New Trends in HRM

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New Trends in HRM

• KBL Srivastava
• Professor
• IIT Kharagpur

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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

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Introduction

• 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.

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External and internal factors influencing the
Personnel function

• External factors Internal factors
• v Technological factors v Mission
• v Economic challenges v Policies
• v Political factors v Organisational culture
• Social factors v Organisation
• 
  structure
• v Local and Governmental issues v HR systems
• v Unions
• v Employers demands
• v Workforce diversity

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HRM Activities
Attract and orient new employees
Human Resource Management
Effective compensation systems
Compliance procedures
Effective work environment
Effective relationships
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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 organisational 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

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How to deal with a human resource surplus
situation?

• Why?
• Automation
• Restructuring
• Mergers
• Acquisitions
• Competitive Pressures

• Consequences?
• Cuts payroll expenses
• Eliminates extra layers
• Improves functioning if firms product and
  service profile is good
• Shocks those left out
• Shattering impact on employee motivation and
  morale if not managed properly

• Managing Survivors of downsizing
• Bitterness, anger, disbelief and shock need to
  be handled properly
• Give information as to why the action had to
  be taken
• Tell how it is going to help the firm and
  employees in the long run.

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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, favourable 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.

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What HR managers can do ?

• Use workforce skills and abilities in order to
  exploit environmental opportunities and
  neutralise threats.
• Employ innovative reward plans that recognise
  employee contributions and grant enhancements.
• Indulge in continuous quality improvement
  through TQM and HR contributions (training,
  development, counselling, coaching etc.).
• Utilise 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,
  McDonalds in fast foods, etc.).
• Decentralise operations and rely on self managed
  teams to deliver goods in difficult times
  (Motorola is famous for short product development
  cycles. It has quickly commercialised ideas from
  its research labs).
• Lay off workers in a smooth way, explaining
  facts (IBM, Kodak, Xerox, ATT, 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.

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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.

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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

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MANAGING WORKFORCE DIVERSITY
The workforce is becoming increasingly diverse
now and organisations are doing their best to
address employee concerns and to maximise
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

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INTERNAL ENVIRONMENT AND HR
Organisations are also influenced by a variety of
internal factors relating to strategy, culture,
structure etc.

• Mission and Strategy
• Internal Policies
• Organisational Culture
• Organisation structure
• Human resource systems

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Designing appropriate HR systems

• Issue Focus on
• Nature of employment Job/Career
• Recruitment Internal/external/both
• Selection Merit/other considerations
• Training and employee 6 months/yearly develop
  ment actions Regular/irregular/need based
• Degree of participation Top down/bottom up
• Incentives Individual merit/group output
• Job security Lifelong employment/need-based
  jobs
• Employee welfare Be a model employer (offer
  those that are needed by law.)

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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.

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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,
  reorganize work, and empower employees.

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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 todays high-performance
  work systems are
• Reliance on knowledge workers
• Empowerment of employees to make decisions
• Utilization of teamwork

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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.

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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.

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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.

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Focus on Strategy

• At a growing number of organizations, HR
  professionals are strategic partners with other
  managers.
• The specific ways in which HR professionals
  support the organizations strategy vary
  according to their level of involvement and the
  nature of the strategy.

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Business Strategy Issues Affecting HRM
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Focus on Strategy

• High Quality Standards
• To remain competitive in todays 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.

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Focus on Strategy

• 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 jobs.

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Focus on Strategy

• 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 expatriates.

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Focus on Strategy

• Reengineering
• Reengineering is a complete review of the
  organizations 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

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Traditional HR vs. Strategic HR
Point of distinction Focus Role of HR
Initiatives Time horizon Control Job
design Key investments Accountability Responsibil
ity for HR
Traditional HR Employee Relations Transactional
change follower and respondent Slow, reactive,
fragmented Short-term Bureaucratic-roles,
policies, procedures Tight division of labour
independence, specialisation Capital, products
Cost centre Staff specialists
Strategic HR Partnerships with internal and
external customers Transformational change
leader and initiator Fast, proactive and
integrated Short, medium and long (as
required) Organic-flexible, whatever is necessary
to succeed Broad, flexible, cross-training
teams People, knowledge Investment centre Line
managers
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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.

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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

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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 organizations perspective, the key to
  survival in a fast-changing environment is
  flexibility.
• Flexibility in HRM includes
• Flexible staffing levels
• Flexible work schedules

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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.