Key Elements Affecting Human Resource Practice - Research Paper Example

Key Elements Affecting Human Resource Practice Contents 1. Introduction 2 2. Literature Review 2 2.1. Human Resources Management Strategies to Deal Environmental Factors 3 2.1.1. External Factors 3 2.1.2. Internal Factor 9 2.2. Strategies to Tackle environmental Factors 12 2.2.1. Training and Development 13 2.2.2. Racial Management 13 2.2.3. Awards and Certifications 14 2.2.4. Recruitment Strategies and Tactics 14 2.2.5. Compensation and Benefits 15 3. Conclusion 16 Bibliography 17 1. Introduction This paper is about the role of Human Resource Department in terms of dealing with workforce with respect to environmental factors. An efficient and effective strategy along with several other practices is to be followed by the HR Department in order to sustain competitive advantage in any organization. A common example of such practices and strategies is the noticeable diversification and flexibility in the policies of Human Resource Department of all multinational groups that has been operating in various countries. Though, the universal goal and company objectives remain common for all branches of a multinational firm, but the environment of each country differs so as the laws and principles. To illustrate the practical approach of our concern, a discussion about the Barclays Bank PLC and Glaxo Smith Kline have been added to this paper. 2. Literature Review To control and manage the workforce in terms of recruiting the right people, managing their concerns, acting as a bridge between employee needs and corporate needs and all about taking care of people come under the job description of Human Resource Department. There is a gap between the real practices and the approved strategies. A company tends to take care of vision, strategy and objectives and ensures if the real practices comply with the rules (Strategies for Human Resources, 2003). 2.1. Human Resources Management Strategies to Deal Environmental Factors Strategies act as an operating mechanism or rule for any system (Porter, 1998). Human Resource Department executes operation not only on specified policies, but it tends to cooperate with the social and personal issues or problems faced by company employees. HR is considered a symbol of peace and it encourages employees to report something unethical happening anywhere in the organization. HR aims to come up with schemes and programs not only for the betterment of an organization, but also in favor of employees. There are various factors that influence not only strategies of Human Resource Department, but also of each and every department of any organization. Below are a few aspects that influence the strategies of HR department. 2.1.1. External Factors HR activities, policies and procedures are highly influenced by the external factors of environment. Demographics, diversity, skills and qualification basically come under the external factors. Demographics include workforce characteristics based on geographical location. This includes gender, age, educational or social class, etc. Diversity refers to the differences among people. When it comes to skills and qualification, scarcity of required talent could be a biggest threat to any Human Resource Department (Cuizon, 2008). HR Department of any organization is exposed to a few external environmental factors. A few are discussed as under: Aspect of Geographical Location An international organization operates in different countries. Each country has different geographical conditions that impact the health, appearance and working conditions (Kapteyn, 1983). Budget allocation for workforce and comforting their working environment is quite necessary and essential to bring productivity (John Wiley & Sons, Inc, 2006). Income trend also varies from place to place. For example, if HR Department allocates a portion of allocated budget to the vaccination of some local and common disease of that particular area, it is not necessary that the same vaccination budget is applied to the employees of some other country. Diseases vary in each region. Climate and other geographical factors do impact facilities provided by the local HR. Besides, it is quite often that HR department may avoid giving high salaries considering other expenses. These factors do influence HR strategies and policies. Aspect of Citizenship Rights Citizens are those who are born within the premises of a country (Janoski, 1998). However, the constitution of the United States accepts even those as citizens who are born outside the United States, but whose parents hold citizenship and had resident in the US (US Legal, n.d). As far as citizen rights are concerned, these are as important as the state regulations. Citizen rights differ state to state. In Asian countries as compare to European countries, citizens do not have many rights. States put conditions on companies to take care of basic needs as per specified standard. HR Department deals in people management aspect of an organization, therefore, providing all such facilities to people (employees) come under the core objectives of Human Resource Management. HR Department plays an important role in identifying a middle point where citizens and organization both agree and both are satisfied. If any of these two is unhappy or unsatisfied, then it comes under the HR failures. State Regulations State clauses, constitutions, laws and regulations put conditions on all companies operating under its territory to comply with laws and requirements exactly as defined in the labor law, etc (Gormley, 2007). Taking an example of revised rules and regulations of Henry County of Virginia, several aspects are well specified and clearly defined as per the job classification; in classification of section 1 defines the general provisions including adoption, purposes, scope of application, amendments, compliance, availability, and forms concerning rules and regulations are clearly mentioned for the assistance. In section 2, administration aspect is discussed including vision; objectives and code of ethics of HR Departments are well specified. Responsibilities of HR Directors are basically the responsibilities of HR Department as HR Director is the one responsible for HR goal attainment. Therefore, the responsibilities of HR Director are well specified by the Henrico County of Virginia. Section 3 is about compensation plans for employees. In which, criteria behind amendments in employee compensation plans, overtime wages, on-call pay, compensatory leaves, and pay for serving in acting capacity are specified and discussed to be followed. Section 5 is about assignment categories that include changes and specifications of assignment categories are included. Section 6 includes filling of vacancies. This part is one of important parts as it states the rules and regulations about equal opportunity employer, recruitment / promotion procedures, Director responsibility towards hiring or other advancement areas, rules for seasonal or daily-wages workers, job sharing criteria, rules for emergency and provisional recruitment and higher education requirements, etc. section 7 specifies rules and regulations for working hours, holidays (vary state to state). Section 8 tells about allowed leaves and absenteeism. This is to ensure if an organization is taking citizens carelessly by penalizing them for casual absenteeism. Section 9 is about training and development. These clauses show that the HR Departments are pressurized from different aspects to be fair enough. Section 10 illustrates rules of releasing employees if they resign. This is predefined as in most of the cases; organizations tend to create obstacles for employees to penalize them in result of their resignations. Laws bind an organization not to torture or penalize a leaving worker. However, if the organization needs to clear some genuine financial settlement like staff loan or advance pay, then company may not release until all matters get settled. Section 11 defines rules of maintaining personal information of employees so that to refer when needed. These days, a new recruit is asked to even provide references that are not blood relative. This is done for the safe side. Proper past record with proof and evidence ensure if an employee is a responsible citizen and is not involved in any criminal activity. Section 12 is not applicable to all firms as it is about Part-time. Section 13 is about the set of rules regarding employee appraisals, etc. Section 14 states about employee relations. Section 15 refers to employee health. This is another important clause that every HR departments is restricted to follow. Health insurances that mostly cover complete family are considered the most common and important. However, these sections are not just for the employees. It is taken as one of the most important rule and regulation to not appoint people who are unfortunately suffering from diseases like AIDs, etc. Smoking is also prohibited at working place as it is injurious to health and may others get affected or disturbed. Section 16 is about the normal transactions of HR Department that include salary pay time, payroll deduction, etc. Regulations of each state may differ in a few points, but HR Departments of all organizations must comply with the state laws or else legal prosecution may be executed against them (Henrico County of Viirginia, 2009). Educational Compatibility Cultural values impact educational standard of any country (Woolfolk, 2004). All organizations set some standards and criteria for each position launched. A firm that operates globally may not come across qualified professionals in a few backward countries where education is not up to the standard or where literacy level is not as required by the global HR. On the other hand, launch in that country could be profitable. Taking an example of Barclays Bank PLC, in July 2008, Barclays began its operations in Pakistan (Barclays, 2008). Pakistan is one of the third world countries with low literacy rate. According to UNICEF, literacy rate of Pakistan in between 2003-2008 was 55% (Unite for Children, 2009). However, the banking industry of Pakistan in 2006 and 2007 was progressing well. People were not in to property and the trend of putting money at good rates in banks was so common that with a couple of other banks, Barclays also entered the banking industry of Pakistan. The task of hiring cream people at good salaries was assigned to the HR of Barclays Pakistan. This did not go that well and caused big losses. HR appointed numerous people at good salaries, but all end in smoke after the fall of consumer side of the banking industry of Pakistan. Just after two years of its official launch, as the consumer completely closed, more than 200 permanent employees were fired. Rest was asked to find jobs for themselves. Still countless team members including the Managing Director, Mohsin Nathani who joined Barclays before its launch, have left Barclays. HR hired a huge force in 2008 and even top tier executives of emerging market and the CEO of Barclays group resigned. Coming back to the huge force hired in Pakistan, HR Department faced a big failure in people management and lapsed in just two years. Barclays has not officially closed in Pakistan, but internal structure is weak these days. For the failure of Barclays Pakistan, some experts blame the consumer market that lapsed unexpectedly, but many experts blamed the HR team for failing in hiring efficient workforce and also failing in actually retaining and managing them. Some analysts say that in 2008, Barclays HR had to hire thousands of employees from scratch, while they could not find required number of efficient workers. Market was so limited that they had to attract the permanent staff of other multinational banks to join Barclays Pakistan. However, it also did not work that well. Religious, Social and Cultural Factors An international organization operates in different countries with identical religious, social and cultural values that reflect in their behavior (Fleener & Cargas, 1970). In some countries, environment is liberal while in some states, it is found conservative. An international organization that operates in numerous countries encourage workplace environment to comply with the local environment. Taking an example of religious values, in most of the Muslim states, ladies are not allowed to wear short dresses like western countries. Their media and local environment both reflect the same. Alcoholic drinks are not allowed to be used or sold openly. In fasting months, restaurants are forced to be closed until evening so that a person who is fasting does not feel to eat. These traditions are totally opposite in western countries. However, when a multinational plans to enter geographical boundaries of such states, they are bound to follow the local environment allowed or permitted by the state and people. HR is responsible to ensure that the environment is not violated in terms of religion, society or culture. Use of alcoholic drinks in parties or functions in such countries should be taken special care of. Environment affects up to the level that HR issues half day timing schedule for the fasting month Ramadan in Muslim states. In all the countries, holidays and vacation are planned and executed identically. For example, Independence Day of one country can only be a holiday for that specific country and not for the entire world. However, there are a few global celebrations like Labor Day, Christmas which are celebrated internationally. 2.1.2. Internal Factor Internal factors of environment are those which are from organizational side itself. It could be any aspect that influences the HR Department of any organization including policies, internal environment and other internal factors. A few of such factor are discussed below. Organizational Universal Human Resource Policies and Benefits Every organization has some norms and policies, multinational organizations tend to take care of their employees more than other companies in order to prove that they are socially grown up. This could be a source of company’s goodwill. Taking an example of Glaxo Smith Kline, the most common strategy of centralized Human Resource Department of Glaxo Smith Kline and Barclays is to ensure effective communication in all the countries these companies operate. Centralized HR Departments of both the companies have designed a web based portal to communicate directly with the employees by the mean of surveys, etc. The employees are asked to fill out these surveys without concerning the local HR Department or their bosses so that employees submit unbiased comments and suggestions. Names are kept confidential, but receiving numerous responses indicating the same issue helps the centralized HR Department to take proper action. In most of the cases, employees are asked via survey to indicate if their HRD is unbiased and take the HR tasks seriously. These practices and strategies help a lot fixing many issues and problems. A few companies which globally operate take special care of their employees worldwide. A local HR faces pressure from centralized HR as well. Aspect of Criticality of Various Departments A few departments are risky and critical. The environmental risks include life risk, health risk or any other major risk. Like the air crew including pilot and air hostess have are more in to risk as they frequently travel than normal people. People mostly avoid such jobs. But, HR Departments of airlines encourage these jobs by compensating them well with good salaries, highlighting travelling various countries charm, offering discounts and free tickets for other family members. On the other hand, taking an example of steel mills, people who work in steel manufacturing areas are insured expensively than other employees due to the risk associated with their lives or health. Engineers who work in oil refineries mostly located in the deserts are well compensated because they compromise their social needs. However, this sacrifice is also an influence on HR. Army militants, naval officers and air force soldiers are not paid that highly, but are motivated by another tactic of respect as they are called national heroes. The core objective of Human Resource Department is to motivate employees by any mean for the mutual benefits. To attain such goals, HR Department plays with Maslow need of hierarchy. Someone whose job dignity is compromising is compensated with money. While, where money is compensated, he can be motivated by self-esteem or dignity. It has been observed that people love to work at placed even at comparatively lesser pay where they are given meal and accommodation. Meal is taken as the basic and effective driver of motivation. This is what the Maslow need of hierarchy teaches. These factors do influence HR strategies. Universal and Ethical Leniency Aspect of Human Resource Itself Human Resource is the symbol of peace and love. When you, being an employee have some problem, you may go to HR to discuss. Thousands of books, articles, journals are full with such info. HR is the soft and human part of any organization. This concept and image influences HR to respond in the most lenient way to prove that they care. Corporate Culture and Organizational Structure Corporate culture of an organization should promote high-performance culture (Blessing White, 2008). Such culture ensures flexibility, growth, staff assurance and interest. Organization Structure holds the frame of a company. It defines the required flow of power and also illustrate headcount requirement (NPD, n.d). Interpersonal Aspect to Respond to Undefined Situations That Vary Case to Case Mixture of all above aspects provides a real time environmental HR strategy that involves two sides of approaches, the theoretical and the practical approaches. The ratio of theoretical approach and the practical approach is estimated as 30:70. Taking an example of HRD of Barclays bank, they follow universal system and strategies implemented by Bank. Same is the case with Glaxo Smith Kline (GSK). Glaxo Smith Kline tends to be more globally synchronized than Barclays bank. All their HR issues are filed properly and are maintained and followed globally. GSK is one of those companies that strictly follow universal strategies and procedures. For example, even if an officer of Asian site is having some problem with his scanner or printer, he is asked to go to the online portal to raise a ticket. I would like to disclose here that even the IT Helpdesk department is responsible to receive calls or web based raised queries and then to acknowledge the user on phone, email or chat. Ideally, international organizations have local IT department for local sites to serve properly. GSK is among those who strictly follow strategies. Coming back to the example, on raising a ticket by an Asian officer, the ticket automatically is sent to the IT department of head office in the UK, who acknowledges the Asian officer and tries to resolve the problem over phone. In case IT Helpdesk Officer from the head office feels the need of physical visit by an IT professional, then the ticket is directed to the local IT officer who further resolve the issue and close the ticket. Same goes to HR procedures. Online surveys of GSK are raised from head office HR and are sent to all GSK employees worldwide. This is quite essential as sometimes, local HR might go personal with any of the employee. This global HR activity allows all GSK employees to share their views over the web portal without any fear. This can prevent employees from environmental HR threat and can bring good results. This way, local HR does not really feel to take unnecessary advantages of their positions. 2.2. Strategies to Tackle environmental Factors To tackle environmental issues like a few discussed above, practices of SHRM play an important role (Entrepreneur, 1993). SHRM refers the Society of Human Resource Management. Strategy is like the structure of an organization that firmly holds it (Miller, 2007, pp.347 - 361). 2.2.1. Training and Development In the nurturing environment, the HR Department creates opportunities and training sessions as knowledge and learning can reduce all the gaps between environment and organizational goals. Human Resource Management is all about bringing effectiveness to organizational output (Naukrihub, n.d). Enhancing productivity is only possible when employees are efficient. An educated professional can be made more efficient if he receives proper training. Training session helps an employee to interact in a better way and work more efficiently and effectively. In all multinational organizations, a proper amount from the overall budget is allocated to the training and development of employees. After realizing training need of each department, Human Resource Department allocates training headcounts for each department. Mostly, departments are asked to explain the reason justifying the nominations. The decision to implement time to time training sessions helps in changing company’s fortune. However, there is a cost associated to training campaigns. Therefore, there is a need of approving genuine nomination. For example, approving an employee’s nomination for an advance course of Information Technology does not make sense or vice versa. 2.2.2. Racial Management Workplace diversity impacts a lot on different areas of an organization. Usually, HR designs programs and execute campaigns to improve corporate culture by all possible mean. Different people from various backgrounds form corporate culture in any organization. HR Departments follow and implement unbiased strategies and policies to deal with all employees equally. 2.2.3. Awards and Certifications This is human nature that he gets de-motivated very soon and his productivity lapses. This factor is natural so no one can be blamed for this. Human Resource Managers understand this environmental factor very well and it influences their strategies quite significantly. This is the reason that HR Departments have begun to organize award ceremonies quite frequently. This way, employees get charged and tend to seek awards by performing within their responsibilities. Awards cannot only be given for best performance, but can also be awarded for being regular to work. Different awards and certifications can no doubt help in bringing good results. 2.2.4. Recruitment Strategies and Tactics Recruitment strategies are quite sensitive as recruiting a wrong person may create problems and loss for an organization. In most of the cases, department managers interview and finalize candidates for their departments, but they are directed to the HR department for final decision. HR Department is liable for this responsibility. To perform this task carefully, HR department follows proper procedures. They not only initiate the hiring procedure, but also finalize the decision. If HR is not satisfied with any candidate, no matter how useful he could be, he cannot become a part of organization. HR sets strategies to ensure right candidates are selected. In all general cases of multinational companies like Glaxo Smith Kline or Barclays Bank PLC, HR departments review and approve headcounts for each department. Then, if HRD finds any need of new recruit, a vacancy is approved and published either in newspapers, internal portal or company’s official website. HR Departments of multinational companies publish internal job postings on intranet portal to encourage job rotation and job satisfaction among employees. Glaxo Smith Kline and Barclays follow the same procedure. This way, all employees of such companies from different environments and countries browse active vacancies and apply accordingly. This strategy is quite helpful in encouraging workplace diversity that plays an important role in promoting and enhancing corporate culture. People from different environment work together and this ultimately impacts positively on their minds. They learn to live among people from different races. This, gradually, brings positive results and contributes in overall performance of an organization. 2.2.5. Compensation and Benefits All global and local policies influence HR Department to execute proper compensation and benefit campaigns so that to take care of employees in the best possible way. Compensation encourages employees to take ownership in their organizations (McNamar, 2008). Compensation in earlier days was considered the salary or wage of one’s services. However, these days, the term “compensation” refers to some financial benefit additional to the basic salary. Compensation could be given for any additional work or services, etc (HR Policies & Employment Legislation , n.d). The environmental trend of compensation has become a fashion sign for multinational companies. For the Human Resource Department of any company, it has been a challenge to have proper compensation programs to survive in the market. HR department is truly influenced by this factor. However, they tend to manage in the best possible way to manage in limited budget while looking at all such sides. 3. Conclusion Human Resource of any organization has been facing a lot of pressures, challenges and influences by the mean of several environmental factors and aspects. Such factors could either be internal or external. Internal factors are all about a company’s policies and principles or any other internal factor that could influence the practices and strategies of its Human Resource Department. However, external environmental factors also influence a lot on HR strategies. These may include state policies, global laws (for example, labor law), local customs / tradition, religion, weather, local ethical values and so on happening in the area where an organization is located. Such factors do influence people. And, an organization is made up of people while the Human Resource Management is all about managing employees working in an organization. To deal with people, HR Department must bring flexibility in its practices and strategies. To cope up with environmental challenges, HR should find out some middle way to compensate and motivates company’s employees in such a way that organization also does not face any loss. HR Department these days execute motivational strategies by launching compensation plans, award functions, prizes, good pays, regularity bonuses and similar other benefits to encourage and motivate staff. Bibliography Barclays, 2008. Barclays in Pakistan. 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