Fair Damage on Various Economies - Case Study Example

The problem “The biggest problem that the Countries are facing is the role of Human Resource department in exploiting the country’s economy, as the department is getting more popular the standards are also being set higher and higher day by day, this is all causing redundancy and premature retirement which is putting fair damage on various economies of the world, lets discuss in detail.” Executive Summary Martin has defined redundancy in 2000 as “the work for which the employee was employed has ceased or diminished. Here the selection of a particular individual has to be shown to be fair”. It shows that the entire process starts from the time the employee is recruited, though it is a long procedure and the organization tries to be as fair as they can in selecting employees, but there is no guarantee that the employee would keep the job, so from this view the redundancy threat starts taking place in the mind of the employee, only a strong bond with the organization can keep this fear out of employee’s mind. The human resource department in any organization of this world has gained most importance in the modern era, it is because of the fact that what ever an organization achieves, it achieves on behalf of human resources, today human resource gains the utmost importance in every field simply because of the growing demands of the world, there is an entire process used in organization for employees, which includes all the happenings from their selection to retirement or redundancy. Redundancy in Relation to Economics The employment is always related to the well being of the economy, if an economy is having job saturation and the employment cycle is not working well than it automatically makes an economy weaker and unstable, as a consequence other related factors are also affected, such as GDP/GNP, so in order to keep an economy healthy the working of the employment cycle should be proper and the various sectors running a country’s economy should keep in view those important things that can disturb the economy of that country. The entire unemployment process starts from the point when the disturbance is caused in the society, which in the case of Europe was the beginning of the nineteenth century when the industrial sector gained popularity and concepts of trading started getting prominent, in that time the employment and unemployment had taken place, the growing number of policies and rules were also causing unemployment, it had almost discouraged every person from the working class, because they had no surety of their current job, it was becoming a problem, but most importantly the government had planned of working with the best human resources possible, one can imagine that if every body in this world would be at his/her level best than there would be no need of hiring and firing, and it would have been a heaven, but in real case it is always difficult to find the best, and it doesn’t really mean to fire the average or poor to hire the best. “Each organization had its own situational realities, characteristics and challenges. Business strategy and the role, strategy and process of Human resources therefore have to be customized. Enabling the organization to meet the demands on them in the wake of competitive pressure released by reforms, liberalization and globalization, five strategic decision-making categories were identified as resourcing, performance management, rewards, management development and the employee relations” (Gupta, 97: 1998). Human resources are the key for any sector of this world to grow, there are companies that believe in hiring and firing policies, but it is very unethical to do so, such policies have played a vital role in promoting the poverty in the world, the companies should not forget that they all have to conduct operations through human resources, if they would not be there to support than problems can arise, “We focus here on the ideological origins of thought about poverty and employment, particularly ideas about the right of individuals to be employed and the duties of the state to assure work and subsistence. Are such ideas narrowly based on socialist ideology, or do they have broader ideological and pragmatic roots? Do contemporary conceptions of social and economic rights have broad enough support to overcome renewed classical liberal assertion of a more limited role of the state in the struggle against unemployment and poverty?” (Siegel, 23: 1994) Another cause for unemployment that seems to be very valid is that the presence of neo-colonialism in the world1, such as China interrupted the textile sector of Europe and Europe faced a heavy loss in selling their textile goods, in such case due to the external forces the country’s economy gets disturbed and thus the company has to eliminate its employees with out any other reason, this is another cause of unemployment, one can also say that the increasing number of multinationals also cause unemployment in a way that they form specific standard that the employee has to reach in order to work for them, and at times people working in different companies loose their job because of the growing competition with the multinationals, other reasons for unemployment might be poor management causing dissatisfaction to the employee, and also poor compensation method, in such case the turnover rate is high and job relation is finished by the employee not the employer but it is not in comparison to the actual firing from job done by employer. One of the biggest causes for unemployment is the increasing number of population, one can understand as if the population would increase than the number of educated people are likely to increase and so as the consumption of goods, and thus the number of industries and sectors, there fore the competition increases and every one thinks of finding the best available human resource for their organization and as discussed earlier that every one is not equally capable of working well so a conflict arises and a lot of hiring and firing goes on, the organizations keep on changing their policies and their recruitment policies and keep on increasing the standards as a result people who are unable to cope with the best skills and talent loose their jobs. “Population aging is continuing to occur in all of the countries examined in this study. The pace of population aging will accelerate in all countries during the first quarter of the twentieth first century. In Japan, the Netherlands, and Germany, a rapid increase in the elderly population will occur between 2000 and 2010. Similar increases will occur in France, the United Kingdom, and the United States beginning in the second decade of the twenty-first century” (Rappaport, 257: 1993). Retirement in relation to economics Retirement is perhaps a more respectable way of firing someone and telling him/her that he/she is not wanted in the organization anymore, the employee’s behavior in this case is some what positive in accepting the retirement from the organization, though it has been seen that retirement also causes unemployment in the society, it is a strange thing but true, when a retired person seeks job in another organization he/she gets it because of experience and thus the other organization hires this one experienced person and fires two of the junior or average employees, so in this way the retirement acts as a promoter to the unemployment, another thing that happens from retirement in big organizations is that people gather a lot of money from retirement and than they put this money in banks, which means that money is not in its full function and so it doesn’t get fully utilized, this also disturbs the economy of the country, though if retirement keeps on moving and people don’t seek another employment than the there would be a time when employment cycle would become stable and the proper inflow and outflow of human resources would be perceived, but again it is not a real world case. “Simple life-cycle models of labor supply and savings generally omit uncertainty. Yet people experience considerable uncertainty about wealth accumulation, financial needs, health, and job opportunities. These uncertainties imply that people are continuously reconsidering their plans for retirement and wealth accumulation as their economic and health positions develop” (Aaron, 97: 1984). It is the best way to end the employment relation by giving a golden handshake or retirement with some incentives such as pension, Aaron defined it in 1984 as “the age at which a person stopped working full time, at which he declared himself retired or unable to work, or at which he declared himself retired, irrespective of his health status”, therefore the actual causes of retirement might be the self-actualization stage at which a person achieves every thing in life according to him/her self and therefore he/she starts thinking that there is no need for more working as it would have no use and would not give him/her more satisfaction, another factor of retirement is perhaps the downfall of the organization, when the organization’s products or services reach a downfall stage than most of the senior employees take retirement blaming the poor management of the organization also they have some doubt in mind that it is better to quit working with the organization rather than waiting for its bankruptcy or getting fired, and also same thing happens from the point of view of the organization where they encourage their employees to seek retirement, there are numerous organizations that think that they should make their employees retire as firing them can cause the organization in a way that competitors would hire the fired employees and than they would work against their previous organization, so these were few basic causes behind retirement. Conclusion It is very unethical to fire some one immediately without informing them, but it is happening in almost every country of the world, employment is a self-satisfactory thing and so as retirement, by producing unemployment in a wrong manner, someone can also damage not only the unemployed person but also the economy of the state in which the person is living, retirement is surprisingly an incentive given to the people for leaving their post and rest for rest of their life, but here so many conflicts arise such as people keep on working some where else even after declaring retirement, most of them easily get the job on the basis of their experience but the new people in the profession have to struggle and suffer, which also puts a lot of damage on the economy. Work Cited and Other Sources Aaron H, “Retirement and Economic Behavior”, Washington, DC: Brookings institution, 1984. Boyd C, “Human Resource Management and Occupational Health and Safety”, New York: Routledge, 2003. Brewster C, Hilary H, Paul S, “Globalizing Human Resource Management”, New York: Routledge, 2004. Budhwar P, “Human Resource Management in developing Countries”, London: Routledge, 2001. Gupta, M.L, “Business led HR strategies”, New Delhi: (n.p), 1998. Martin M, “Encyclopedia of HR Development”, (n.p), 2000. Rappaport A, “Demography and Retirement”, Westport, CT: Praeger, 1993. Siegel R.L, “Employment and Human Rights”, Philadelphia: University of Pennsylvania Press, 1994. Symes V, “Unemployment in Europe”, New York: Routledge, 1995. Werther W.B, Keith D, “Human Resources and Personnel Management”, (n.p.): McGraw-Hill, 2000. Read More