The Vital Role of a Human Resources - Research Paper Example

Human Resources and Recession Submitted by: XXXXXX Number: XXXXXX of XXXXX XXXXXXX XXXXXXX XXXXXX Date of Submission: XX – XX – 2009 Table of Contents Table of Contents 1 Introduction: 2 Human Resource Planning: 2 Flexibility: 4 Recruitment: 5 Conclusion: 7 Bibliography 8 Introduction: Human resources plays a very important role in every business and if the finance if regarded as the heart of a company, the human resources can be referred to as the blood of the company. In the current period however there have been several changes that have been noted in the human resource departments across various companies due to economic conditions across the world being faced with a major hit. This paper aims at discussing how the strategic changes have been made in companies and how the organisational behaviour has changed over time due to recession. Also, the flexibility changes that have been made have also been discussed. Lastly, the recruitment decisions and the changes that are made have also been included. An attempt to provide examples for each of these situations has also been made to gain a better perspective of the situation and to understand how recession has impacted the companies. Human Resource Planning: Human resource planning is the process of ensuring that the right person is at the right job at the right time. According to Vetter, 1967, ‘the process by which management determines how the organization should move from its current manpower position to its desired position. Through planning, management strives to have the right number and the right kinds of people, at the right places, at the right time, doing things which result in both the organization and the individual receiving maximum long-run benefits’ (Jackson & Schuler, 1990). There have been several businesses in the current economic environment who have made several changes in the human resources being used within the company to ensure that there is no wastage of resources and better levels of cost cutting as well. In the current economic condition with the level of recession increasing steadily, there are two main view points, a) viewpoint of the employees, and their salaries, and b) viewpoint of the employers and ‘loaded’ labour costs. Two of the companies that have used the recession as a basis for lay off include, Citigroup, which has laid off a total of 52,175 people, and General Motors which lay off a total of 75,658 people (Kneale & Turchioe, 2009). The companies did so due to the increasing expenses and need for cost cutting. However in the long term the companies do not consider how much of these lay offs could cost them. In the hustle bustle of reducing the costs, the companies, i.e. Citigroup and General Motors have also laid off several good employees who bring the company a high level of profit. In the long run this could prove to be very dangerous for the companies as the best employees are now also allowing the competitors to get hold of their employees. In the long run, it is essential to note that employing a new employees works out to be more expensive than to retain older employees. As an evaluation of this process it is clear that the two companies like the many others that have lay off the employees, it is clear that as the recession reduces and the economy moves back into a more balanced environment, these companies will be faced with the issue of employing newer people. This is simply because the costs will move to be relatively higher than all that has been saved from the lay offs. This is simply due to the various processes that include the amounts that they need to spend to gain back the employees and training them and make them fit for the job and to fit into the company. In the long run, if a company uses the methods of voluntary retirements and other similar modes of removing the employees then the companies will benefit to a much greater extent than by laying off the employees, which would cause unnecessary issues and misunderstandings. Flexibility: In terms of the flexibility of the firms the companies are noted to have relatively lower levels of flexibility and lower level of tolerance as well. The recession has hit almost every sector and in a number of manners has impacted the working conditions of the companies. Companies have been noted to have a lack of flexibility in terms of the benefits to the employees. However, in terms of work timings the companies in the present situation have been noted to be working several hours of overtime and reduced staff. This is an effort to reduce costs and increase the profits of the companies. An example of this is an Indian IT firm in California, Infosys, where they have cut down the number of employees in the teams and have moved on to making the current employees even work for over 12 – 13 hours each day. The companies utilise the hard approach and if employees are unwilling to work the overtime hours, then they could also be removed from the jobs. All this and much more without any overtime pay (Search India, 2009). Another example of a soft approach is that used by Royal Bank of Scotland, where the company hires people for the job and pays them well for the job. However if an employee does not contribute to the company then the company takes measures like removing the employees and finding replacements. This process has not changed a lot over time even with the recession and the issues being faced in the current economic conditions (Mathis & Jackson, 2007). In terms of the flexibility it is clear that lack of flexibility in terms of working of the employees makes it very difficult for the employees to perform in the companies (Mathis & Jackson, 2007). Evaluating these it is clear that the employees will be faced with the issue of de motivation and lack of interest in their jobs as the work load increases and the employees are not given any kind of recognition and their efforts tend to go unrecognised at all times (Waldo, 2005, p. 9). Recruitment: There are two main approaches used by every company to handle the human resources. These are the Hard and soft approach. Douglas McGregor was an American social psychologist who believed that there are two ways of motivating people within an organisation. Focusing on this he developed the theory X and theory Y, which has been used in the human resources management, organisational behaviour and organisational development for years now (Waldo, 2005). He introduced his theory in his book ‘The Human Side of Enterprise’ which was published in 1960. He maintained that there were two main ways of managing people. His theory acts as a reminder to the managers who under normal pressure forget the rules of managing people within an organisation (Buchanan & Huczynski, 2004). Hard Approach: The theory was based on the main assumption that employees work only for money and security. This theory assumes that the people are extremely lazy and employees who fall in this are very concerned about self interest only (Bach, 2006). This mainly highlights that there exists two goals, one that is set down by the company and the other is the one set down by the employee. Hence the management is required to ensure that the employees work towards attaining the goals of the company rather than their own. This style is a combination of correctives and coercions (Losey, Ulrich and Meisinger, 2005). Soft Approach: McGregor also emphasised on the fact that some people are not mature enough to meet up to that assumed within the theory hence a hard approach is used until the employees reach the level of maturity. This method as seen is a complete opposite of the previous theory (Buchanan & Huczynski, 2004). It is believed in this method that every person has a different mode of working, and different style, hence it is up to the manager to allow the employees to work as per their desire as long as the end product is in favour of the company and its progress (Bach, 2006). Companies like the IT firms in India like Satyam Infotech utilise the hard approach and with the company used a hard approach on its employees in times of financial crisis (ET Bureau, 2009). Other companies like Tata Consultancy Services also an IT firm, uses the soft approach and understands the value of the employees. Satyam Infotech has stopped hiring people and all recruitment has been stopped due to the high levels of financial difficulties and recession. Tata Consultancy on the other hand continues to hire people and although in very small numbers when compared to a normal time, the company still continues on with the hiring process (Shinde, 2009). In terms of the effectiveness of these acts by the company, it is clear that the companies using the hard approach will be faced with higher difficulties in terms of recruitment and hiring process, while the soft approach companies will find it simpler to recruit more number of people for the jobs. In terms of Tata Consultancy services, the company continues to keep up its promise of hiring all the people that had been recruited from the campus recruitments and other forms before the company moved into the cost cutting processes (Fit-enz, 2001). Conclusion: Recession has had a major impact not only on the economies of the country but also every company. The main impact that has been faced is in terms of the human resources, and as seen above the recession has led numerous companies to go into a stage where they need to lay off employees to be able to be financially stable. It has also been noted that almost 1.9 million jobs were lost in the last quarter of 2008 (Kells, 2009). The human resources are the most badly hit by the recession both in terms of jobs, and salaries as well as the constantly increasing cost of living (Bardwick, 2007). In terms of businesses, they are much more likely to cut down jobs to the greatest extent and this in turn means all the human resource planning and recruitment will be faced with high levels of changes in every business, irrespective of the industry. Also the changes that are found in the companies due to recession will have a major impact on the human resources later as well once the recession has subsided as well (Elikwu, 2008). Bibliography Bach, S., 2006, ‘Managing Human Resources’, 4th edition, Blackwell Publishing Bardwick, J.M., 2007, ‘One Foot Out the Door: How to Combat the Psychological Recession Thats Alienating Employees and Hurting American Business’, 31st October 2007, AMACOM Publishers Buchanan D. and Huczynski A., 2004, ‘Organizational behaviour’, 5th edn, Prentice Hall, Essex Elikwu, E., 2008, ‘The Fastest, Easiest Way to Get Good Jobs In Todays Economy. Guaranteed! (Recession)’, 1st Edition, Kindle Edition, Elikwu Publishers ET Bureau, 2009, ‘CBI Probes Recruitment Process at Satyam’, 16th April 2009, Accessed on 25th November 2009, Retrieved from http://infotech.indiatimes.com/news/software/CBI-probes-recruitment-process-at-Satyam/articleshow/4407309.cms Fit-enz, J., 2001, How to Measure Human Resource Management (3rd Edition)’, Mc Graw Hill Publishers Jackson, S.E., & Schuler, R. S., 1990, ‘Human Resource Planning’, American Psychologist, Volume 45, No. 2, p. 223 – 239 Kells, T., 2009, ‘Layoffs List: Job Losses in 2008 and 2009 (Ongoing)’, 9th January 2009, Accessed on 19th November 2009, Retrieved from http://www.nowpublic.com/tech-biz/layoffs-list-job-losses-2008-and-2009-ongoing#2009 Kneale, K, & Turchioe, P., 2009, ‘Layoff Tracker’, 21st November 2009, Accessed on 24th November 2009, Retrieved from http://www.forbes.com/2008/11/17/layoff-tracker-unemployement-lead-cx_kk_1118tracker.html Losey, M., Ulrich, D., and Meisinger, S., 2005, ‘The Future of Human Resource Management: 64 Thought Leaders Explore the Critical HR Issues of Today and Tomorrow’, 1st edition, 2nd May 2005, Wiley Publishers Mathis, R.L., & Jackson, J. H., 2007, ‘Human Resources Management’, 12th edition, 11th September 2007, South West College Publications Search India, 2008, ‘What California Laws did Infosys Violate?’, 22nd January 2008, Accessed on 19th November 2009, Retrieved from http://indiablogs.searchindia.com/2008/01/22/what-california-laws-did-infosys-violate/ Shinde, S., 2009, ‘TCS Changes Recruitment Strategy’, 13th February 2009, Accessed on 24th November 2009, Retrieved from http://www.rediff.com/money/2009/feb/13tcs-changes-recruitment-strategy.htm Waldo, D. 2005, Recession-proofing employee motivation. Westchester County Business Journal, Vol 14, Issue 14, page 9 Read More