The Changing Trends of Human Resource Management - Essay Example

The Changing Trends of Human Resource Management Introduction Business organisations are witnessing rapid changes in its multi-factor environment. These changes not only leave opportunities but pose threats as well to the organisations in general and various departments in particular. The changes in the external environment necessitate Human Resource (HR) practices to prepare employees meet challenges of a knowledge-based economy and to respond to the dynamics of the work environment with technological skills and high level of thinking skills. As a result of continuing competitive pressure in the global marketplace, organizations are cost-cutting, restructuring, re-engineering and right-sizing. All these efforts are aimed at making organizations more competitive and yet these activities have one profound effect on organizational life. Human resource managers are being asked (told) to do more with fewer people. This organizational mandate places tremendous pressure on HR professionals and business leaders. It is a real challenge to maintain performance, quality and customer service with fewer people. It is the equivalent of a symphony orchestra conductor being asked to make better sounding music with fewer percussionists and smaller string, woodwind and brass sections. A tough job indeed and it is being further compounded by a shortage of skilled and motivated workers in nearly every segment of the world labour market. The present essay is an attempt to examine and discuss today’s organizations that face a range of people management challenges. The Changing Role and HR Effectiveness To achieve organizational excellence and showcase effectiveness in the modern changing business environment, a roadmap to HR transformation is required. Generally HR department is not looked at as a revenue generating model unless it takes up recruitment consultancy services and delivery of outsourced HR services. It has to understand the prevailing lacunae, have a vision, build a model, validate and implement the delivery approach to make itself a revenue model. More reasonably its HR department has transactional, functional specialization and business strategy units. The focus of HR is to work better, faster and cheaper. Recruiting benefits, administration, training, performance management and record maintenance fall under the transactional services. The crucial strategic planning, knowledge management, career and organizational development fall under the business strategy mode. HR will now tend to have a dual approach of employee-oriented and customer-oriented focus. Many large companies across the world continue to club HR activities with administration and project a dual role atmosphere which would hamper the sensitiveness of handling the employees (Pawan 2004). The toggle switch many a time goes inefficient owing to the mix up of personnel like company staff, housekeeping vendors and pantry helpers who may or may not be treated alike in the eyes of the HR cum Admin manager. Deployment of human assets for a given purpose has to be driven by a business strategy and cannot dwell with the administration of infrastructure, facilities or house-keeping. The dual employment role can go only within the domain functions of the key result areas. Any cut down in pay from conservative approach can lead to retrograde. This may be acceptable for small and medium-sized companies. When innovations happen, HR has to be a change agent to moot employees to adapt to the new system of technology. The Outcome of Innovation and Factors of Inhibition Many HR innovations are happening at theoretical and practical level across the world. Some companies in the third world may be totally new to these concepts as they have little or no scope of viability to research exploration and application. When third-party staff members work along with the company staff, disparity should not arise and they may expect the same employee relations with them also. It is always easy to recruit than to retain. If the compensation and benefits are not to the standard, oops, recruitment can never happen at all. So HR needs to focus on talent management, retention, recruitment and employee engagement. These are all positive outcomes of a successful innovation program. When working in teams, many creative ideas spring out and do wonders. For HR people, innovation doesnt mean new explorations in generating statistical and analytical reports or charts for Human Resource Information System (HRIS), but dwells more on recruiting people with innovative and creative skills. Though at the time of interview, evaluating the creativity is difficult for a HR, it has to be a subjective rating done by the technical head. Proper survey has to be conducted by the HR team to monitor the market levels of compensation for highly innovative people. Without adequate recognition and pay outs for innovative people, innovations will not happen. Change Management and Employee Engagement When strong and profitable ideas are accepted to reap good results, implementation of the `Innovations takes place. Accordingly the employees need to get properly trained and accept the new technology and procedures to get going. All department heads have to act as `change agents. To enjoy the full benefits of change, employees basically require good communication, compensation and culture. This could be achieved through team coordination and suggestive actions. Human resource has to take initiatives to go down to grass roots and counsel the employees who resist the change due to fear of learning, inefficiency to adapt, poor working knowledge, over workload, etc. If HR actively participates in the employee engagement and is given a green signal to go ahead to fix compensation matching the living index of economy, every employee will happily come forward to embrace innovation. Sometimes a successful concept of HR innovation formulated elsewhere in the world may be a death blow to a company here. It is essentially the duty of the management to invite the heads across the table and discuss the views on innovation taking all the above said parameters into consideration. Multi-skill Development: Need of the Hour Consequent upon the global alignment of organizations, they are witnessing a change in systems, management culture and philosophy. The role of HRM is becoming all the more important because of the need for multi-skill development. Some of the recent trends are: The recent quality management standards ISO 9001 and ISO 9004 of 2000 focus more on people-centric organizations. Organizations now are required to prepare themselves in order to address people-oriented issues with commitment from the top management with vigorous thrust on HR issues, more particularly on training. To combat ahead of competition in this world of recession and uncertainty, organizations have to introduce the six-sigma practices. They should use meticulous analytical tools with leadership from the top and develop a method for sustainable improvement. These practices improve organizational values and help in developing free product or services at a minimum cost. Outsourcing of HR has made the department redundant in an organization. Triumphs, the international pioneer in HR BPO has already roped in Bank of America, international players BP Amoco and over the years have spread their business to most of the Fortune 500 companies. With the swelling of global job mobility, recruiting competent people is also increasingly becoming difficult, especially in India. Therefore by creating and enabling culture, organizations are also required to work out a retention strategy for the existing skilled manpower. Latest Trends in the International HRM Modern workplaces are extremely complex situations in which all the elements: the nature of the job, the traits of the employee, the structure of the organization/ organizational sub-units as well as the methods and aims of supervision are extremely diverse and/or fluid. And, as a response, have emerged a wide variety of innovative HR practices. The first common element which is the need for innovation and experimentation required in order to cope up with the change in the sector as workforce around the world has undergone a serious transformation. Changing demographic patterns, income levels, aspirations & expectations have given rise to a more demanding & awarding workforce. Responsibilities and functions such as relocation, orientation and translation services are the areas in which the international HRM puts emphasis to help workforce to be much more adaptable to the new and different environment outside their own country. Careful evaluation of the personal characteristics of the candidate and his/her spouse are of utmost importance in the selection of employees. In order to enable the manager to understand cultural difference better, training and development should be extended beyond information and orientation training to include sensitivity training and field experiences. Managers need to be saved from the career development risks, re-entry problems and culture shock. Performance evaluations should combine the two sources of appraisal information in order to balance the pros and cons of home country and host country evaluations. Compensation systems should support the overall strategic intent of the organization but should be customized for local conditions. Best of HRM Practices Human Resources (HR) are the mighty pillars that form the business colonnade in the world of economy. They, therefore, deserve all the care and attention. The very art of managing HR is based on thoughtful policies and a bouquet of helpful practices aimed at creating motivation and commitment in the workforce. While HR policies form the framework for effective functioning of HR management, HR practices form the culture in business management. The practices should, therefore, necessarily be the "best practices in HR Management (HRM)", which would result in benefits to all stakeholders like the shareholders, creditors, suppliers, consumers and employees. The organization as a whole will then reap the benefits. Such practices invariably create, in the workforce, an awareness of the need to achieve the business goals in the best possible and ethical manner. They are also aimed at creating a sense of togetherness in the organization. In fact, the set of the `best practices are evolved in such a manner that the HR policy weaves itself into the business strategy, providing support to the organization in all its endeavours to achieve its business targets and to overcome business hazards like competition and change in consumer patterns. Good HR policies also help overcome economic forces such as recession, inflation, etc. However, HR experts are of the opinion that though the "best practices in HRM" cannot be uniformly applied to all the organizations, they have a kind of uniform applicability in some functional areas, where psychological factors play an important role. Cultural Diversity and Work Culture Given the continuing trend toward globalization, there is a growing need for managers with cross-cultural understanding. Employees who have cross-border responsibilities and/or cross-cultural relationships need to be prepared to effectively handle the inevitable intercultural tasks and challenges involved. Providing them with the awareness, knowledge, positive attitudes, and skills they require is an important responsibility of International Human Resource Managers. It is pertinent to observe here that Whirlpool International is a US-Dutch joint venture, with administrative headquarters in Comerio, Italy, where it is managed by a Swede and a six person management team from Sweden, Italy, Holland, the United States, Belgium and Germany. At the US-Japanese joint venture, GM-Toyota, managers as well as employees from both America and Japan learn to work side by side and adjust to a unique blend of country and corporate culture. For the Americans in this organization, helping to acculturate the Japanese employees not only demonstrates friendly goodwill but is a necessary part of securing their own future in the company. Cross-cultural Training Japanese multinationals typically have recall rates below 5%. While this success is largely attributable to training programs, it is also the result of intelligent planning by the human resource management staff in most Japanese organizations as reported in a study by Tung. In the global workplace, cross-cultural training can provide managers on international assignments with the cross-cultural understanding essential to accomplish their tasks. PepsiCo Inc., has an orientation program for its foreign managers, which brings them to the United States for one-year assignments in bottling division plants. General Electric likes its engineers and managers to have a global perspective whether or not they are slated to go abroad. Transnational Performance Management and Compensation An effective performance management system also has to deal with the challenges of comparing subsidiary managers in different countries. For example, it is difficult to compare the performance of a French subsidiary manager with that of a Singapore subsidiary manager because each manager works under different environmental conditions. However, emphasis on goal setting and agreement on performance goals between managers and employees may assist in overcoming some of these difficulties. Foreign assignments with a short duration are not conducive to effective performance because the expatriate is not allowed sufficient time to become acquainted with and adapt to the new environment. Many international businesses expect immediate results from their expatriates. The time required by expatriates for adaptation has been estimated at six months, sliced down to four phases: Initial phase, disillusionment phase, culture shock phase and positive adjustment phase. Compensation policy becomes a less precise process than is the case in domestic HR context. "Transfer a $100,000-a-year American executive to London and suddenly he or she costs the employer $300,000. Move him to Stockholm or Tokyo, and he or she easily becomes a million dollar manager," explains Wall Street Journal. Special problems such as taxation, exchange variations, and obtaining valid international living cost data are some of the challenges. Multinational firms need to match their compensation policies with their staffing policies and general HR philosophy. It is important that MNC employees perceive equity and goodwill in their compensation and benefits, whether they are PCNs, HCNs, or TCNs. Global Management Teams Global management team refers to the collective entity of managers from several countries relying on group collaboration in order to experience optimum success and goal achievement. In order to achieve the individual and collective goals of team members, international teams must "provide the means to communicate corporate culture, develop global perspective, coordinate and integrate the global enterprise, and be responsive to local market needs. Conclusion Business houses across the world in general, and Indian corporate citizens in particular cannot afford to assume a low-key profile in the ongoing international economic revolution. The future business environments replicate multi-cultural supermarkets, defying national and geographical jurisdictions. It is in this context that the strategic role of Human Resource Management in strengthening and sustaining corporate growth has assumed paramount significance the world over. As patrons of human resources to the industry, business schools and universities cannot remain immune to these challenges facing the industry. Building cross-cultural intelligence and understanding among students would be a significant challenge for business schools. Business schools are increasingly looking forward to active support from the industry. It is, therefore, imperative that business schools sponsor cross-cultural knowledge capsules in the domain of their academic curricula by partnering international faculty and corporate houses in providing cross-cultural exposure to the `Managers in the making. This would strengthen and broaden the bridge between the industry and the academic worlds, supporting each others concerns and discharging their respective responsibilities. References Birdjoyce, A, Osland, S Mendenhall, M Schneider, S June (1999), "Adapting and Adjusting to Other Cultures: What We Know but Dont Always Tell", Journal of Management Inquiry, Thousand Oaks. CA Bartlett and S Ghoshal, (1990) "Matrix Management: Not a Structure, a Frame of Mind", Harvard Business Review Greengard S., (1995) "When HRMS Goes Global: Managing the Data Highway", Personnel Journal 7, No. 6; 90-91. 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