HRM and the Changing Nature of Organizations
Organizations are exposed to the challenges and opportunities posed by the increasing change and complexities in the business environment. The emergence of globalization, technical advancements, telecommunications revolution, growth of knowledge based workforce and intense competition; mandate the transformation of Human Resource Management (HRM) in organizations. 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. In this paper, first the evolution of HRM from past to present will be discussed in a theoretical concept. Then the role of human resources for organizations to gain competitive advantage and the innovations in HRM in the 21st century will be analyzed in a strategic view.
Keywords: Human Resource Management Past and Present view, Strategic Human Resources Management, Challenges OBJECTIVE The main objective of the paper is to study the Future challenges in 21st century in HRM strategic implementation of these can help the organization to stay ahead of the competition. INTRODUCTION OF HRM HRM is now often seen as the major factor differentiating between successful and unsuccessful organizations, more important than technology or finance in achieving competitive advantage.
This is particularly, apparent in the service sector where workers are the primary source of contact with customers, either face-to-face in a service encounter or over the telephone or the Internet. Even in manufacturing firms the way in which human resources are managed is seen as an increasingly critical component in the production process, primarily in terms of quality and reliability. Much of this revolves around the extent to which workers are prepared to use their discretion to improve products and services.
Human Resource Management is a process, which consists of our main activities, namely, acquisition, development, motivation, as well as maintenance of human resources. Northcott considers human resource management as an extension of general management, that of prompting and stimulating every employee to make his fullest contribution to the purpose of a business. Human resource management is not something that could be separated from the basic managerial function.
It is a major component of the broader managerial function. The role of the HR for the 21st century is named as strategically reactive in business strategy Implementation through supporting the long term strategies with the necessary employee qualifications and developing the cultural and technical capabilities required for the strategies of the organization. The need for managing the employees strategically in the 21st century also requires the management and the organization structure to be more flexible.
The work system has started to change with autonomous work groups with high qualified workforces, outsourcing some of the operational HR functions, downsizing, delayering, employee participation to the decision systems, high wages for the high qualified human resources, virtual and network organizations RISING ROLE OF HRM The role of HRM has gain more important in the year 1980. There was a complete shift from post war collectivism and towards individualism and changes in structure of economy.
Some people thought that HRM was evolved to solve union problem as there is an demand to take care of employees of an organization as a whole it performs different function. During 1990,s the success of large Japanese corporation in export market like automobiles and electronic goods took surprise to many western companies but studies says that the success of these Japanese firm is due to effective management of workforce the studies also shows that the workforce of Japanese firm are more productive and efficient than western firm.
The key to success of Japanese companies like Toyota Matsushita are the practice adopted for efficient management of workforce as these companies started opening its manufacturing plant in western countries the practice of these companies also started practiced by western companies. The practice include are: Strict and rigorous selection and recruitment High level of training, especially induction training and on the job training Team working Multitasking Better management-worker communications
Use of quality circles and an emphasis on right first time quality Encouragement of employee suggestions and innovation Single status symbols such as common canteens and corporate uniforms The reason of above practice is create an organization atmosphere where workers can grow and identify their own success and goal which match with organization. HRM PAST AND PRESENT Human Resource Management has changed over the past 40 years, taking us from the past traditional view of HRM to the present 21st-century view of HRM.
In around the mid-1970s Human Resource Manager were sometimes selected for the job because they had limited skills as an Operational Manager—they might have had less experience or been considered “a people person” rather than a “tough boss. ” Human Resource Managers were only expected to be “paper pushers” who could keep all of the Personnel files straight. They maintained organizational records on the people who worked for the company but had very little to do with the management of the organization’s business processes.
Since all they had to do was manage paper, we frequently put those with more limited skills in Personnel. In this environment, most Human Resource Departments provided limited services to the organization—keeping track of job applicants, maintaining employee paperwork, and filing annual performance evaluations. The line managers were the ones responsible for directly managing the people within the organization. Cost centers. In these types of organization, the Human Resource Department was considered to be a cost center for the organization.
What’s a cost center? In simple terms, a cost center is a division or department within the organization that brings in no revenue or profit—it only costs money for the organization to run this function. We need revenue centers instead. Revenue centers. Revenue centers are a division or department that generates monetary returns for the organization. Where cost centers eat up available funds, revenue centers provide funds for the organization to operate in the future. So, what’s a good HR Manager to do PRESENT VIEW OF HRM
The old workplace, in which managers simply told employees what to do, is gone. You will most likely work in a team and share in decision making and other management tasks. Today, people want to be involved in management, and organizations expect employees to work in teams and participate in managing the firm. Productivity centers. Welcome to the 21st century and the productivity center. A productivity center is a revenue center that enhances profitability of the organization through enhancing the productivity of the people within the organization.
Today’s Human Resource Manager is no longer running an organizational cost center. Their function, along with all other managers within the organization, is to improve organizational revenues and profits—to be a profit center. How does HR create revenue and profits for the organization? They do it through enhancing the productivity of the people within the organization. Productivity is the amount of output that an organization gets per unit of input, with human input usually expressed in terms of units of time.
We must be more competitive in today’s business environment in order to survive for the long term. As a manager of any type, we do things that will improve the productivity of the people who work for us and our organization—we create productivity centers. But, how can we become more productive? Productivity is the end result of two components that managers work to create and improve within the organization: Effectiveness a function of getting the job done whenever and however it must be done; it answers the question “Did we do the right things? ” Efficiency a function of how many organizational resources were used in getting the job done; it answers the question “Did we do things right? ” Both of these are important, but most of the time we are focused on efficiency. Human resources (our people) allow us to be more efficient as an organization if they are used in the correct manner. RISE OF STRATEGIC HUMAN RESOURCE MANAGEMENT Strategic human resource management is the process of linking the human resource function with the strategic objectives of the organization in order to improve performance of innovation flexibility and competitive advantage.
Strategic human resource management is a branch of human resource management. Strategic management is considered to be a continuous activity that requires a constant adjustment of three major interdependent poles: the values of senior management, the environment, and the resources available. . In an organization SHRM means accepting and involving the HR function as a strategic partner in the formulation and implementation of the company’s strategies through HR activities. FEATURES OF STRATEGIC HUMAN RESOURCE MANAGEMENT
Linkage of HR policy with organizational strategy in order to achieve organizational goals and objective Linkage of individual HR intervention so that they are mutually supportive. REASON FOR STRATEGIC HUMAN RESOUCE MANAGEMENT Globalization and internationalization of market integration Increased technological change Cross culture issues Increased competition Increasing new concept Strategic human resources management has gained more importance for the organizations in recent years because human resources are seen as the most valuable assets of the organizations for gaining competitive.
Human resources departments have started to play a strategic role in the organizations and all HR functions are integrated with the mission, vision and strategies of the organizations. The new HRM perspective for the 2st century requires HRM to be strategic partners of the organization that coordinates all functions and supporting the strategies by attracting and retaining the essential qualified employees. A NEW HUMAN RESOURCE MANGEMENT IN 21ST CHALLEGE In this section, we discuss some of the issues facing today’s HR Managers, including challenges, the strategic view.
HR must now be judged on whether it enhances the firm’s competitive advantage by adding real, measurable economic value as a business partner. The HR function and its processes now must become a strategic player (Beatty and Schneier, 1997). 21st century HR requires factors like; increased centrality of people to organizational success, focus on whole systems and integrated solutions, strategic alignment and impact, capacity for change. These factors are described below briefly (Ruona and Gibson, 2004).
Increased Centrality of People to Organizational Success: Undoubtedly the most powerful force affecting the evolution of HRM is the increased centrality of people to organizational success. The emergence of resource based views of organizations has placed increasing importance on intellectual and social capital. Focus on Whole Systems and Integrated Solutions: It is clear that HRM has become increasingly systematic during their evolutions. With the strategic proactive role of HRM, the challenge for HRM is to continue to develop innovative systems by focusing on the integrated functions and systems of organization.
Strategic Alignment and Impact: 21st century HR has become more integrated by its measurement efforts and it is expected that the importance of these efforts will increase in the coming years. This is all being driven by increased pressure to work on issues that are most important to the business and to provide organizational leaders with understandable information that helps them to make better and more strategic decisions about the workforce. Ultimately, it is essential to work together to enhance HR’s capacity to contribute to organizational and financial performance.
Capacity for Change: Today’s organizations must thrive in complex and unpredictable environments and must be extremely agile. This demands the development and implementation of structures and processes that facilitate incremental change. The new human resources management for the 21st century should play a strategic role by contributing the strategy formulation process and being a strategic partner during the implementation of these strategies. The HR practices should be designed consistent with the strategies of the organization taking into consideration the essential HR needs.
In parallel with these, organizations can be able to be more flexible, flat and agile in order to struggle with the changes in the competitive environment by gaining competitive advantage with their HR assets. HR professionals need to lead flatter organizations by encouraging individuals to exercise more initiative, autonomy and accountability by providing tools and techniques that improve their effectiveness and by enabling the acquisition of critical competencies through continuous learning opportunities (Schoonover, 2010).
By doing complete analysis of evolution of HRM things have reached to the conclusion that the modern trends will be occurring in HRM one of which is strategic human resource management which is mandatory for every organization to treat all employees in a well manner because they are the assets of an organization which helps in achieving organization goal.