these practices and policies must be future oriented, that is they help the firm in achieving the future goals and objectives by contributing in the form of well-trained and motive employee force which is committed towards the organization and hence the human resource department plays a key role in long term strategic plans of any organization (PdfCast, 2010, 5). ANALYZING THE EXTERNAL ENVIRONMENT With increased complexity in the business environment, it has become increasingly difficult to pinpoint the entity causing a certain effect on the outcome of a strategy, as the numerous forces in the environment interact with each other and produce intricate and complicated cause and effect relationships, furthermore it is virtually an impossibility to correctly predict the future effects of the factors having an impact on the business, the policy makers therefore confront the twin problems of ‘complexity and uncertainty’ when deriving the most plausible set of direction for the business to follow. The decision makers thus endeavor to understand the environment and develop policies which could be adjusted and molded in accordance with the rapidly changing business environment (Winfield et al., 2004, 342). The information collected by these strategists are of two levels: Macroenvironment- which consists of the wider environment upon which the organization has essentially little or no control but which nevertheless affects the firm’s activities, and the Microenvironment- which includes the immediate factors which would affect the practices of a firm, this includes customers, suppliers, competitors etc., the firm can exert some sort of control over these factors. Regardless of the level of information gathered, the aim of the strategists remains the same that is to use the data to answer some basic questions about the changing environment’s nature, its impacts on various entities, and the likely probability of adjustments in the policy structure. The external, macroenvironment, could have drastic effects on the business, and it is essential to analyze the factors which are impacting the firm and the way to control them by policy readjustments, for this purpose the strategists use the tool of PESTLE Analysis, which stands for the Political, Economic, Socio-Cultural, Technological, Legal and Environmental Factor’s Analysis. These are the external factors affecting a business from various sides, and the extent of their influence is subject to variation over time, mainly depending on the organization’s size, nature and the rate of growth of the organization. The HR Management utilizes this information to figure out the implications on the organization and the likely affects on the policy for the future, which should achieve the organization’s objectives (Winfield et al., 2004, 342 - 344). THE IMPORTANT ROLE OF HUMAN RESOURCE MANAGEMENT IN CHANGING ENVIRONMENT The changes in the macro and micro environmental factors affect the activities of the HR Department in numerous ways, and the importance of systematically measuring the implications of these changes and adjusting the course of the organization in accordance with them increases the significance of the HR Department. Many firms till today are unaware of the impacts of their HRM practices, and thus tend to ignore the act of assessing the short term and long term results of their Human Resource activities. Proper management, with the help of the strategies of the organization, will aid them to improve their HR practices and develop a stronger link between the HRM activities and the effectiveness of the organization in the changing environment (Bernadin, 2007). HRM thus plays a crucial role in steering an organization in the right direction when drastic changes in the environmental factors are likely to affect the business and sway it. There are six most significant types of changes in the environment which call for effective HR planning (ZainBooks, 2010): Rapid Change Most of the organizations today are placed in an ever changing environment, and hence it is required of them to change fast and efficiently with the environment in order to survive in the market and progress from their operations. The human resource is at the core of the system to respond effectively and quick to these changes, and it can undertake different ways to help a firm cope with environmental factor changes, such as workforce diversity, the increased in the diversity of the employees in an organization has increased due to increased world interaction, and thus capitalizing by the effective management of this diversity can help a firm to adjust to this environmental change (ZainBooks, 2010). Increased Globalization With the advent into the 21s century, the most obvious change is the increased level of interaction between the people around the globe, majorly in the form of foreign competition, and as many traditional firms are unaccustomed to responding efficiently to this foreign competition due to their operations being confines to only the domestic market without foreign interference, they are left in a dire situation. HR can enable a firm to compete globally, by developing a global company identity, and expanding the workforce to acquire foreign expertise and managerial skills, increasing the workforce diversity to remove cultural differences and developing a cohesive cultural atmosphere, initiating effective motivational and encouragement systems in order to steer the workforce towards competing with the foreign interference etc. Some firms even move towards creating international alliances, and this requires a highly trained and committed workforce, which is the responsibility of the HR of a firm, and thus the firm could efficiently established worldwide competitiveness (ZainBooks, 2010). Changes in Legislations The most crucial role of the HR by far has been its responsibility to distance the organization from legal regulations, thus keeping it out of trouble with the law. Many decisions can collide with the legislations passed by the State or local governments, and many firms are deeply concerned about the liabilities stemming from these collisions. The success of the effective management of the human resource of an organization is tightly linked with its ability to deal with the law. In order to survive and operate effectively within the legal framework requires the firm to keep a record of the external legal environment and the development of the internal system to match this environment and comply by its rules (such as through training, supervision and grievance processes). Many firms today are moving towards establishing the system of dealing with any internal issues prior to the consideration by the affected employees to file a lawsuit (ZainBooks, 2010). Technological Advancements The world is a witness to a never before experienced phenomenon of rapidly changing technological sector, especially the computers and the communications sector, it is estimated that the changes in the technological sector are so fast paced that the an employee needs to undergo a change in their entire skill set and training about 3 to 4 times in a career in order to survive in the labor market. The training and upgrading of the workforce is the responsibility of the HR Department of an organization (ZainBooks, 2010). Changes in the roles of work and family The percentage of families involved in dual careers, wherein the wife and the husband both work to earn, has increased rapidly over time, and grows every passing year. However this means that the women have to do double work, since they do not renounce their home responsibilities due to jobs, hence the human resource department needs to acknowledge these sensitivities of the workforce and develop ‘family friendly’ employment packages which would give them an advantage over their competitors in the labor market. The effective utilization of these HR tactics to retain or attain the best skilled employees in the market, regardless of the gender, would help the firm achieve its objectives and improve competitive performance. A firm has to face detrimental consequences if its employee turnover increases due to its inflexible and unfriendly policies towards the dual career family workers, and the trained and skilled staff might job jump to the rival and the firm would lose its human capital and their competitive edge (ZainBooks, 2010). Shortage of skilled labor and the growth of the tertiary sector The service sector has undergone rapid growth in contemporary times, and this has resulted in the increased level of employment by the businesses operating in this sector. The growth is a result of many different factors such as changes in the tastes and preferences of the consumers, legislative changes, technological and scientific advancement that has led to the elimination of many jobs in the manufacturing sector, and the overall changes in the method of operating, organizing and managing a business. The jobs require technical skill and trained staff and most of the labor is incapable of fulfilling the requirements, many companies to date complain that the level of employee training and their skills are dwindling, and do not match up to the requirements, and hence it is required of the HR Department to manage the workforce by providing the necessary training to the employees in order to remove the effects of the shortcomings of inadequate skills (ZainBooks, 2010). COMPETITIVE ADVANTAGE All businesses have to interact with other rival firms in the market, unless they are a monopoly, and thus in order to persuade the consumers to purchase their product rather than the competitor’s, they have to develop certain features which would create differentiation in the product they are selling, by offering the market greater value in the form of either low prices than the rivals, or by offering greater services at high prices, such that the consumers do not feel that they are being exploited (Tutor2u, 2010). The competitive advantage could usually be recognized when a firm is receiving profits which are greater than the other firms offering the same product. The main aim of organizations today is to achieve a sustainable competitive advantage. According to Michael Porter, the competitive advantage could be classified into two forms: the edge over rivals based on lower cost of production thus leading to higher profits is known as the cost advantage, the other form of competitive advantage is differentiation which essentially refers to the situation wherein a firm is selling a product with added benefits than the rival products. These two are forms of positional advantages since they pertain to the position of the firm in the wider market. The other type of advantage is the resource based competitive advantage which focuses on effective utilization of the resources and materials being used in order to create a greater value in the product as compared to the competitors. A Model of Competitive Advantage is as follows (QuickMBA, 2010): HUMAN RESOURCE MANANGEMENT AND COMPETITIVE ADVANTAGE HR has undergone massive changes along with the constant fluctuation in the environment of the competitive market, and it has been recognized that HRM plays a strategically crucial role in the success of any organization, as firms which do not focus upon recruiting and retaining employees with talents in their organization would have to lose at the hands of the competitors and would thus be left in a devastating condition as their competitors would outrun them in attaining a better human resource capital. With increasing competition, both globally and domestically, the organizations must focus upon building more adaptable and customer-driven atmosphere and policies in order to succeed, and the HR manager would be responsible to induce this commitment in the workforce. In order to progress, the HR should be well aware of the business’s overall strategies and objectives and must be a business driven structure, in addition this department should also have the authority to influence key policies and practices of the organization. HR Managers take the role of coaches, mentors, supervisors, trainers, counselors etc., with the intention of motivating and encouraging the workforce to strive towards a common objective. The HR department is also responsible to uphold the virtues of the organization culture, such as ethics, beliefs, values, and spirituality, especially with regards to workplace diversity within the organization. The HR Department under the Human Resource Manager can undertake certain practices to gain sustainable competitive advantage for the organization: Workplace Diversity The dimensions of workplace diversity are widespread, they can range from age, gender, religion, ethnicity, nationality, physical characteristics, race and class, sexual orientation, education, location, marital status, income group and social status, experience etc., but the features are not confined only within these boundaries. The future of any organization of contemporary times depends on the management of their diverse workforce, since they are the pool of talents which would bring in innovative ideas into the organization and steer it towards its objectives. The issues and challenges presented by this phenomenon could be converted into a valuable asset if they are properly managed and capitalized. When the organization is equipped with a mixture of employees, it would make responding to different market situations more easily, as some member of the force would have some crucial point to contribute which could spell success for the overall business. They can take advantage of business opportunities on a global scale, and move the firm towards progression into the international arena, which is one of the most basic organizational goals. This is especially crucial for Multinational Corporation which are spread over the world, in different nations and employing a wide variety of individuals coming from a different set of people, hence the HR manager has to be careful and should properly initiate a ‘Think Global, Act Local’ strategy throughout the firm in order to attain the maximum possible advantage from the workforce. Workplace diversity is also present in Small and Medium Scale Enterprises, especially in Singapore, which has a population of only 4 million people, but it is efficient in its progress towards technological advancements and knowledge attainment due to their focus upon properly managing their diverse workforces in SMEs by initiating cultural based training programs for the HR personnel who have to make sure that every individual is cooperating and working with others in the organization. They are also responsible to ensure that the foreign talent would not hamper the career advancement of the locals of their country (Chan, 2009). A shift in philosophy must be initiated , which should eliminate ethnocentrism and develop a globally oriented mindset instead, this should be ingrained in all the managerial framework and the HR practices, in order to ensure maximum compliance with this principle. The workplace diversity could be managed through the following best practices: Planning a Mentoring Program: the departmental managers could impart mentoring sessions to teach the employees who are different from them, it would develop communication, cohesiveness, integration and also remove cultural barriers. To attain success in this practice it is important that the managers who are mentoring must be initially trained for the purpose to avoid any possibility of conflicts, thus it is better to employ only the experts for this purpose. The Society for Human Resource Management with the Fortune Magazine initiated a survey in 2001 to figure out the diversity related training in the Fortune 1000 companies, and it was revealed that most firms imparted diversity training to individual employees at all levels of the organization, from the highest ranked managers to the part-time workers, and 40 percent of the companies stated that they increased their diversity training measures (Nixon and West, 2001). Organizing Talents strategically: as the world has become increasingly globalized, the need to acquire knowledge about the different parts of the world has also increased significantly, whether physically or virtually (such as companies involved in E-Commerce), therefore a diverse workforce is an asset which the organizations con use for this purpose. For example, when China opened its barriers and moved into the global market in the 1980s, the Chinese Giant companies which had to export to foreign countries were seeking help from the Singaporean employees, this is due to the great knowledge bank of Singapore pertaining to the Chinese as well as the Western markets. In order to follow this trend, the HR manager should be capable of organizing the workforce strategically. Leading the Talk: An HR manager must make the diversity in workforce evident at every level of the organization, or else it might give some employees the impression that they have no future scope in the organization and it would discourage them from putting maximum effort into their work. The HR manager must be patient and should be capable of addressing all diversity related issues with proper responses. Control and Measure Results: The HR manager should carry out frequent assessments of the organization and assure that issues like pays, benefits, working conditions etc., are up to the mark as compared to the competitors. Without proper monitoring, even the best of efforts could become useless, and could adversely affect the working atmosphere of the organization and force the employees to jump to the competitor’s firm. Motivational Approaches Motivation of employees is crucial for an organization to succeed, since they are the driving factor behind the employees’ commitment to their work and their endeavors towards obtaining the desired results. As the needs vary from individual to individual, it is necessary to make the motivational packages flexible enough to meet the needs of the maximum number of employees. However, the motivational efforts for a diverse workforce are very complicated and require deliberate planning, since the preferences of people from different areas are different, for example when the Hierarchy of Needs model of Abraham Maslow is considered, the motivational approaches based on maximizing self-interest are generally popular in people from Australia and Great Britain, and countries where capitalism is a generally acceptable ideology, however in areas where the quality of social life is the most cherished phenomenon, such as Denmark, Norway, Finland etc., the social needs would be the top priority. Therefore, the packages must be offered in such a way that people from different backgrounds could choose what is conducive to them and it must be ensured that nobody feels alienated or ignored (Human Resource Management, 2010). Motivation could also be done through the initiation of Gain sharing programs, which are incentive plans for employees that would make them put maximum effort in achieving the overall objectives of the organization, and the resulting gains are then distributed amongst the managers and the employees of the firm. This could be a form of HR practice which could differentiate a firm from its competitors and attract the skilled and talented employees to the firm; hence HR could help to develop competitive advantage (Chan, 2009). CONCLUSION In light of all the theories and practices mentioned in this study, it would be right to conclude that the Human Resource Management holds a key position in the progress towards the attainment of organizational objectives, and since the macro and micro environment in which a business operates undergo incessant fluctuations, it is necessary to ensure that the organization is flexible enough to be molded in accordance with these environmental changes, which could be done through the help of the Human Resource Department because they are responsible for managing the most valuable asset of any organization, that is people. When the employees of an organization are motivated and committed towards achieving a certain common target, then the company could withstand all forms of pressures from the environmental changes. The HR Department could manage the workforce diversity and help the workers of an organization adapt to rapid changes, technological advancements, increased globalization and other environmental changes. Furthermore, with the aid of the HR practices of managing workforce diversity through different programs and motivational approaches, an organization could gain sustainable competitive advantage and lead the firm into the future on stable grounds. References Armstrong. M (2006) Human Resource Management Practice- 10th Edition. United States of America. Kogan Page Limited Bernadin. J (2007) Human Resource Management- 4t h Edition. McGraw Hill Publications Chan. A (2009) The Challenges of Human Resource Management. Accessed August 7, 2010 from http://www.zeromillion.com/business/hrm.html Human Resource Management (2010) Contemporary issues in Motivation. Accessed August 7, 2010 from http://www.citeman.com/9846-contemporary-issues-in-motivation/ Nixon. J C and West. J F (2001)’America addresses Workforce Diversity’. Business Forum. Accessed August 7, 2010 form http://www.entrepreneur.com/tradejournals/article/89025101.html QuickMBA (2010) Strategic Management: Competitive Advantage. Accessed August 7, 2010 from http://www.quickmba.com/strategy/competitive-advantage/ PdfCast (2010) Introduction to Human Resource Management and the Environment. Accessed August 7, 2010 from http://pdfcast.org/pdf/introduction-to-human-resource-management-and-the-environment Tutor2u (2010) Competitive Advantage. Accessed August 7, 2010 from http://tutor2u.net/business/strategy/competitive_advantage.htm Winfield. P W; Bishop. R and Porter. K (2004) Core Management for HR Students and Practitioners- 2nd Edition. Italy. Elsevier Butterworth-Heinemann ZainBooks (2010) HRM in a Changing Environment. Accessed August 7, 2010 from http://www.zainbooks.com/books/human-resource-management/human-resource-management1_7_hrm-in-a-changing-environment.html Read More