Human Resource Management in Global Economy - Essay Example

Human Resource Management The role of the Human Resource Management in today's global economy is ever changing with the rapid change in competitive market environment and the realisation that Human Resource Management must play a more strategic role in the success of any business enterprise. Business organisations that do not put importance on inviting and maintaining good employees may find themselves in terrible consequences, as their business competitors may be winning over them in the tactical employment of their employees (Chan, 2004). Business organisations must be more flexible in today's increasing competitive business environment. Moreover, they should be more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the Human Resource managers have to change in order to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organisation. In order to succeed, Human Resource Management must be a business-driven function with a clear understanding of the organisation's ultimate goals and be able to influence essential decisions and policies of the organisation. Generally, the emphasis of modern day Human Resource manager is on strategic personnel preservation and skills advancement. Human Resource professionals will be coaches, counselors, mentors, and succession planners to help motivate organisation's members and their loyalty. The Human Resource manager will also promote and fight for values, ethics, beliefs, and spirituality within their organisations, especially in the management of workplace diversity (Chan, 2004). Business organisations today have a clear and accelerating tendency toward downsizing that is the slow and methodical dismantling of an area - its redefinition and decentralization in the direction of the other areas of the company. Human Resource Management is not an exception on this trend. Human Resource Management is also slowly being reorganized and concentrated to its fundamental function. As this department is condensed, top-level Human Resource managers are also altering their competencies drastically, or are simply vanishing from sight. The strong trend toward flattening the organisation, reducing hierarchy, decentralising decision-making, debureaucratisation, deregulation, separation into strategic business units, continuous quality improvement programs, reengineering, and other trends in contemporary administration are accompanied by equivalent changes in people management (Chiavenato, 2001). HRM departments are on their way out The Human resource management department is on its way out. The concept of "human resource management" is being replaced by a new term that is garnering greater reception, namely 'people management.' 'Managing people is progressively more becoming the accountability of the middle management. Employees are now considered as human beings, not simply organisational resources or assets. Their activities and individual differences are being understood and respected, because they are gifted with unique personalities and intelligence, and differentiated aptitudes, knowledge and abilities. To the extreme, some more advanced organisations do not even talk about managing people, because this concept could imply that people are simply passive agents who depend on decisions from higher levels, rather Human Resource managers talk about managing with people, making employees more of business partners than alien entity separate from the organisation. This whole new concept means that workers from all levels of the organisation are considered responsible for, as well as involved in the organisation's business (Chiavenato, 2001). Computerisation of HRM functions In order to reduce the manual workload of Human Resource Department's repetitive administrative activities, organisations began to electronically automate many of these processes by introducing innovative HRMS (Human Resource Management Systems/HCM technology. However, due to complexity in programming, capabilities and limited technical resources, Human Resource managers are relying more on internal or external information technology professionals to build up and sustain their Human Resource Management Systems (HRMS). Typically, HRMS/HCM technology replaces the four core Human Resource activities by streamlining them electronically; 1) payroll, 2) time and labour management, 3) benefit administration and 4) HR management. Whilst using the internet or corporate intranet as a communication and workflow vehicle, the HRMS/HCM technology can convert these into web-based HRMS components of the ERP system and permit to reduce transaction costs, leading to greater Human Resource and organisational efficiency. Through employee or manager self-service (ESS or MSS), HR activities move away from paper based processes to using self-service functionalities for the advantage of the employees, managers and Human Resource managers alike. Costly and time consuming HR administrative tasks, such as travel reimbursement, personnel data change, benefits enrolment, enrolment in training classes (employee side) and to instruct a personnel action, authorise access to information for employees (manager's side) are being individually handled and permit to reduce Human Resource transaction time, leading to Human Resource and organisational efficiency. Eventually, Human Resource managers can spend fewer workers in managing administrative HR activities and can apply freed time and resources to concentrate on strategic Human Resource issues, which lead to business creativity innovation, which is essential for today's business survival (Human resource management system, 2006). Human resource management information systems can be expensive, however if human resource management practises are not implemented and maintained properly by the organisation, then it can have an unhelpful effect on staff. Today's organisations have learnt from other change initiatives and have invested wisely in human resource management training and supporting assessment and information management systems to underpin human resource management processes (Human Resource Management contribution to the business, n.d.). HRM functions can be distributed to other departments The conventional compartmentalisation of labour with its resulting disintegration of activity is developing toward more diverse and incorporated work. Compartmentalisation is evolving toward a more systematic holistic vision that is more unified rather than separate (Chiavenato, 2001). The old departmental firm structure is being replaced by more flexible entities responsible for processes focused on customers and internal users. The functional organisation is vanishing, and a network organised by process-based teams is taking its place. Instead of being a separate unit or department, Human Resource Management is being incorporated into business processes or subsystems. This is an evolution from a function-oriented to a process-oriented culture, from an organisation that offers services (where the internal customers are always right) to a concern for the organisation's final goals. This will change the nature of the firm department from an implementing organisation to an internal advisory team. Instead of its usual functions (hiring, training, conducting performance evaluations, assigning salary raises, etc.), Human Resource Management is fast becoming responsible for teaching managers and their teams to perform these tasks. In other words, Human Resource Management is teaching workers how to bake rather feeding them with bread (Chiavenato, 2001). HRM functions can be handed over to line-managers The concept of human resource management may seem simple but its realisation is not straightforward. There is a considerable debate about its role and who has prime functional responsibility. Some would argue that human resource management should remain the domain of central professional people. Others would argue that human resource management is best vested in line management for it is they that have responsibility to utilise people to deliver the business targets (Human Resource Management contribution to the business, n.d.). The biggest difference human resource management of today differ with the personnel practices of the past is the transfer in responsibilities with more and more line managers being given the Human Resource Management responsibility for taking care of their employees needs (Human Resource Management contribution to the business, n.d.). There is remarkable trend for certain activities that were previously centered exclusively on Human Resource Management, such as selection, training, performance evaluation and pay, to be delegated to Line managers (Chiavenato, 2001). People management is a strategic activity, therefore, it is important that it be centralised and entrusted to a single department. Managers from various areas are becoming managers of people, and they are gaining full autonomy to make decisions and take action with respect to their subordinates. Managers are slowly given power to act as managers of their own workers. They are becoming multipliers of the process of preparing and developing people; therefore, managerial training has become thorough and constant. This means a profound commitment by upper management to trust middle management with safeguarding new non-technical skills, which are basically conceptual and interpersonal components of everyday managerial behaviour. Managers are then able to demonstrate efficient leadership and full achievement of organisational objectives through the personal contributions of the people directly linked with the final results (Chiavenato, 2001). HRM policy matters can be a part of strategic planning process In order to deliver high organisational performance, Human Resource Management functions have to be associated to corporate strategy. The presence of a personnel director in some organisation is a good pointer that Human Resource Management decisions are now being taken into account in major corporate strategic decisions. However, it is often difficult to establish effective human resource management processes, systems, know-how and talents at local levels if the organisation is large and diversified. Yet in highly competitive environments, and rapid change, the successful management and inspiration of employees will be essential for future survival and success. Human Resource Management therefore is fast becoming an inevitable driving force, or would be if managers in turbulent environments prioritised Human Resource Management issues (Human Resource Management contribution to the business, n.d.). Human Resource Management is becoming more and more involved with strategic planning and the development of means by which people can work actively toward the attainment of goals of the organisation. This means a broader perspective focused on objectives and results. It implies personal commitment by each worker to the company's goals. The need for this personal commitment means that employee education, communication, and participation is now very important (Chiavenato, 2001). Moreover, organisations develop and emphasize an HRM philosophy to which top management is deeply committed, and which is clearly articulated and practised by all employees. Human Resource planning is intimately linked with strategic planning, so as to support the company mission and give incentives to support its achievement. HRM objectives are indicative of such organizational objectives as profit, growth, productivity, quality, change, innovation, flexibility - and especially competitiveness. Besides this, the impact of Human Resource Management processes on people and businesses is continually evaluated to provide the adjustments necessary for a world of constant change (Chiavenato, 2001). HRM functions can be outsourced The current trend in offshore outsourcing of non-core business function also threatens the existence of Human Resource Management departments. With the availability and affordability of information and communication technology, Human Resource Management functions such as employees' benefits and payroll can now be outsource to third world countries, allowing companies to take advantage of the low wages of these countries. Outsourcing is the contracting out of a company's non-core, non-revenue-producing activities to specialists. It differs from contracting in that outsourcing is a strategic management tool that involves the restructuring of an organisation around what it does best - its core competencies. Two common types of outsourcing are Information Technology (IT) outsourcing and Business Process Outsourcing (BPO). BPO includes outsourcing related to accounting, HR, benefits, payroll, and finance functions and activities (Outsourcing, n.d.) The driving factor behind this development has been the need to cut costs during the recession, whilst the enabling factor has been the global electronic network that allows digital data to be accessed and shipped instantly, from and to anywhere in the world (Offshore Outsourcing, 2006). Some of the major countries that provide such services are India (Programming and IT), Russia (Programming and R&D), Ukraine (Programming and Design), Romania (Programming and IT), the Philippines (Data Entry and Customer Support), China (Programming), and many others (Offshore Outsourcing, 2006). Conclusion The different functions of HRM maybe distributed to other departments but its main purpose remains crucial in today's organisations. For example, the penalties for not being properly staffed are very costly. Understaffing loses the business economies of scale and specialisation, orders, customers and profits. On the other hand, overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate because of modern legislation in respect of redundancy payments, consultation, minimum periods of notice, etc (Human resource management, 2005). More importantly, overstaffing reduces the competitive efficiency of the business. Staffing level planning requires that an assessment of present and future needs of the organisation be compared with present resources and future predicted resources. Therefore, the main function of Human Resource Management, thought being distributed, remains essential in bringing balance to the demand and supply of workers (Human resource management, 2005). Faced with rapid change, organisations need to develop a more focused and coherent approach to people management. In just the same way a business requires a marketing or information technology strategy it also requires a human resource or people strategy. The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop 'cultural awareness', product/ process/ organization knowledge and experience for new staff members (Human resource management, 2005). The world of Human Resource management is changing more rapidly than one could ever imagine. Constant environmental changes mean that Human Resource Managers have to face steady challenges. They must respond by taking advantage of gradual yet deep changes in the nature of people management, current practices, and overall human resource management policies, goals, and vision (Chiavenato, 2001). Therefore, Human Resource Management is breaking away from its passive and reactive approach in exchange for a more active role in strategic planning, so that it can anticipate the company's demands and needs. Human Resource management has stopped preserving the past, so that it can begin making the future. Human Resource Management is more and more interested in continually preparing the company for the organisation of the future, and preparing personnel for the future that will surely come, if it has not already done so. In the most advanced companies, Human Resource Management is moving beyond conventionality with the present and certainty in the current situation, by considering that everything can be improved beyond the standard of excellence it has already achieved. It holds that other people are not yet totally prepared and developed, that the quality of life can be improved, and that the company can achieve even better results, rather than resting peacefully on its glory (Chiavenato, 2001). Therefore role of the Human Resource manager must match the needs of the changing organisation. Successful organisations are becoming more adaptable, resilient, quick to change directions, and customer-centered. Within this environment, the Human Resource managers must learn how to manage successfully through planning, organising, leading and controlling the human resource and be well-informed of emerging trends in training and employee development (Chan, 2004), this includes distributing some of the core functions of the Human Resource Department into other departments within the organisation for the overall good of the organization itself. Reference List Boxall,P.& Purcell,J. (2003) Strategy and human resource management, palgrave macmillan. Chan, Alvin, Dr. (2004). The Challenges Of Human Resource Management WebProNews, iEntry. Retrieved Jan. 27, 2006, from http://www.webpronews.com/ ebusiness/management/wpn-36-20041228TheChallengesofHumanResource Management.html Chiavenato, Idalberto. (2001). Advances and challenges in human resource management in the new millennium, Volume 30, Issue 1. International Personnel Management Association. Retrieved Jan. 27, 2006, from http://www.fsa.ulaval.ca/personnel/vernag/REF/Textes/chiavenato.htm Human Resource Management. (2005) Accel-Team.com. Retrieved Jan. 27, 2006, from http://www.accel-team.com/human_resources/hrm_00.html Human Resource Management System. (2006). Wikimedia Foundation Inc. Retrieved Jan.27, 2006, from http://en.wikipedia.org/wiki/Human_resource_management_system Human resource management contribution to the business. (n.d.). THE HRD GROUP LTD. Retrieved Jan. 27, 2006, from http://www.thehrdgroup.com/art_hrmd2.htm Outsourcing. (2006). Automatic Data Processing, Inc. 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