Changes in the Macro-Environmental Factors and Its Impact on Human Resource - Essay Example

Changes in the Macro-Environmental Factors and its Impact on Human Resource The ever changing nature of the modern business attempts to maintain a competitive edge by effectively managing the human resources who are the real assets of any business enterprise. Managing human resource is a complex task in the changing macro environment of a business. The HR practitioners need to have a thorough knowledge of the macro environmental factors to cope with the possible changes in the areas concerned. An arduous awareness of the government, legal, economic, technological and socio-cultural factors helps the management direct the employees in the organisation effectively. Human resources are the real assets and they have to be sensibly dealt with. An HR practitioner’s role does not limit to strategic roles alone but a combination of both strategic and operational roles. An organisation’s HR practices and policies are influenced by the knowledge of the HR practitioner regarding the macro environmental factors. Any change in any of the macro-environmental variables will certainly have an impact on HR practices. When the HR practitioner of a company has ample awareness regarding the macro environmental factors, this helps the company manage the human resources effectively. HR practices have undergone a sea change during the modern times due to changes in government policies, as well as changes in legal, economic, technological and socio-cultural factors. The HR practitioner in a company has to perform many roles and functions. The responsibility of leading the employees rightly lies in the hands of the HR practitioner. Only the sensible HR practitioner can motivate the people in an organisation. The role and scope of an HR practitioner is changing tremendously with the passage of time. The roles and scope of HR practitioners have undergone vast changes. “The role and scope of an HR practitioner is changing”. (The role and scoppe of an HR practitioner is changing,Cover Story, Jobwerx) The changes in macro environmental factors like government, law, economic conditions, technology, society and culture have lead to overall changes in HR practices. The main responsibility of any HR practitioner is that of formulating policies and practices which go at par with the objectives of the organisation and also the development of most suitable human resource strategies. “Developing Human Resources strategies, policies and practices that meet the needs and objectives of the organisation” (So you want to be an HR practitioner...?) is an important function of the HR practitioner in a company. Apart from this, HR practitioners involve themselves in the processes of selection and recruitment of new employees. They develop a list of prospectus candidates and by evaluating their performance select the best persons out of them. “Human resource coordinators design, implement and administer programmes to attract and retain appropriate employees” (Edunet: Careers-Human Resources Practitioner). An HR practitioner requires an awareness of the macro-environmental factors as they highly affect an organisation’s human resource practices. The introduction of international minimum wages policy is one of the macro-environmental variables that would have a far reaching impact on the human resource over the period of time. The international minimum wages programme has been accelerated by the globalisation and it has received a great momentum during the years. Any business depends on its macro-environment and therefore the HR practices too. The term macro-environment can be defined as “major external and uncontrollable factors that influence an organizations decision making, and affect its performance and strategies” (macro environment definition). Thus any factors external and uncontrollable for the business enterprise are known as the macro-environment of the business. A wide variety of factors come under the macro-environment of a business enterprise such as economic, legal demographic social and political conditions and also technological changes and natural forces like earthquake, flood, drought etc. These factors affect the business to a greater extent. As they are beyond the control of the business enterprise it can adversely affect the business most of the time. Such factors affect the HR practices of a company. Government regulations have always played a major role in controlling the HR practices of many institutions across the world. It is very essential for the HR practitioners of a business enterprise to have a wide fund of knowledge of the macro-environmental factors which affect the business as well as the HR practices. The in-depth awareness of the HR practitioner regarding the factors beyond the control of the organisation helps them manage the human resource effectively. Technology, legislation, and globalisation are the important macro-environmental factors that play a crucial role in the management of human resources or the HR practices of a business organisation. HR practitioners in the present business atmosphere must be able to adhere actively to the formulation of a company’s strategic plans and programmes. They are in no way treated as a back office support unit in the complex business environment; because the management has recognised the importance of human resource in an organisation. “HR practitioners should no longer be regarded as a back office support unit”. Of late, the management has realised the significance of human capital as a crucial and sensitive factor leading the organisation to the zenith of success. An HR practitioner requires an awareness of the macro-environmental factors as they highly affect an organisation’s human resource practices. The introduction of international minimum wages policy is one of the macro-environmental variables that would have a far reaching impact on the human resource over the period of time. The international minimum wages programme has been accelerated by globalisation and it has received a great momentum during the years. “The acceleration of the globalisation process over the last two decades, however, has led to the question of minimum wages gaining recognition as a significant international issue”. The introduction of minimum wages policy has a far reaching effect on the HR practices of different companies of the world. The international minimum wage policy implies that “From 1 October 2009, tips, service charges, gratuities and cover charges can no longer be used to make up National Minimum Wage” and it means that workers who are eligible will have access to the National Minimum Wage as the base pay and all other perks are excluded from the minimum wage. The introduction of Minimum Wages Act has a far reaching effect on the human resource. The minimum wage paid to the workers was increased from £5.73 to £5.80 as the introduction of national minimum wage rate policy. The hike in wage due to minimum wage policy is the biggest impact on the human resource. As a result, the modest increase in the minimum wage will put more money into the pockets of nearly a million low-paid workers in the United Kingdom alone. . Apart from these changes, by 2010, some of the major impacts are going to take place on the human resource as a result of minimum wages programme. There is a plan to extend the minimum wage to workers aged 21 and the process of fixing of wages for apprentices is also going to take place in the near future. These are the sum total of the effects on the human resource as a result of the Minimum Wages Act. The introduction of Minimum Wages Act will positively affect the human resource. It provides financial freedom to lower income group. The rise in the minimum wage will help the people lead a more satisfactory life. So far, none of the negative effects of Minimum Wages Act on the human resource has been found out. “No significant adverse employment effects are found for any of the four demographic groups considered (adult and youth, men and women) or in any of the three datasets used”. The argument that the Minimum Wages act would reduce the employment opportunity across the country is not yet substantiated and proved authentically. So it can be clearly stated that the Minimum Wages Act affects the human resource positively and it has far reaching positive impacts on the human resource as a whole. The human resources practitioner in an organisation should be prepared for such a change in the macro-environmental factor namely law. Companies with the help of the human resource practitioners need to make necessary changes in the HR policies and practices that are followed by the company. Due to the passing of Minimum Wages Act, the business organisations’ responsibility has increased to a greater extent. As the company wants to prepare for the Minimum Wages Act, the HR practitioners need to go for adequate changes in the overall human resources practices and policies. The introduction of Minimum Wages Act has given emphasis to strategic management of human resources and as a result, the human resource practitioners are trying to “expand their repertoire and avoid overspecialization, to anticipate and prepare for new developments, and to improve their ability to understand and diagnose organizational issues” (Jackson and Warner). Likewise, the HR practitioners stand prepared to face any changes in any of the macro environmental factors. Therefore it can be concluded that the changes in any of the macro-environmental variabls affects a company’s human resource policies and practices. The human resource practitioners should be aware of all possible changes in the field concernd so that they can cope with these changes effectively. Works Cited Craig, Tara. Employment law changes: potential impact on HR and business. 30 September 2009. 10 November 2009 . Edunet: Careers-Human Resources Practitioner. 10 November 2009 . Human Resource Management. 2003. 10 November 2009 . Jackson, Peter and Burk W Warner. Making the SmithKline Beecham merger work. 1991. 10 November 2009 . macro environment definition. 2009. 10 November 2009 . Pay and the National Minimum Wage (NMW)- BIS. 10 November 2009 . Shirkosh, Mehdi. The Case for an International Minimum Wage in the Context of Free Trade. Januray 2005. 10 November 2009 . —. The Case of an International Minimum Wage in the Context of Free Trade. 31 March 2005. 10 November 2009 . So you want to be an HR practitioner...? 2007. 10 November 2009 . Stewart, Mark B. The Impact Of The Introduction Of The Uk Minimum Wage On The Employment Probabilities Of Low Wage Workers. 2002. 10 November 2009 . The role and scoppe of an HR practitioner is changing,Cover Story, Jobwerx.com. 06 May 2002. 10 November 2009 . Read More