Ahmad Faraz BSCS 15-04BZU sub-campus Sahiwal

HUMAN RESOURCE MANAGEMENT

Q: What are the modern challenges of HRM?

Individual challenges

Individual Challenges

Individual Challenges – address the issues relevant to individual employees

These are:- * Productivity ** Empowerment *** Brain Drain **** Ethics and Social Responsibility ***** Job Insecurity ****** Matching People and Organizations

*Productivity

(Individual Challenges)

productivity A measure of the efficiency of

a person, machine, factory, system, etc., in converting inputs into useful outputs.

Improving productivity has always been a live issue for managements. As the profitability of an organization mostly depends on improvement in productivity therefore, managers are always striving to find ways for achieving the target of improved productivity.

productivity The greater the output per individual, the higher the

organization's productivity. Two important factors that affect individual productivity are

ability and motivation. Employee ability, competence in performing a job, can be improved through a hiring and placement process that selects the best individuals for the job. It can also be improved through training and career development programs designed to sharpen employees' skills and prepare them for additional responsibilities.

Motivation refers to a person's desire to do the best possible job or to exert the maximum effort to perform assigned tasks. Motivation energizes, directs, and sustains human behavior.

A growing number of companies recognize that employees are more likely to choose a firm and stay there if they believe that it offers a high quality of work life (QWL).

**Employee Empowerment

(Individual Challenges)

Employee Empowerment

Employee empowerment is giving employees a certain degree of autonomy and responsibility for decision-making regarding their specific organizational tasks. It allows decisions to be made at the lower levels of an organization where employees have a unique view of the issues and problems facing the organization at a certain level.

Advantages to Employee Empowerment

Employee empowerment provides some distinct advantages. Employee empowerment should lead to increased organizational responsiveness to issues and problems.

Another advantage of employee empowerment should be an increase in productivity.

It should also lead to a greater degree of employee commitment to organizational goals since employees can take some degree of ownership in the decisions made toward goal achievement.

Disadvantages to Employee Empowerment

Employee empowerment is not without some disadvantages. It can lead to decreased efficiency because decisions may not be uniform and optimized for organizational goals.

It can also create problems with coordination throughout the organization because decisions are decentralized and not managed at the top.

Manager and employee relationships can become tense as the boundaries of authority can be blurred.

***Brain Drain

(Individual Challenges)

Brain Drain

A situation in which many educated or professional people leave a particular place or profession and move to another one that gives them better pay or living conditions.

OR The departure of educated or professional

people from one country, economic sector, or field for another usually for better pay or living conditions

How to stop Brain Drain

— Provide better job opportunities irrespective of caste, creed, race or nationality.

— Promote people on merit alone. — Provide attractive salaries to highly qualified

people on the basis of their qualifications and experience.

— Improve the quality of our universities and bring them at the level of universities in Europe and America.

— Provide adequate research facilities..

****Ethics and Social Responsibility

Ethics -- A set of moral principles or values that governs the conduct of an individual or a group.

 Social Responsibility -- on the other hand, is the obligations a business has over and above its legal responsibilities to the wellbeing of employees and customers, shareholders and the community as well as the environment.

(Individual Challenges)

Common ethical issues

Here are some common ethical issues that may arise in human resources: — Honesty in recruitment — Diversity — Fair pay & decent working environment — Job security — Access to ongoing training — Fairness in performance reviews — Confidentiality — Sensitivity at termination

Some social responsibility issues include: — Going above and beyond legal requirements for health and safety — Services during termination e.g. counselling, career advice, extra training — Benefits e.g. child minding facilities, fitness and wellbeing facilities

Social Responsibility Issues

Types of Social Responsibility

Economic – the duty of managers, as agents of the company owners, to maximize stockholder wealth

Legal – the firm’s obligations to comply with the laws that regulate business activities

Ethical – the company’s notion of right and proper business behavior.

Discretionary – voluntarily assumed by a business organization.

3-18

(Individual Challenges)

*****Job insecurity

Job insecurity is a chronic job stressor which impacts on the well-being of employees. Employee job insecurity has a detrimental effect on the organization. Employees who experience job insecurity are less supportive of organizational goals and do not make an effort to deliver quality work. Holm and Hovland (1999) point out that job insecurity results in an increased employee turnover rate.

Job insecurity #2

Job insecurity can be conceptualized as the overall concern about the future of one’s job. It comprises two components, namely the recognition of threats to job security and the concern about these threats. The likelihood of job loss refers to the cognitive aspect of job insecurity, while the fear of job loss is related to the affective aspect thereof. The cognitive appraisal of the future situation, whether certain or uncertain, triggers emotions based on the meaning connected to the potential job loss.

******Matching People and organizational research

Matching People and Organizations Research suggests that HR strategies contribute to firm performance most when the firm uses these strategies to attract and retain the type of employee who best fits the firm's culture and overall business objectives. For example, one study showed that the competencies and personality characteristics of top executives could hamper or improve firm performance, depending on what the firm's business strategies are. Fast-growth firms perform better with managers who have a strong marketing and sales background, who are willing to take risks, and who have a high tolerance for ambiguity. However, these managerial traits actually reduce the performance of mature firms that have an established product and are more interested in maintaining (rather than expanding) their market share.

(Individual Challenges)

Matching people and organizational research #2

Other research has shown that small high-tech firms benefit by hiring employees who are willing to work in an atmosphere of high uncertainty, low pay, and rapid change in exchange for greater intrinsic satisfaction and the financial opportunities associated with a risky but potentially very lucrative product launch

Organizational ChallengesOrganizational Challenges – concerns that are

internal to a company – effective mangers identify these issues and deal with them before they become a major issue for the company. This requires a company be proactive rather than reactive when dealing with HR issues

#Cost controlling ##Improving Quality ###Distinctive competency/capability ####Restructing

#Cost controlling If your business is under pressure to reduce

costs, you’re probably feeling it in the HR department, which has historically been seen as a cost center, not a profit center. In both boom and bust cycles, it’s more important than ever to control HR costs.

Human resource costs constitute a significant portion of the total operating costs in many industrial organizations. An overview of various types of human resource costs is given in the following Table

Costs of Human Resources:

Methods for Controlling the Costs of Human Resources

The four methods used to control the costs of human resources are as follows:

1. Management by Objectives (MBO) 2. Ratio Analysis 3. Personnel Productivity 4. Personnel Reports and Budgets.

##Improving quality.

The second way to gain a competitive advantage is to engage in continuous quality improvement. Many companies are implementing total quality management (TQM) initiatives, which are programs designed to improve the quality of all the processes that lead to a final product or service. In a TQM program, every aspect of the organization is oriented toward providing a quality product or service.

###distinctive competency/capability

A distinctive competency is a competency unique to a business organization (or a competency superior in some aspect than the competencies of other organizations) which enables the production of a unique value proposition in the function of the business. A distinctive competency is the basis for the development of an unassailable competitive advantage. The uniqueness differentiates this competency from all others, whether a core competency or simply a competency.

Sources of distinctive competency 

Distinctive competencies, the basis for competitive advantage, can come from technology, industry position, market relations, cost, business processes, manufacturing processes, people, customer satisfaction, or just being first.

The insightful integration of complementary elements of the business model is the strongest form of competitive advantage known. This is because it is so difficult for competitors to understand and even more difficult to replicate, especially when the business model elements of value, purpose, vision, culture, and identity are intertwined in a powerful business solution.

Examples of distinctive capability 

 Toyota has a distinctive competency in lean manufacturing.

GE has a distinctive competency in management development.

####Restructuring

Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring.

Restructuring

The restructuring of Human Resources is difficult as it always include the changes in the job profiles of HR employees and it includes the changes in the organizational structure of Human Resources and it affects the way, how employees do the job.

Restructuring

When planning the restructuring of HR, it is always important to find the strong project managers, who will be able to minimize the damages caused by the constant and quick changes in the HR Processes and HR Procedures. The strong project managers are able to manage and drive the process side of the HR.

The restructuring of Human Resources is not simple, but it can bring huge benefits.

Environmental Challenges

Environmental challenges refer to forces external to the firm that are largely beyond management’s control but influence organizational performance. They include: rapid change, the internet revolution, workforce diversity, globalization, legislation, evolving work and family roles, and skill shortages and the rise of the service sector.

Environmental Challenges

Environmental Challenges: forces external to a firm – influence behavior but largely beyond management’s control

@Rapid Change @@workforce diversity @@@Technological changes @@@@Legislation @@@@@Skill Shortage @@@@@@Globalization @@@@@@@Family Role

@Rapid Change

Many organizations face a volatile environment in which change is nearly constant. If they are to survive and prosper, they need to adapt to change quickly and effectively. Human resources are almost always at the heart of an effective response system.

@@workforce diversity

Similarities and differences among employees in terms of age, cultural background, physical abilities and disabilities, race, religion, sex, and sexual orientation is called workforce diversity.

@@@Technological changes

The world has never before seen such rapid technological changes as are presently occurring in the computer and telecommunications industries. One estimate is that technological change is occurring so rapidly that individuals may have to change their entire skills three or four times in their career. The advances being made, affect every area of a business including human resource management.

@@@@Legislation

The main function of the HR department is to ensure the organization is fully aware of any relevant legislation.

All policies and procedures should be in line with current legislation.

Legislation is continually being updated which makes this an ongoing task for every organization

The Main Areas Of Legislation

1- equal opportunities 2- employment protection 3- Health & Safety

@@@@@Skill Shortage

Insufficient supply of appropriately qualified workers available or willing to work under existing market conditions is known as skill shortage.

Causes of Skill Shortage

Globalization Credentialism

Responses to skill shortage

Business responses Government responses

@@@@@@Globalization Globalization is an influential modern topic that

highlights the growing interdependence between different countries worldwide, necessitating managers to appropriately incorporate this trend within their strategies.

The speed of modern globalization is often attributed to technological developments in communication and transportation, tasking managers with appropriately leveraging these technologies internally.

Globalization #2

Managers must understand that some processes can be performed universally and internationally, while others must be done in a localized fashion to adhere to each specific region's tastes and customs.

·Critics of globalization cite the way in which it motivates an international culture over established domestic ones, as well as the negative environmental effects that result from business expansion.

·Being mindful of the potential opportunities in a global economy, along with knowledge of how to localize and sidestep the negatives in an international marketplace, can capture large value for effective managers.

@@@@@@@Family Role More and more companies are introducing "family-friendly"

programs that give them a competitive advantage in the labor market. These programs are HR tactics that companies use to hire and retain the best-qualified employees, male or female, and they are very likely to payoff. For instance, among the well known organizations firms, half of all recruits are women, but only 5% of partners are women. Major talent is being wasted as many women drop out after lengthy training because they have decided that the demanding 10- to 12-year partner track requires a total sacrifice of family life. These firms have started to change their policies and are already seeing gains as a result. Different companies have recently begun offering child-care and eldercare referral services as well to facilitate women workers as well as are introducing alternative scheduling to allow employees some flexibility in their work hours.