The management needs to acknowledge the important role of the Human Resource Department in effectively guiding organizations towards profitability. It is crucial for them to allocate significant time and resources to understand the evolving nature of the HR department in the 21st century. To remain competitive and maintain an edge, the HR department must actively adapt to changes in HR practices and stay updated on emerging issues.
Due to high attrition rates and the poaching strategies of competitors, there is a significant shortage of skilled employees. As a result, a company’s HR activities play a crucial role in addressing this crisis. It is essential to develop suitable HR policies that align with both the organization’s goals and the individual’s aspirations. HR managers must handle various challenges, including recruiting employees, providing training, and implementing strategies to retain them. Additionally, they need to establish an effective career management system for employees.
Merely offering employee care is insufficient, HR initiatives should also prioritize meeting quality standards, customer-centricity, productivity improvement, stress management, teamwork promotion, and leadership development. This book is divided into two sections that discuss new trends in HR and examine the challenges faced by HR in different industries such as financial services, IT, power sector, healthcare, and more.
This book is valuable for both practicing HR managers and individuals interested in Human Resource Management. It emphasizes the growing importance of human resources and the necessity to develop effective HR strategies to address evolving HR issues in the 21st century. The field of Human Resource Management has undergone significant changes in the past century, particularly in recent times.
HRM has experienced significant changes due to various factors. In the past, it was seen as a maintenance function with limited impact on financial outcomes. However, today, experts and professionals recognize the important role of HRM in helping organizations stay competitive in the global economy. Anticipated future developments in HRM include:
Advancements in technology and the expansion of educational institutions are leading to increasing education levels. As a result, workers are becoming more aware of their higher level needs, necessitating managers to develop appropriate policies and techniques to motivate and engage knowledgeable workers. A better educated and organized workforce will also seek greater discretion and autonomy in the workplace.
Technological developments require retraining and mid-career training for both workers and managers, while the rise of international corporations presents new challenges for the personnel function.
The composition of the workforce is undergoing changes as women, minority groups, SCs, and STs gain improved access to education and employment opportunities. Organizations must consider the potential talent available in these groups when conducting manpower planning. These changes will result in new values within organizations.
In India, there is now highly regulated government involvement in personnel management.
In the upcoming years, private organizations will be required to join forces with the government in order to enhance their labor welfare programs. They will have to back governmental efforts concerning public health, education, training and development, as well as infrastructure projects. Adhering to legislation and trade unions’ requirements, prioritizing occupational health and safety will become crucial for personnel management. Furthermore, organizational development will encompass the initiation and administration of change processes aimed at enhancing overall effectiveness.
Top management will have a more active role in human resources development. Additionally, there will be a shift towards project and team forms of organization, which will require a greater focus on the individual and redesigning jobs to provide more challenging opportunities. As part of this shift, personnel management will play a larger role in organizational planning, structure, and composition. The personnel department will also need to be more cost-conscious and profit-oriented.
9. Improved appraisal and reward systems will be necessary for organizations to share gains more frequently with workers. It is crucial to develop performance appraisal and performance-linked compensation systems that are objective and result-oriented.
10. The workforce of the future will require new and improved personnel policies. Traditional family management will be replaced by professional management that places a greater emphasis on human dignity. Therefore, personnel management in the future will encounter new challenges and undertake new responsibilities.
Participative leadership will replace autocratic leadership. There will be a need to redevelop and reward creative skills, and the emphasis will shift from a legal and rule-bound approach to a more open and humanitarian approach. Human resource management is a process that brings people and organizations together to achieve their respective goals. The role of HR manager is transitioning from being a protector and screener to being a planner and change agent. Personnel directors are now seen as the new corporate heroes.
The name of the game in business today is personnel. A good financial or operating report cannot be achieved without proper personnel relations. The increasing number of highly skilled and knowledge-based jobs and the decreasing number of low skilled jobs require future skill mapping through HRM initiatives. Indian organizations are also undergoing changes in systems, management cultures, and philosophy due to global alignment. Consequently, there is a need for multi skill development.
The role of HRM is increasingly crucial, as observed in recent trends. One of these trends is the emphasis on people-centered organizations in the latest quality management standards, ISO 9001 and ISO 9004 of 2000. Therefore, organizations must now prepare themselves to effectively handle issues related to their people with the support and dedication of top management. This places a renewed focus on HR matters, particularly training.
Charles Handy advocated future organizational models such as Shamrock, Federal, and Triple I. These models also emphasize people-centric issues and call for redefining the future role of HR professionals.
To stay ahead of competition in this uncertain world, organizations have implemented six-sigma practices. Six-sigma utilizes rigorous analytical tools and requires leadership from the top to establish a method for sustainable improvement. These practices enhance organizational values and aid in producing defect-free products or services at a minimal cost.
Human resource outsourcing is a new approach that renders traditional HR departments unnecessary in an organization.
Exult, a global leader in HR BPO, has already partnered with Bank of America, as well as international players BP Amoco, with plans to expand their business to a majority of Fortune 500 companies in the future. With the rise in global job mobility, it is becoming more challenging to recruit qualified individuals, particularly in India. Therefore, organizations need to establish a supportive culture and develop strategies to retain their skilled workforce. The future role of personnel managers will involve dealing with emerging trends such as:
(i)
In the future, personnel managers will need to emphasize the overall development of human resources in various areas such as career planning, organization development, and social justice. Also, trade unions will play a more active role in industry organization and management. As change agents, personnel managers will be responsible for environmental scanning and development planning, spending more time promoting changes rather than maintaining the status quo. Additionally, the personnel function will focus more on cost-effectiveness and profitability. Instead of solely administering personnel activities, the personnel department will seek opportunities for profit improvement and growth. Greater authority and responsibilities in employee welfare services will be delegated to personnel managers. Continuous retraining will be necessary for personnel managers to prevent their knowledge and skills from becoming outdated. Thus, the role of personnel managers will become more challenging and complex in the future.
They will need to be experts in behavioral sciences and play a creative and development role, acquiring new skills, values, and attitudes to successfully fulfill their new responsibilities. The conclusion of this is that trends in Human Resource Management have changed the way organizations operate, as they rely more on HRM to enhance success in today’s competitive global environment. “I never predict. I just look out the window and see what is visible – but not yet seen” (Peter Drucker).
HRM is crucial for organizations as it helps them in finding and retaining the most suitable individuals from the external labour market. The goal is to establish a connection between the social system and technical system of the organization. It is essential for organizations to have highly skilled and motivated employees. This is particularly important for organizations that depend on knowledge workers. These employees are granted the responsibility and authority to make decisions related to product development and customer service.
HR professionals play a crucial role in supporting organizational strategies for quality growth and efficiency. This includes hiring employees in foreign countries where organizations have international operations, as HR professionals must be knowledgeable about cultural and business practice differences. In today’s world, information systems are increasingly utilized by HR professionals, often accessed through the Internet. The Internet also plays a significant role in HRM applications, with organizations utilizing online tools to search for and screen talented candidates.
Employees can receive online training as part of the employment relationship, which is characterized by a psychological contract outlining the expectations of both employers and employees. Employees desire flexible work schedules, comfortable working conditions, increased autonomy, opportunities for training and development, and financial incentives tied to performance. To accommodate these changes, HRM needs to plan for flexible staffing levels. Organizations aim to achieve staffing flexibility by exploring alternatives to traditional employment relationships.
The changing role of human resources is crucial in gaining a competitive advantage in today’s market. Many companies are now outsourcing their HR services to effectively manage their human resources and stay ahead of the competition. Hindustan Lever Limited (HLL) serves as a prime example of this HR evolution.
With its traditional culture, Hindustan Lever, one of India’s oldest organisations, has ventured into network marketing by launching Hindustan Lever Network (HLN). This unique opportunity aims to be the most preferred business opportunity for consultants, offering them a rewarding business and self-development opportunity. Hindustan Lever Network emphasizes the importance of excellence in every aspect.
HLN has chosen to outsource non-core functions to focus on strategic issues, reduce fixed costs, and delegate non-creative and non-business activities. They have recognized the value of sharing human resource services and have approached Planman Consulting Group to outsource their training activities.
The Planman-HLN association has been established so that HLN can outsource all of its training activities to Planman Consulting. This allows HLN to focus on its core functions. The purpose of this association is to highlight the fact that HLN lacks the expertise and research in training and development, whereas Planman-IIPM has the necessary knowledge and resources. Additionally, this association also helps HLN save costs compared to the investments they would have to make if they were to handle this in-house.
Adoption of this “new” model improves the ratio of human assets. Over the years, a variety of models have been designed, considered, and even implemented in an effort to achieve HR outsourcing transformation. HR executives are most recognisable with the constant swing between centralised and decentralised models. In the past, organisations believed they could benefit from economies of scale with fully centralised HR services. However, decentralised service delivery provided flexibility to meet unique business-unit requirements but with higher cost and duplication of effort. Organisations that have experienced this swing between centralised and decentralised operations are familiar with the results. One note of concern is employees’ belief that the company lacks a common culture or brand. Heavily decentralised organisations find that business units create duplicate and contradictory HR practices, policies, processes, and procedures.
The differences seen throughout the company are not necessary for business operations but rather arise from historical factors, individual preferences, and past experiences. By changing the HR’s focus, the organization can prioritize meeting customer needs and establish a company brand identity through taking advantage of economies of scale. To benefit from both approaches, companies are adopting the shared service approach which allows for efficient processes across various units or locations while still keeping customer satisfaction as a priority.
The HR-shared services strategy is essential for empowering HR leaders to support their businesses in reaching strategic objectives. Numerous leading companies have implemented the HR-shared services model to improve service quality, decrease processing cycle times, and save money. IBM, Royal Bank of Scotland, Lockheed Martin, Warner Lambert, Hewlett-Packard, Sears, and Boeing are among the companies that utilize different models of HR shared services.
Human resources encompasses various tasks such as recruitment, staffing, compensation, benefits, and training and development. The field of human resource management has experienced substantial transformations in the past two decades regarding the demographic makeup of HR professionals, their entry into the industry, as well as their functions and responsibilities. Presently, HR is increasingly employed to deliver additional value to organizations beyond mere record-keeping, payroll management, and administration of employee benefits.
The role of HR departments has shifted to focus on talent management and leadership development, resulting in many transactional functions being outsourced. However, some argue that HR functions are not seen as strategic within organizations. Various factors, including organizational staff size, contribute to how HR’s role is perceived.
Organizations must determine the critical functional areas for their strategy, prioritize these functions, and decide how to develop and assign HR staff accordingly. The size of the organization’s staff directly impacts the headcount and budget of the HR function/department, but additional factors may also influence decisions regarding HR responsibility and functional area staffing. HR professionals might have control over the functional areas they are assigned to and the extent of their responsibilities.
How much mentoring are HR professionals receiving regarding their strategic contributions to the organization, including mentoring from leaders in non-HR functions? It is important to understand how HR is approached within the organization as this determines how HR contributes to business strategies and the value it can bring. Furthermore, it affects HR professionals’ career progression expectations and the perception and mentoring involvement of non-HR business leaders.
During the industrial revolution, factories created personnel departments to address the needs of workers in terms of their wages and welfare. This marked the emergence of human resource management as a distinct profession. However, the roots of workforce management can be traced back to the arrangements made for the well-being of apprentices working under master craftsmen during the medieval ages. It was during the industrial revolution that the putting out system, which was prevalent during the medieval ages, was replaced by factories.
The early factory workers endured extended work hours in extremely unsanitary circumstances and typically resided in poor neighborhoods. These conditions led to a series of labor riots, with the most renowned being the Ludds riots of 1811 in Nottingham, England, triggered by wage reductions. The government promptly stepped in to establish fundamental rights and protections for employees, compelling factory owners to establish a formal system for addressing wages, welfare, and other labor concerns in order to comply with statutory regulations.
The emergence of Personnel Management as a distinct profession resulted from the changing winds affecting the field during the latter decades of the twentieth century. The Hawthorne Studies, conducted by Elton Mayo, discredited Taylor’s Scientific Management approach to productivity increase by demonstrating that non-monetary factors were the main drivers of productivity and motivation. As a result, numerous new theories emerged based on this behavioral perspective.
Various popular theories emerged in the field, such as Douglas McGregor’s Theory X and Theory Y, Abraham Maslow’s hierarchy of needs theory acknowledging individuals’ pursuit of self-actualization, Victor Vroom’s Expectation Theory, Alderfer’s ERG Theory, and others. Government interventions resulted in the introduction of new laws safeguarding workers’ rights. These changes brought about a shift from the static and passive approach of Personnel Management to a more lively Human Resource Management approach.
This new approach viewed workers as valuable resources rather than mere cogs, representing a significant upgrade. Unlike Personnel Management, Human Resource Management gradually transformed into a line management function intertwined with the core business. The distinctions between Personnel Management and Human Resource Management were evident in various aspects.
Efforts were made to increase worker commitment and loyalty as they directly affect organizational profitability. Motivation strategies included creating a challenging work environment, offering free holidays, fostering an active social community within the workforce, providing fringe benefits, and offering monetary incentives. Training focused on behavioral training to change attitudes and develop basic skills rather than just work-related skills. Wage and Salary Administration became more complex with the introduction of performance-related pay and employee stock options. Performance appraisal systems adopted new techniques like Management by Objectives and 360-degree appraisals with an emphasis on leadership rather than management. The end of the century brought a new turn in the evolution of Human Resource Management with the introduction of the Strategic Human Resource Approach.
The significance of human resources has been greatly elevated due to increased competition in the global free market and the rapid growth of technology and knowledge-based industries. Human resource management, which was once an obscure role a century ago, has now emerged as the most critical function within an enterprise. The workforce, previously regarded as mere “resources,” has now transformed into “assets” and is recognized as a valuable source of competitive advantage. The primary focus of human resource management is centered around aligning individual goals and objectives with corporate goals and objectives. Instead of enforcing rules or dictating terms, the approach adopted is that of facilitation and promotion of a participative approach.
These changes had a significant impact on the functions of Human Resources. It led to a shift towards using performance-based short-term contracts instead of long-term employment. Compensation became directly tied to the profitability of the company and the employee’s contribution to that profitability. Additionally, these changes brought new opportunities for the training and development function by promoting and supporting innovation and creativity. The work experience was also enhanced, resulting in increased motivation.
Performance and Talent Management, which replaces performance appraisals, is a Strategic Human Resource Management approach that blurs the line between a specialized Human Resource Management function and core operational activity. In many instances, Human Resource Management takes the lead in implementing interventions like Total Quality Management.
