Human Resource Management - Essay Example

9th August 2017

Introduction

Human Resource Management refers to the formal system that is adopted in managing people within an organization. Human Resource Managers undertake three major responsibilities that are all focused on improving the productivity of an organization. These include staffing, creating employee compensation plan and designing employee work. Basically, the key purpose of Human Resource Management is optimizing the effectiveness of the employees thus enhancing the productivity of an organization. Human Resource Management is also essential since it helps in acquiring, developing and retaining talents as well as aligning the workforce with the mission of an organization. In the 20th century, researchers advocated for the use of strategic management of workforce in improving business value which later led to the human resource (Susana Fernández-Pérez et al, 2014). Initially human resource emphasized on transactional work including benefits and payroll. However, as the result of globalization, research and technological advancement, the contemporary human resource focuses on acquisition and mergers, diversity, talent management, inclusion and succession planning. The primary duty of human resource professionals is to plan the human capital of a firm and establish policies and processes that will ensure maximum benefits are derived from the workforce.

This paper aims at comparing the human resources management of China with that of the United States and to discuss the evolution from Human Resources Management to the Strategic Human Resource Management (SHRM) from a global or international perspective. Additionally, the paper will discuss how the new shift in SHRM in the areas of competitive advantage and how it will change the focus in the 21st century and beyond.

Comparison of Human resources management of China with that of United States

The market-orientation economy is one of the major factors that have generated benefits and institutional changes in China. As compared to the US which favour centralized planning economy, China favour market-orientation economy. One of the key factors that have positively impacted on the US and China economies is technological innovation that has led into productivity gains. As the result of US economic expansion, there has been labor shortage which has triggered organization to adopt creative recruitment and retention strategies. In addition, the US based organizations have embarked on hiring workforce from non-traditional source thus resulting to a more diverse workforce. On the other hand, China has very high population, making the country to have significant supply of labor. As mentioned earlier, human resources managers play a primary role of staffing. This implies that without proper recruitment plans, firms can acquire workers who are not only skilled but also who are not able to align their goals with those of their organization. The major aspect that makes United States to have productive workforce is effective recruitment. The US organizations apply Western-technique corporate culture, which aims at creating a two-ways communication between managers and employees, consequently improving level of motivation among the workers.

One of the major impacts of market-orientation economy is that it enhances resources allocation thus improving productivity. Contrary to the US which adopts policies that are outlined by the federal government and Occupational Employment and Wages, China uses opening policy that was initiated in 1978. Through this policy, the country has maintained a competitive cost of labor force. China adopts the ownership of human resources which is contrary the American organizations which values diversity.

China human resources benefits are based on the quality and quantity, contrary to the US where public and private sector values the quality of the workforce. With a population of more than 1.3 billion, the quantity aspect of the labor force in cannot be overlooked. Despite having more than 750 million employees, China has not maintained strong workers union thus making its labor force to be competitive. China is also faced with the problem of high human costs which is not significantly experienced in the American market. Additionally, workers experience high social security cost which contributes to low level of motivation among the workers. Chinese based organizations have adopted the familial-type community while the US firms apples Western-technique corporate culture. The technique that is applied by Chinese firms is thus in most cases only allowing a one way communication between management and workforce leading to low motivation among the workers.

The pay setting is also a key aspect that makes the US human resources to remain productive. The president or the congress is responsible for setting the base salaries while agents set the bonuses. The key factors that determines the base salaries of employees in the public sector include educational qualification, job content, ministry, age, performance, job position and relevant experience. In the private sector, organizations are guided by the Occupational Employment and Wages which is under the United States Department of Labor. Human resources managers under various industries are provided with a guideline that indicates the hourly mean wage and annual mean wage. The wages are competitive as compared to other countries, an aspect that makes the US labor force to remain motivated and quite productive.

Employees’ promotions are more leaned towards qualifications rather than performance appraisals. Through the use of transparent listings, all employees can apply for promotion, which is then reviewed by HR department leading to shortlisting the candidates. The promotion is also undertaken by selection panels. Another vital point to note is that most of the firms apply performance assessment. In the public sector, performance assessment must be done for all employees and is done by supervisors after every six months. The criteria applied in assessment include the level output, interpersonal skills and individual competency. Assessment is important in that it provides an opportunity for higher remuneration and career development. Performance-related pay is a major strategy that is applied by significant number of American based organizations.

China based organizations use similar United States processes and approaches of selection, hiring, training and promotion. However, China has less diversity in its workforce since it prefers in internal workforce. On other hand, the US companies employ individuals from different countries based on the cultural diversification in the country.

The evolution from Human Resource Management to the Strategic Human Resource Management (SHRM)

Prior to the tradition human resources management, organizations were using the Personnel Management technique which arose out of the need to meet the government regulations. The key areas of concern was keeping of employees record, adhering to laid down policies while undertaking HR activities including recruitment, training, promotion and remuneration administration. It also covered welfare strategies that were focused on improving the lives of the workers for example medical care, housing facilities, education and vaccinations. Personnel Management was also concerned with increasing productivity through training the employees as a way of enhancing their skills and following standards that were achieved out of the scientific research spearheaded by Frederick Taylor among other management professionals. In the 20th century, organizations were faced with various industrial disputes as workers demanded their rights and higher salaries (Jackson et al, 2011). In this regard, Personnel Management used trade unions to solve such disputes in addition to collective bargaining that involved agreements between the employees and top managers. Additionally, this management approach embarked on conducting performance appraisals that were primarily applied to determine performance and create the optimal pay and promote the workers.

The success of any business is determined by the relationship between the employees and management. On its part, the Personnel Management technique aimed at convincing the workers about the interest of the organization while at the same time it convinced the management about the social obligations and interest of the employees. One of the notable aspects of the Personnel Management is that it was not concerned about the operations of an organization but it only got involved about the issues that affected the workforce.

The Traditional Human Resources Approach

At the end of 20th century, organizations started to adopt other management strategies that were dedicated on business operations as well as well as employees. Thus, the wind of change was experienced in areas that were initially being under Personnel Management. One of the main issues that emanated during the use of the traditional human resource approach were the studies that were done by Elton Mayo, which argued that non-monetary factors played a significant role in improving productivity. As the result, new management theories originated from this argument for instance, the McGregor’s Theory Y and Theory X. In addition, Abraham Maslow developed the theory of hierarchy of needs that recognized the fact that individuals aim at achieving self-actualization. Other notable theories were ERG Theory and Expectation Theory that was developed by Victor Vroom. As compared to the strategies that were initiated during Personnel Management approach when workers were denied their rights by managers, in the traditional HR approach, government interventions used to ensure that organization took into consideration the rights of the workers.

The Traditional Human Resources Approach was dynamic and it avoided the administrative aspect of Personnel Management. The new technique of managing human was better since it treated employees as valuable resources that required to be involved in all organization decisions. While the Personnel Management considered the workers as just individuals who were used to increase the organizations’ profits, the traditional approach argued that employees required not just to be provided with necessary support and training but also to be consulted when managers needed to make some important decisions. During the Personnel Management approach, employees were supposed to apply the regulation as required by the management and the latter were not obliged to follow such regulations. However, the traditional human resource approach was more of a management function and it was concerned with primary business activities.

The change in approach that was used in the Human Resource Management was different from Personnel Management in six key areas. First, employees became more committed and were loyal towards the organization due to the improved recruitment process, efforts by managers to increase workers skills and introduction of social welfare initiatives that were focused on enhancing the performance of employees. Secondly, besides monetary inducements, motivation was approached in a different manner. For example, organization could give the workers free holidays, fringe benefits and gifts. Thirdly, training and development was emphasized on. The employees were provided with opportunities to train and improve their work related competencies in addition to behavioural training that was geared towards changing employees’ attitudes. Fourthly, organizations introduced performance related remuneration, thus making a major change in the administration of wages and salaries. Fifthly, leadership was more accentuated since it guided the entire management process. Apart from being managers, individuals were trained on how to lead others and make the workers achieve leadership skills. Sixthly, new appraisal approaches were adopted with the objective of improving the performance of the employees. For instance, management by objectives, the report card and 360 degree appraisal methods were applied by firms.

The Strategic Human Resource Approach

At the end of 20th century, Human Resources Management changed as the result of various forces in the international market. Notably, the improved technology, stiff competition in the global market and expansion of industries made human resources to be highly recognized. The Strategic Human Resource Approach required organizations to make human resources to be an important function of their operations. While the personnel management and human resources approaches viewed workers as resources, the new approach treated employees as assets and played an important role in helping the firms to achieve a competitive edge. Another feature of the Strategic Human Resource Approach was that it connected corporate objectives with individual’s objectives, an essential move to achieve a participative management.

Evolution from human resources management to Strategic Human Resource Approach had positive impact on five major ways. First, long term employment was replaced with short term engagement which depended on the performance of the employees. This means that this approach is more linked to performance and quality instead of duration of working. Secondly, the new approach associated the profitability of an organization to the compensation of workers. Thus, when a firm makes higher profits, this should be reflected on employees’ compensation and other benefits. Thirdly, Strategic Human Resource Approach stressed on creativity and innovation which can only be achieved if extensive training and development strategies are adopted. Fourthly, the approach emphasized on improving work experience for instance by mentoring the workers, providing them with leadership and creating team work. In this way, workers become motivated and are able to achieve their goals. Fifthly, Strategic Human Resource Approach noted that employees have different talents and if such talents are effectively natured, they can lead to increased profitability. This led to replacement of performance appraisals which were used by other techniques.

Strategic Human Resource key elements

As they undertake their operations at the global level, organizations should apply the concept of Strategic International Human Resource Management. This is based on its key elements that were not valued by earlier approaches. First, it identified dynamics of international labor market. The forces of competition among firms and wage rates are key factors that determine the employees that firms hire and retain. Secondly, it considers long range focus of an organization. While it is vital for an organization to adjust as per the surrounding environment, it is not always easy to change the strategy. Thirdly, it allows integration of human resources with corporate strategy. Human resources managers are supposed to participate in planning of global issues thus creating goals that are aligned with their organization’s corporate objectives. The fourth element of Strategic Human Resource Approach is that it allows firms to make choices and decisions regarding human resources, thus guide them towards particular direction.

New shift in SHRM in the areas of competitive advantage

Globalization has led to stiff competition as organizations are now focused on outdoing their competitors in the international market. In the contemporary management filed, Strategic Human Resource Management has become one of the strategies that can make firms to achieve a competitive advantage. The core objective of SHRM is to attain high performance among the workers and improve the management of human capital. The new shift in SHRM has seen corporates making strategic decisions that are focused on achieving a strong organizational culture, improve innovation, maintain productive workforce and achieve a competitive advantage.

SHRM has now added leadership in its core strengths. The organizations in the 21st century have realized that employees make significant contribution in their development and profitability. While managers must continue to develop their management skills, they must help the employees to learn new skills especially in the area of leadership. For a firm to achieve competitive advantage, they must enhance the performance of their workforce through continued learning. It is vital to note that in the current competitive environment, the success of an organization depends on the competency of human resources. Such competency can be achieved through providing them with important skills such as communication skills, team building skills, leadership skills, technical skills and planning skills. The major goal of Human Resource Management is to achieve optimal results from the human resources. Human resources can now be optimized by learning as mentioned and by using proper selection methods, appraisal and rewards. Selection will ensure that organization achieves employees with adequate capabilities and by initiating effective appraisal systems and rewarding them; they will remain committed and royal, thus making their organization to achieve a competitive advantage in the global market.

How SHRM will change the focus in the 21st century and beyond

In the 21st century and beyond, SHRM will change the focus in various ways. As firms embark on improving their HR function, there will be increased centrality of employees to the success of their organizations. The evolution of HRM has been characterised by the way human resources contributes to the success of their organization. If this trend continues, resources centred views of entities will make them to value social and intellectual capital. This will ultimately make training of workforce a necessity and not just an option. Global competition will now be determined by integrated solutions that organizations will establish. As noted in the evolution of HR, there has been systematic ways through which issues like hiring, appraisal, rewarding and employee participation have occurred. With the proactive role that SHRM is playing in the global market, most organizations will not come up with integrated and innovative systems to manage their own human resources. This will ultimately increase the cost of hiring employees from other organizations due to the value that the employers will be placing on them.

The focus will also be towards alignment and impact. Human resource in the 21st century is based on the output and their connection with the organizational goals. As companies expand their global activities, they will need employees who can work on different areas and who can make resourceful and strategic decisions. This will mean that SHRM will make the employee and employers to be closer, making HR capacity to be stronger. In future, organizations will become agile and flexible to deal with the competitive environment (Harvey & Novicevic, 2003). The unpredictable environment will require that HR assets be given adequate training and education that will make them to make a contribution on the organizational strategies.

Shifts in SHRM using Social Media

In the current business world, social media has become a mainstream and cannot be overlooked. For HR managers, social media acts as the connection between them and the potential employees. Managers can use social media in two crucial ways. First, they can use it while recruiting workers basically by advertising the vacant jobs. Secondly, they can refer to social media to establish the qualification of the potential workers. Since employers want a large pool of potential employees and then select the best workers, smart employers can expand their cast using social media for example face book. The employees’ participation can also be achieved through social media. For example, once a certain benefit is introduced in an organization, employees can be required to give their feedback and provide suggestions to the management team.

The use of smartphones will grow in future. Thus, HR professionals can use this opportunity to target smartphone users for instance when creating career websites. On their part, employees can use social media to communicate with the potential employer, thus reducing paper work and getting the results of their interviews on a timely manner.

Conclusion

The HR evolution that was experienced was based on the need by organization to apply strategic management in the workplace. As noted in the paper, globalization, technology development and research and development have greatly impacted on the development of human resource strategies. The US economic growth has not only been achieved through effective leadership and use of available resources, but also by adopting effective human resources management strategies. The US human resources managers have put great value on effective management of virtual organizations thus applying proper systems of planning the country’s workforce. HR managers play a prime role in organizing human resources. Notably, through effective selection and recruitment, the United States has maintained a productive and motivated workforce. US favour centralized planning economy. Additionally, the US based organizations use Western-technique corporate culture, which ultimately results in a two-way communication. This means that employees and employers associate very closely, an aspect that makes the former to be motivated.

On the other hand, China, which favours market-orientation economy, adopts the ownership of human resources as outlaid by the opening policy which was established in 1978. China also uses quality and quantity to evaluate its workforce. This is based on the fact that the country has high population, thereby exposing the employers to wide pool of potential employers. The country also has productive and skilled workforce.

Before the application of the tradition human resources management, organizations applied Personnel Management approach. This approach was mostly focused on laws that government have put in place to regulate human resources. These included regulations that were related to recruitment, training, promotion and remuneration. Personnel Management approach later evolved into the traditional human resources approach, which brought about major changes in employees management and business operations. It is during the traditional approach that a number of theories were created. These included Theory Y and Theory X, theory of hierarchy of needs, ERG Theory and Expectation Theory. The traditional human resources approach evolved into Strategic Human Resource Approach. This approach came about due to improved technology stiff competition in global market and industrialization. In the 21st century, SHRM will bring about chief changes. These changes will arise due to the emerging Human Resource Management challenges as well as the improved technology. For example, as indicated in the paper, SHRM will shift to use of social media in recruiting the employees and communication with the successful and unsuccessful candidates.