The management has to recognize the important role of Human Resource Department in order to successfully steer organizations towards profitability. It is necessary for the management to invest considerable time and amount, to learn the changing scenario of the HR department in the 21st century. In order to survive the competition and be in the race, HR department should consciously update itself with the transformation in HR and be aware of the HR issues cropping up.
With high attrition rates, poaching strategies of competitors, there is a huge shortage of skilled employees and hence, a company’s HR activities play a vital role in combating this crisis. Suitable HR policies that would lead to the achievement of the Organization as well as the individual’s goals should be formulated. HR managers have to manage all the challenges that they would face from recruiting employees, to training them, and then developing strategies for retaining them and building up an effective career management system for them.
Just taking care of employees would not be enough; new HR initiatives should also focus on the quality needs, customer-orientation, productivity and stress, team work and leadership building. This book is divided into two sections that throw light on the emerging HR trends and discusses HR issues in various industries like financial services, IT, Power, Healthcare, to name a few.
This book should be valuable for practicing HR managers of every organization and also for those who have a significant interest in the area of Human Resource Management, to realize the growing importance of human resources and understand the need to build up effective HR strategies to combat HR issues arising in the 21st century. Introduction Human Resource Management has evolved considerably over the past century, and experienced a major transformation in form and function primarily within the past two decades.
Driven by a number of significant internal and external environmental forces, HRM has progressed from a largely maintenance function, with little if any bottom line impact, to what many scholars and practitioners today regard as the source of sustained competitive advantage for organizations operating in a global economy. CHANGES IN HRM : Some of the significant changes that are likely to take place in the human resource management are as follows:
1. Increase in education levels: Due to technological progress and the spread of educational institutions workers will increasingly become aware of their higher level needs, managers will have to evolve appropriate policies and techniques to motivate the knowledge of workers. Better educated and organized workforce will demand greater discretion and autonomy at the work place. 2. Technological developments: This will require retraining and mid-career training of both workers and managers. Rise of the international corporation is proving new challenges for personnel function. . Changing composition of work force: In future, women and minority groups, SCs and STs would become an important source of man power in future on account of easy access to better educational and employment opportunities. Therefore manpower planning of every organization will have to take into consideration the potential availability of talent in these groups. Changing mix of the workforce will lead to new values in organizations. 4. Increasing government role: In India, personnel management has become very legalized.
In future private organizations will have to co-ordinate their labour welfare programmes with those of the government private sector will be required increasingly to support government efforts for improving public health, education training and development and infrastructure. 5. occupational health and safety: Due to legislative presence and trade union movement, personnel management will have to be more healthy and safety conscious in future. 6. Organizational development: in future, change will have to be initiated and managed to improve organizational effectiveness.
Top management will become more actively involved in the development of human resources. 7. New work ethic: greater forces will be on project and team forms of organization. As changing work ethic requires increasing emphasis on individual. Jobs will have to redesigned to provide challenge. 8. Development planning: personnel management will be involved increasingly in organizational planning, structure, composition etc. Greater cost-consciousness and profit-orientations will be required on the part of the personnel department.
9. Better appraisal and reward systems: organizations will be required to share gains of higher periodicity with workers more objective and result oriented systems of performance, appraisal and performance linked compensation will have to be developed. 10. New personnel policies: new and better polices will be required for the work force of the future. Traditional family management will give way to professional management with greater forces on human dignity. Thus, in future personnel management will face new challenges and perform new responsibilities.
Participative leadership will take the place of autocratic leadership. Creative skills will have to be redeveloped and rewarded emphasis will shift from legal and rule bound approach to more open and humanitarian approach. NEW TRENDS IN HR Human resource management is a process of bringing people and organizations together so that the goals of each other are met. The role of HR manager is shifting from that of a protector and screener to the role of a planner and change agent. Personnel directors are the new corporate heroes.
The name of the game today in business is personnel . Nowadays it is not possible to show a good financial or operating reportunless your personnel relations are in order. Over the years, highly skilled and knowledge based jobs are increasing while low skilled jobs are decreasing. This calls for future skill mapping through proper HRM initiatives. Indian organizations are also witnessing a change in systems, management cultures and philosophy due to the global alignment of Indian organizations. There is a need for multi skill development.
Role of HRM is becoming all the more important. Some of the recent trends that are being observed are as follows: * The recent quality management standards ISO 9001 and ISO 9004 of 2000 focus more on people centric organizations. Organizations now need to prepare themselves in order to address people centered issues with commitment from the top management, with renewed thrust on HR issues, more particularly on training.
* Charles Handy also advocated future organizational models like Shamrock, Federal and Triple I. Such organizational models also refocus on people centric issues and call for redefining the future role of HR professionals. * To leapfrog ahead of competition in this world of uncertainty, organizations have introduced six- sigma practices. Six- sigma uses rigorous analytical tools with leadership from the top and develops a method for sustainable improvement. These practices improve organizational values and helps in creating defect free product or services at minimum cost. * Human resource outsourcing is a new accession that makes a traditional HR department redundant in an organization.
Exult, the international pioneer in HR BPO already roped in Bank of America, international players BP Amoco & over the years plan to spread their business to most of the Fortune 500 companies. * With the increase of global job mobility, recruiting competent people is also increasingly becoming difficult, especially in India. Therefore by creating an enabling culture, organizations are also required to work out a retention strategy for the existing skilled manpower. FUTURE ROLE OF PERSONNEL MANAGERS Some of the emerging trends in the role of personnel manager are as follows:- (i).
Personnel managers of future will have to stress upon overall development of human resources in all respects. (ii). The scope of human resource management will be extended to cover career planning and development, organization development, social justice etc. (iii). Enlightened trade unions will become an active participant in the organization and management of industry. (iv). The personnel manager will be required to act as a change agent through greater involvement in ‘environment and scanning and development planning. They will have to devote more time to promote changes than to maintain the status quo. v). The personnel function will become more cost-conscious and profit oriented. Instead of merely administering personnel activities, the personnel department will have to search out opportunities for profit improvement and growth. (vi). Greater authority and responsibilities will be delegated to personnel managers particularly in the field of employee welfare services. (vii). Personnel managers will have to continuously retrain themselves to avoid obsolescence of their knowledge and skills. Thus, the job of personnel managers will become more difficult and challenging in future.
They will have to be experts in behavioral sciences. They will play a creative and development role. They will thus have play a creative and development role. They will have to acquire new skills, values, attitudes to discharge their new responsibilities successfully. Conclusion: “I never predict. I just look out the window and see what is visible – but not yet seen” (Peter Drucker) Trends in Human resource management have changed the way we work, as organizations are more depended on HRM to increase the success ratio in today’s competitive global environment.
Trends in HRM An organization’s labour force comes from its external labour market – individuals who are actively seeking employment. HRM helps organizations find and keep the best possible fit between their social system and technical system. Organizations need employees with broad skills and strong motivation. Recruiting and selection decisions are especially important for organizations that rely on knowledge workers. Employees’ responsibility and authority are given to make decisions regarding all aspects of product development orcustomer service.
HR professionals can support organizational strategies for quality growth and efficiency. Organizations with international operations hire employees in foreign countries, where they operate, as they need knowledge of differences in culture and business practices. Now-a-days, information system has become a tool for more HR professionals, and often, these systems are provided through the Internet. The widespread usage of the Internet also includes HRM applications. Organizations search for talents, and screening candidates online.
Employees may receive training online. The employment relationship takes the form of a psychological contract that describes what employers and employees expect from the employment relationship. The employees are looking for flexible work schedules, comfortable working conditions and greater autonomy, opportunities for training and development, and performance-related financial incentives. For HRM, the changes require planning for flexible staffing levels. Organizations seek flexibility in staffing levels through alternatives to the employment relationship.
They may use outsourcing as well as temporary and contract workers. Changing Role of HR This changing role of human resource is the answer to attaining a competitive advantage in the present market scenario, and this is reflected in the fact that more and more companies today are resorting to outsourcing of its HR services in order to keep pace with the competition and afford effective management of its human resource as a prime asset of the organisation. HLL (Hindustan Lever Limited) is perhaps one of the greatest examples of HR evolution.
Being one of India’s oldest organisations with its traditional culture, Hindustan Lever has gone on to launch Hindustan Lever Network (HLN), a unique network marketing opportunity that aims to be the most preferred business opportunity by partnering its consultants and providing them with a business and self-development opportunity that is truly rewarding. As a result of this diversion, Hindustan Lever Network has identified the need to be excellent in every aspect.
Since it’s core competency lies in business and products, HLN has started resorting to outsourcing of all other functions to devote more time to its strategic issues, reduce fixed cost and also initiate diversion of non-creative and non-business activities to outside agencies. It is this desire for excellence that it has led Hindustan Lever Network to acknowledge the growing importance of sharing human resource services. In this context, Hindustan Lever Network has approached Planman Consulting Group to outsource its entire training activities.
The Planman-HLN association which has been formed to outsource HLN’s entire training activities to Planman Consulting is one of HLN’s initiatives to make time to concentrate on its core functions. To illustrate further the contention behind this association, HLN does not have expertise or related research in training and development while Planman-IIPM not only has the necessary expertise and reosurces, but at the same time induces cost reduction for HLN as compared to the investments HLN would otherwise bear if they were to do this in-house.
Quite simply, 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 this transformation towards HR outsourcing. Perhaps most recognisable to HR executives is the seemingly constant swing between centralised and decentralised models. In the past, organisations believed they could benefit from economies of scales with fully centralised HR services. On the other hand, however, the gain in lexibility to meet unique business-unit requirements related to decentralised service delivery carries higher cost and duplication of effort. Many organisations that have experienced this swing between centralised and decentralised operations are familiar with the results. One particular note is the belief of employees that the company lacks a common culture or brand. Instead, the heavily decentralised organisations find that business units create duplicate and contradictory HR practices, policies, processes and procedures.
These differences across the company are not business requisites, rather the result of history, individual preferences and experiences. Shifting the focus of HR enables the organisation to direct attention on customers’ needs that include creating a company brand identity through leveraging economies of scale. To realise the benefits of both models, companies are shifting to the shared service approach that enables streamlining of processes across multiple units or locations while maintaining customer focus.
This approach to HR-shared services becomes the critical lever empowering human resource leaders to support their businesses in a way as to advance the enterprise’s strategic objectives. The HR-shared services model has been employed by many leading companies to increase quality, improve service, and reduce processing cycle times as well as expense. For example, various human resource shared services models are found at IBM, Royal Bank of Scotland, Lockheed Martin, Warner Lambert, Hewlett-Packard, Sears and Boeing.
Human resources includes a myriad of functional areas, encompassing responsibilities from recruitment and staffing to compensation and benefits or training and development . The human resource profession has evolved during the past 20 years and continues to change, from the collective demographics of HR professionals and the ways that practitioners enter the profession to the functions and roles served by HR and the value it brings to organizations . 2 HR is increasingly mobilized to offer much more to organizations than record-keeping, payroll and employee benefits administration .
In fact, many of the transactional functions that traditionally formed the core of HR departments’ responsibilities are now often outsourced so that organizations can focus on business strategy through talent management and leadership development activities . Yet, it is argued that HR functions and departments in many organizations are not engaged in strategic roles . What factors contribute to how HR’s role is viewed within the organization? Human resource functions and departments are typically bound by a number of organizational factors, not the least of which is the staff size of the organization .
How do organizations determine which functional areas are critical to the organizational strategy, the priority of critical functions and how to best develop and assign HR staff to those functions? While organization staff size clearly has an influence on the headcount and budget within the organization’s HR function and/or department, there may be other factors contributing to decisions about HR responsibility and functional area staffing . How much control do HR professionals have over the functional areas to which they are assigned and/or the scope of their responsibilities?
To what extent are HR professionals receiving mentoring about strategic contributions to the organization, including from organization leaders in non-HR functions? Understanding how HR is approached in the context of the organization in which it operates is crucial to understanding how HR contributes to business strategies and the value that it is poised to bring to the organization . Moreover, it adds to the overall picture of HR professionals’ career progression expectations as well as non-HR business leaders’ perceptions of and mentoring involvement with HR.
The evolution of human resource management as a distinct profession dates back to the industrial revolution when factories established personnel departments to look into wages and welfare of workers. To understand the evolution of Human Resource Management, one must first understand its basis. The origins of workforce management lies in the arrangements made for the welfare of apprentices working with the master craftsmen in the putting out system that prevailed during the medieval ages. The industrial revolution that led to the establishment of factories displaced the putting out system.
The workers in the early factories faced long hours of works under extremely unhygienic conditions, and mostly lived in slums. This soon resulted in several labor riots, the most famous being Ludds riots of 1811 in Nottingham, England, precipitated by reduced wages. The government soon intervened to provide basic rights and protections for workers, and the need to comply with such statutory regulations forced factory owners to set up a formal mechanism to look into workers wages and welfare, and redress other issues concerning labor.
This led to the emergence of Personnel Management as a distinct profession. The Traditional Human Resource Approach The latter decades of the twentieth century saw the winds of change starting to affect the personnel management profession. Elton Mayo’s Hawthorne Studies had debunked Taylor’s Scientific Management approach toward productivity increase, and established that the major drivers of productivity and motivation were non-monetary factors. A host of new theories emerged based on this new behavioral perspective.
Some of the popular theories that struck ground was Douglas McGregor’s Theory X and Theory Y, Abraham Maslow’s hierarchy of needs theory that recognized the concept of individuals aspiring to reach a state of self actualization, Victor Vroom’s Expectation Theory, Alderfer’s ERG Theory, and more. Government interventions led to the enactment of new legislations that guaranteed workers more rights. All these changed soon led to the transition from the administrative and passive Personnel Management approach to a more dynamic Human Resource Management approach.
This new approach considered workers as valuable resources, a marked improvement from the earlier approach of considering them as mere cogs. While Personnel Management was a strictly staff function, Human Resource management began to become an increasingly line management function, directly interlinked to the core business operations. The major changes in approach from Personnel Management vs Human Resource Management manifested in many ways.
The recruitment and skill enhancement of the workforce having a direct bearing on organizational profitability, efforts began to increase worker’s commitment and loyalty. Motivation took the shape of challenging work environment, free holidays, creating an active social community within the workforce, fringe benefits and the like, besides monetary incentives. Training acquired a new “Training and Development” dimension with the focus on behavioral training to change attitudes and develop basic skills rather than remaining limited to nculcating work-related skills. Wage and Salary Administration became more complex with the introduction of performance related pay, employee stock options and the like The report-card based performance appraisal systems become more proactive with new techniques such as Management by Objectives, 360 degree appraisals and the like emphasis on leadership instead of managing The Strategic Human Resource Approach The evolution of Human Resource Management took a new turn at the end of the century.
Increased free market competition at global level and the proliferation of technology and knowledge based industries raised the importance of human resources, and from an obscure role a century ago, human resource management rose to become the most critical function of an enterprise. The workforce, hitherto considered as “resources” now became “assets” and a valuable source of competitive advantage. The thrust of human resource management now lies in trying to align individual goals and objectives with corporate goals and objectives, and rather than enforce rules or dictate terms, act as a facilitator and promotes a participative approach.
These changes influenced Human Resources functions in many ways. Increased reliance on performance based short term contracts instead of long term employment Direct linkage of compensation to the profitability of the enterprise and the employee’s contribution towards such profitability New dimensions for training and development function by encouraging and facilitating innovation and creativity Motivation through enriching the work experience
Performance and Talent Management displacing performance appraisals Strategic Human Resource Management blurs the distinction between a specialized Human Resource Management function and core operational activity, and very often, Human Resource Management drives interventions such as Total Quality Management and the like.