New Trends in HRM

INDEX

NO. CONTENT

1 Introduction

2 External and internal factors influencing the Personnel function

3 HRM Activities

4 Technological Changes and HRM

5 How to deal with a human resource surplus situation?

6 Economic, Political and Social Challenges and HR

7 What HR managers can do?

8 Political factors

9 Social factors

10 Local and government-related factors

11 Trade unions

12 Managing workforce diversity

13 Internal Environment and Hr

14 Designing appropriate HR systems

15 An Aging Workforce

16 Skill Deficiencies of the Workforce

17 High-Performance Work Systems

18 Knowledge Workers

19 Employee Empowerment

20 Teamwork

21 Focus on Strategy

22 Business Strategy: Issues Affecting HRM

23 Focus on Strategy

24 Traditional HR vs. Strategic HR

25 Technological Change in HRM

26 A Changing Economy

27 Changes in the Employment Relationship

28 Changes in the Employment Relationship

Introduction

Historically, the HR Department was viewed as administrative overhead.

HR processed payroll, handled benefits administration, kept personnel files

and other records, managed the hiring process, and provided other

administrative support to the organization

The role of Human Resources is changing as fast as technology and the

global marketplace

The positive result of these changes is that HR professionals have the

opportunity to play a more strategic role in the business.

The challenge for HR managers is to keep up to date with the latest HR

innovations -technological, legal, and otherwise.

How HR managers can anticipate and address some of the most challenging

HR issues.

External and internal factors influencing the Personnel function

External factors

Technological factors

Economic challenges

Political factors

Social factors

Local and Governmental issues

Unions

Employers’ demands

Workforce diversity

Internal factors

Mission

Policies

Organization Culture

Organization Structure

HR Systems

HRM Activities

Technological Changes and HRM

Technology includes tools, machinery, equipment, work procedures and employee

knowledge and skills. The impact of technology on HR can be profound, as the

following things clearly reveal:

New skills, knowledge, experience and expertise required to gain the edge

over rivals.

Downsize operations, cut organizational layers and cut the extra fat to

survive in a competitive world

Collaborate and achieve teamwork

Relocate work from the office to the home

Internet and intranet revolution

How to deal with a human resource surplus situation?

Economic, Political and Social Challenges and HR

Now-a-days, people, goods, capital and information are moving around the

globe as never before.

Global competition is making every firm to think in terms of gaining an edge

over rivals by producing high quality goods at a very competitive price.

This is where the ‘people’ dimension comes into being. Incentives, favorable

work climate, team spirit, freedom to think and act independently, and a host

of other HR initiatives are needed to keep talent from flying away.

What HR managers can do?

Use workforce skills and abilities in order to exploit environmental

opportunities and neutralize threats.

Employ innovative reward plans that recognize employee contributions and

grant enhancements.

Indulge in continuous quality improvement through TQM and HR

contributions (training, development, counseling, coaching etc.).

Utilize people with distinctive capabilities to create unsurpassed competence

in an area (Xerox in photocopier, 3M in adhesives, Telco in trucks, Britannia

in biscuits, Nestle in coffee, McDonald’s in fast foods, etc.).

Decentralize operations and rely on self managed teams to deliver goods in

difficult times (Motorola is famous for short product development cycles. It

has quickly commercialized ideas from its research labs).

Lay off workers in a smooth way, explaining facts (IBM, Kodak, Xerox,

AT&T, Steel and Textile firms in India etc.) to unions, workers and other

affected groups. HR generally plays a key role, these days, in planning and

implementing corporate downsizings, and then in maintaining the morale of

the remaining employees.

Political factors

Political stability

Formation of new political parties

Influence of politicians over Productivity linked wage agreements

Political parties sympathetic to trade unionism

Opposition to VRS schemes, downsizing operations, restructuring exercises.

Freedom to show the door to unwanted people

Social factors

Conducting business in a socially relevant and responsible way.

Hire qualified people or hire inexperienced local people and train them to

avoid trouble?

Helping economically poor people, unemployed, underprivileged ones, etc.

Local and government-related factors

Meet legislative requirements

Offering jobs to certain sections of local community

Trade unions

Demands for higher wages, better working conditions, incentives, benefits,

services

Managing workforce diversity

The workforce is becoming increasingly diverse now and organizations are doing

their best to address employee concerns and to maximize benefits of different kind

to employees with diverse educational, cultural and religious backgrounds. The

diversity issues, mainly, include the following:

Composition In terms of age, caste, education, culture, region, religion

Minority groups, economically backward groups

Displaced persons

Child labour

Contract labour

Women employees

Internal Environment and Hr

Organizations are also influenced by a variety of internal factors relating to

strategy, culture, structure etc.

Mission and Strategy

Internal Policies

Organizational Culture

Organization structure

Human resource systems

Designing appropriate HR systems

An Aging Workforce

The ministry of labour tracks changes in the composition of the Indian

labor force and forecasts employment needs.

Projections for 1996-2006, indicate the Indian labor force will have a

phenomenal growth.

Some of the expected change involves the distribution of workers by age.

Youth labor force, workers between the ages of 16-24, is expected to grow

faster than the overall labor force.

The fastest growing segment will be workers aged 45-64.

By 2015, workers aged 40 and above will exceed the number under 40 for

the first time ever.

Organizations will struggle with ways to control costs and will have to find

new ways to attract, retain, and prepare the youth labor force.

Values tend to change from one generation to another as well as during

different life stages.

Skill Deficiencies of the Workforce

The increasing use of computers to do routine tasks has shifted the kinds of

skills needed for employees in the Indian economy.

Employees must be able to handle a variety of responsibilities, interact with

customers, and think creatively.

Most organizations are looking for educational achievements and a college

degree is a basic requirement for many jobs today.

The gap between skills needed and skills available has:

Decreased ability to compete because they sometimes lack the skills to upgrade

technology, reorganizes work, and empowers employees.

High-Performance Work Systems

High-performance work systems are organizations that have the best

possible fit between their social system and technical system.

Some of the trends in today’s high-performance work systems are:

o Reliance on knowledge workers

o Empowerment of employees to make decisions

o Utilization of teamwork

Knowledge Workers

Knowledge workers are employees whose main contribution to the

organization is specialized knowledge.

The reliance on knowledge workers affects organizations’ decisions about

the kinds of people they are recruiting and selecting.

Employee Empowerment

Employee empowerment means giving employees responsibility and

authority to make decisions regarding all aspects of product development or

customer service.

HRM practices such as performance management, training, work design,

and compensation are important for ensuring the success of employee

empowerment.

For empowerment to succeed, managers must be trained to link employees

to resources within and outside the organization.

The use of employee empowerment shifts the recruiting focus away from

technical skills and toward general cognitive and interpersonal skills.

Teamwork

Teamwork is the assignment of work to groups of employees with various

skills who interact to assemble a product or provide a service.

Work teams often assume many activities traditionally reserved for

managers.

Virtual teams rely on communication technology to keep in touch and

coordinate activities.

Teamwork motivates employees by making work more interesting and

significant.

Focus on Strategy

Business Strategy: Issues Affecting HRM

Focus on Strategy

High Quality Standards:

To remain competitive in today’s economy, organizations need to provide

high-quality products and services.

Total quality management (TQM) refers to a company-wide effort to

continuously improve the ways people, machines, and systems accomplish

work.

TQM has several core values.

Mergers and Acquisitions:

Mergers: Two companies becoming one.

Acquisitions: One company buying another.

HR professionals have to sort out the differences in the two companies’

practices with regards to compensation, performance appraisal, and other

HR systems.

Downsizing:

Downsizing presents a number of challenges and opportunities for HRM.

All employees should be informed:

Why the downsizing is necessary

What costs are to be cut

How long the downsizing will last

What strategies the organization intends to pursue

HRM can provide downsized employees with outplacement services to help

them find new

Expanding into Global Markets:

In order to meet challenges, companies must

Develop global markets

Keep up with competition from overseas

Hire from an international labor pool

Prepare employees for global assignments.

Employees who take assignments in other countries are called

Reengineering:

Reengineering is a complete review of the organization’s critical work

processes to make them more efficient and able to deliver higher quality.

Reengineering affects HRM in two ways:

The way the HR department accomplishes goals may change

The HR department must help design and implement change

Outsourcing:

Outsourcing refers to the practice of having another company provide

services.

HR departments help with a transition to outsourcing and many HR

functions are being outsourced such as:

Payroll administration

Training

Recruitment

Selection

Traditional HR vs. Strategic HR

Technological Change in HRM

Advances in computer-related technology have had a major impact on the

use of information for managing HR.

A human resource information system (HRIS) is a computer system used to

acquire, store, manipulate, analyze, retrieve, and distribute information

related to human resources.

A Changing Economy

The way business is conducted has changed rapidly during the past few

years and will continue to do so.

Many companies are connecting to the Internet to gain an advantage over or

keep up with competitors.

Electronic business (e-business) is any process that a business conducts

electronically, especially business involving use of the Internet.

E-business involves several forms of buying and selling goods and services:

Business-to-consumer

Business-to-business

Consumer-to-consumer

Changes in the Employment Relationship

A psychological contract is a description of what an employee expects to

contribute and what the employer will provide the employee in exchange for

the contributions.

From the organization’s perspective, the key to survival in a fast-changing

environment is flexibility.

Flexibility in HRM includes:

Flexible staffing levels

Flexible work schedules

Changes in the Employment Relationship

Alternative work arrangements are methods of staffing other than the

traditional hiring of full-time staff.

Independent contractors

On-call workers

Temporary workers

Contract company workers

From employees’ perspective, alternative work arrangements provide some

flexibility for balancing work and non-work activities.

The globalization of the world economy and the development of e-

commerce have made the notion of a 40-hour workweek obsolete.

Offering flexible work schedules provide organizations with many benefits.