2. Contemporary Issues in HRM
Human resource managers face a myriad challenges with todays workforce.
There are issues concerning the diverse workforce, legislation affecting the
workplace and technology matters that rise to the top of the list of
challenges.
Major Contemporary issues in HRM are:
Green HRM
IHRM
SHRM
Chronic Health
Issues
Organizational
Development
and Change
Career
management
and
Development
Employee
Benefits and
Compensation
3. International Human Resource Management
(IHRM)
International Human Resource Management is the
process of procuring, allocatingand
effectivelyutilising human resources in an
international business.
Procuring
Allocating
Effectiveness
4. Managing expatriates
Need
for
Globalization has forced HRM to have
international orientation
IHRM
Effectively utilise services of people at
both the corporate office and at the
foreign plants
5. Models of IHRM
HR
Activities
Procure &
Utilize
Allocate
Types of
Employee
Host &
Home
Country
Third
Country
Countries
Host &
Home
Countries
Third
Countries
6. Characteristics of IHRM
More HR activities
Need for a broader perspective
More involvement in employee
personal lives
Industrial
Equal treatment to
Relations
different nationalities
Performance
Management
Compensation
Human
Resource
Planning
Employee
Hiring
Training and
Development
7. Basic Steps in IHRM
Human
Resource
Planning
Remuneration
Repatriation
Recruitment
and Selection
Expatriation
Employee
Relations
Training and
Development
Performance
Management
Multicultural
Management
8. Reasons for Growing Interest in IHRM
Globalization of
Business
Effective HRM
Movement to
network
organisation
Indirect cost of
poor performance
Significance in
implementing and
control of
strategies
9. Strategic Human Resource Management (SHRM)
Strategic human resource management
Formulating and executing HR systems that produce the employee
competencies and behaviors the company needs to achieve its strategic
aims
Taking a strategic HRM approach means:
Making human resources management a top priority
Integrating HRM with the company’s strategy, mission, and goals
“HRM can make significant contributions if included in the
strategic planning process from the outset.”
The strategic management process helps determine:
What must be done to achieve priority objectives
How they will be achieved
10. SHRM: A Key to Success
Three levels of strategy apply to HRM activities:
Strategic
(Long Term)
Managerial
(Medium
Term)
Operational
(Short Term)
The HRM activities involved are:
Employee
Selection/
Placement
Rewards
Appraisal
Development
11. SHRM: A Key to Success
Strategic HRM planning leads to:
Growth
Profits
Survival
Planning also:
Expands awareness of possibilities
Identifies strengths and weaknesses
Reveals opportunities
Points to the need to evaluate the impact of internal and
external forces
12. Traditional HRM v.s. SHRM
Point of distinction
Traditional HR
Strategic HR
Focus
Employee Relations
Partnerships with internal and
external customers
Role of HR
Transactional change
follower and
respondent
Transformational change
leader and initiator.
Initiatives
Slow, reactive,
fragmented
Fast, proactive and integrated
Time horizon
Short-term
Short, medium and long (as
required)
Control
Bureaucratic-roles,
policies, procedures
Organic-flexible, whatever is
necessary to succeed
Job design
Tight division of labor;
independence,
specialization
Broad, flexible, cross-training
teams
Key investments
Accountability
Responsibility for HR
Capital, products
Cost centre
Staff specialists
People, knowledge
Investment centre
Line managers
13. Shifts in HR management in India
Emerging HR practice
Traditional HR practice
Administrative role
Strategic role
Reactive
Proactive
Separate, isolated from
Key part of organizational
mission
company mission
Production focus
Service focus
Functional organization
Process-based organization
Individuals
Cross-functional
teams, teamwork most
encouraged, singled out for
important
praise, rewards
People as expenses
People as key
investments/assets
Human Resource Management
13
14. Strategic Management Process
Environmental Scanning
Strategy Formulation
• Corporate level
• Business unit level
• Functional level
Strategy Implementation
Strategy Evaluation
15. HR Role in Strategic Management
In strategy formulation
HR manager supplies competitive intelligence that is
useful
In strategy implementation
Encouraging proactive behavior
Explicit communication goals
Stimulate critical thinking
Productivity
Quality and Service
Proficient strategic management
23. Green Human Resource Management (GHRM)
Green HR is one which involves two essential
elements: environmentally friendly HR
practices and the preservation of knowledge
capital.Green HR involves reducing your
carbon footprint via less printing of
paper, video conferencing and interviews, etc.
24. The kinds of action taken within green HRM initiatives
include educating employees about climate change and
other environmental issues, training in working
methods that reduce the use of energy and other
resources, promoting and incentivizing more
sustainable means of travel to work (e.g. car sharing,
cycling, public transport), and auditing employee
benefits to eliminate those that are environmentally
damaging (e.g. unnecessary provision of a high
powered company car)
25. Essential Green HR Activities
Corporate
Office Building
Separate
Department
Conduct A
Research
Decreased
Printing
Recycling
Cleanliness
Drive
Reusable
Articles
Power Savings
26. Impact of Green HRM
• Gaining perception, reputation and good will.
• Economically useful, hence direct impact on
profit and enhances the return on investments.
• Better Power Utility
• Better Utilization of Resources
• Cost Effective
• Smarter Performance translated into Cheaper
Products.
27. “During the past 2 decades, a worldwide consensus has begun to
emerge around the need for pro-active environmental
management.in Response , scholars from management systems
as diverse as accounting , marketing and Supply-chain
Management have been analyzing how managerial practices in
these areas can contribute to environmental management
Goals.”
28. Companies who Have adopted GREEN HRM
General Electrics
Uses six sigma technique for optimizing their operations to
improve environmental and social outcomes in a manner that
increases overall performance.
Google
Uses green recruiting technique- Believes that most talented
people get attracted because of it.
Infosys
eRecruiting Staffing Solutions
Hewlett Packard
Product take-Back programs, green packaging and integrating
desgins.
Editor's Notes
An expatriate is an employee sent by his or her employer to work in a foreign country. The firm is normally referred to as the parent company, while the country of employment is known as the host country.Factors determining the success of expatriatesTechnical competenceRelational skillsAbility to cope with environmental variablesFamily situationReasons for expatriate failure:Inability of spouse to adjustOwn inability to adjustOther family reasonsInability to cope with larger international responsibilties.
In the last two decades there has been an increasing awareness that HR functions were like an island unto itself with softer people-centred values far away from the hard world of real business. In order to justify its own existence HR functions had to be seen as more intimately connected with the strategy and day to day running of the business side of the enterprise. Many writers in the late 1980s, started clamoring for a more strategic approach to the management of people than the standard practices of traditional management of people or industrial relations models. Strategic human resource management focuses on human resource programs with long-term objectives. Instead of focusing on internal human resource issues, the focus is on addressing and solving problems that effect people management programs in the long run and often globally. Therefore the primary goal of strategic human resources is to increase employee productivity by focusing on business obstacles that occur outside of human resources. The primary actions of a strategic human resource manager are to identify key HR areas where strategies can be implemented in the long run to improve the overall employee motivation and productivity. Communication between HR and top management of the company is vital as without active participation no cooperation is possible.
The matching modelEarly interest in the ‘matching’ model was evident in Devanna et al.’s (1984) work:‘HR systems and organizational structure should be managed in a way that iscongruent with organizational strategy’ (p. 37). This is close to Chandler’s (1962)distinction between strategy and structure and his often-quoted maxim that ‘structurefollows strategy’. In the Devanna et al. model, HRM–strategy–structure follow and feedupon one another and are influenced by environmental forces (Figure 2.6). Similarly, the notion of ‘fit’ between an external competitive strategy and theinternal HR strategy is a central tenet of the HRM model advanced by Beer et al. . The authors emphasize the analysis of the linkages between the twostrategies and how each strategy provides goals and constraints for the other. Theremust be a ‘fit between competitive strategy and internal HRM strategy and a fit amongthe elements of the HRM strategy’ (Beer et al., 1984, p. 13). The relationship betweenbusiness strategy and HR strategy is said to be ‘reactive’ in the sense that HR strategyis subservient to ‘product market logic’ and the corporate strategy. The latter isassumed to be the independent variable (Boxall, 1992; Purcell & Ahlstrand, 1994). AsMiller (1987, cited in Boxall, 1992, p. 66) emphasizes, ‘HRM cannot be conceptualizedas a stand-alone corporate issue. Strategically speaking it must flow from and bedependent upon the organization’s (market oriented) corporate strategy’. There issome theorization of the link between product markets and organizational design, andapproaches to people management. Thus, for example, each Porterian competitivestrategy involves a unique set of responses from workers, or ‘needed role behaviours’,and a particular HR strategy that might generate and reinforce a unique pattern ofbehaviour (Cappelli & Singh, 1992; Schuler & Jackson, 1987). HRM is therefore seento be ‘strategic by virtue of its alignment with business strategy and its internal consistency
This second approach to developing typologies of HR strategy is grounded in thenature of the reward–effort exchange and, more specifically, the degree to whichmanagers view their human resources as an asset as opposed to a variable cost. Superior performance through workers is underscored when advanced technology andother inanimate resources are readily available to competing firms. The sum ofpeople’s knowledge and expertise, and social relationships, has the potentialto providenon-substitutable capabilities that serve as a source of competitive advantage(Cappelli & Singh, 1992). The various perspectives on resource-based HRM modelsraise questions about the inextricable connection between work-related learning, the‘mobilization of employee consent’ through learning strategies and competitiveadvantage. Given the upsurge of interest in resource-based models, and in particularthe new workplace learning discourse, we need to examine this model in some detail.The genesis of the resource-based model can be traced back to Selznick (1957), whosuggested that work organizations each possess ‘distinctive competence’ that enablesthem to outperform their competitors, and to Penrose (1959), who conceptualized thefirm as a ‘collection of productive resources’. She distinguished between ‘physical’ and‘human resources’, and drew attention to issues of learning, including the knowledgeand experience of the management team. Moreover, Penrose emphasized what manyorganizational theorists take for granted – that organizations are ‘heterogeneous’(Penrose, 1959, cited in Boxall, 1996, pp. 64–5). More recently, Barney (1991) has argued that ‘sustained competitive advantage’ (emphasis added) is achieved notthrough an analysis of a firm’s external market position but through a careful analysisof its skills and capabilities, characteristics that competitors find themselves unable toimitate. Putting it in terms of a simple SWOT analysis, the resource-based perspectiveemphasizes the strategic importance of exploiting internal ‘strengths’ and neutralizinginternal ‘weaknesses’ (Barney, 1991). The resource-based approach exploits the distinctive competencies of a work organization: its resources and capabilities. An organization’s resources can be divided intotangible (financial, technological, physical and human) and intangible (brand-name,reputation and know-how) resources. To give rise to a distinctive competency, an organization’s resources must be both unique and valuable. By capabilities, we mean thecollective skills possessed by the organization to coordinate effectively the resources.According to strategic management theorists, the distinction between resources andcapabilities is critical to understanding what generates a distinctive competency (see,for example, Hill & Jones, 2001). It is important to recognize that a firm may not needa uniquely endowed workforce to establish a distinctive competency as long as it hasmanagerial capabilities that no competitor possesses. This observation may explainwhy an organization adopts one of the control-based HR strategies.
Bamberger and Meshoulam (2000) integrate the two main models of HR strategy, onefocusing on the strategy’s underlying logic of managerial control, the other focusingon the reward–effort exchange. Arguing that neither of the two dichotomousapproaches (control- and resource-based models) provides a framework able to encompass the ebb and flow of the intensity and direction of HR strategy, they build a modelthat characterizes the two main dimensions of HR strategy as involving ‘acquisitionand development’ and the ‘locus of control’. Acquisition and development are concerned with the extent to which the HR strategydevelops internal human capital as opposed to the external recruitment of humancapital. In other words, organizations can lean more towards ‘making’ their workers(high investment in training) or more towards ‘buying’ their workers from theexternal labour market (Rousseau, 1995). Bamberger and Meshoulam (2000) call thisthe ‘make-or-buy’ aspect of HR strategy. Locus of control is concerned with the degree to which HR strategy focuses on monitoring employees’ compliance with process-based standards as opposed to developinga psychological contract that nurtures social relationships, encourages mutual trust andrespect, and controls the focus on the outcomes (ends) themselves. This strand ofthinking in HR strategy can be traced back to the ideas of Walton (1987), who made adistinction between commitment and control strategies (Hutchinson et al., 2000). AsFigure 2.8 shows, these two main dimensions of HR strategy yield four different ‘idealtypes’ of dominant HR strategy: commitment collaborative paternalistic traditional.The commitment HR strategy is characterized as focusing on the internal development of employees’ competencies and outcome control. In contrast, the traditional HRstrategy, which parallels Bamberger and Meshoulam’s ‘secondary’ HR strategy, isviewed as focusing on the external recruitment of competencies and behavioural orprocess-based controls. The collaborative HR strategy, which parallels Bamberger andMeshoulam’s ‘free agent’ HR strategy, involves the organization subcontracting workto external independent experts (for example consultants or contractors), givingextensive autonomy and evaluating their performance primarily in terms of the endresults. The paternalistic HR strategy offers learning opportunities and internal promotion to employees for their compliance with process-based control mechanisms. EachHR strategy represents a distinctive HR paradigm, or set of beliefs, values and assumptions, that guide managers. Similar four-cell grids have been developed by Lepak andSnell (1999). Based upon emprical evidence, Bamberger and Meshoulam suggest thatthe HR strategies in the diagonal quandrants ‘commitment’ and ‘traditional’ are likelyto be the most prevalent in (North American) work organizations.It is argued that an organization’s HR strategy is strongly related to its competitivestrategy. So, for example, the traditional HR strategy (bottom right quantrant) is mostlikely to be adopted by management when there is certainty over how inputs aretransformed into outcomes and/or when employee performance can be closely monnitored or appraised. This dominant HR strategy is more prevalent in firms with a highlyroutinized transformation process, low-cost priority and stable competitive environment. Under such conditions, managers use technology to control the uncertaintyinherent in the labour process and insist only that workers enact the specified corestandards of behaviour required to facilitate undisrupted production. Managerialbehaviour in such organizations can be summed up by the managerial edict ‘You arehere to work, not to think!’ Implied by this approach is a focus on process-basedcontrol in which ‘close monitoring by supervisors and efficiency wages ensureadequate work effort’ (MacDuffie, 1995, quoted by Bamberger & Meshoulam, 2002, p. 60). The use of the word ‘traditional’ to classify this HR strategy and the use of a technological ‘fix’ to control workers should not be viewed as a strategy only of ‘industrial’ worksites. Case study research on call centres, workplaces that some organizationaltheorists label ‘post-industrial’, reveal systems of technical and bureacratic controlthat closely monitor and evaluate their operators (Sewell, 1998; Thompson &McHugh, 2002).The other dominant HR strategy, the commitment HR strategy (top left quantrant),is most likely to be found in workplaces in which management lacks a full knowledgeof all aspects of the labour process and/or the ability to monitor closely or evaluate theefficacy of the worker behaviours required for executing the work (for example singlebatch, high quality production, research and development, and health care professionals). This typically refers to ‘knowledge work’. In such workplaces, managers mustrely on employees to cope with the uncertainties inherent in the labour process andcan thus only monitor and evaluate the outcomes of work. This HR strategy is associated with a set of HR practices that aim to develop highly committed and flexiblepeople, internal markets that reward commitment with promotion and a degree of jobsecurity, and a ‘participative’ leadership style that forges a commonality of interestand mobilizes consent to the organization’s goals (Hutchinson et al., 2000). In addition, as others have noted, workers under such conditions do not always need to beovertly controlled because they may effectively ‘control themselves’ (Thompson,1989; Thompson & McHugh, 2002). To develop cooperation and common interests,an effort–reward exchange based upon investment in learning, internal promotionand internal equity is typically used (Bamberger & Meshoulam, 2000). In addition,such workplaces ‘mobilize’ employee consent through culture strategies, including thepopular notion of the ‘learning organization’.As one of us has argued elsewhere(Bratton, 2001, p. 341):For organizational controllers, workplace learning provides a compelling ideology in thetwenty-first century, with an attractive metaphor for mobilizing worker commitmentand sustainable competitiveness … [And] the learning organization paradigm can be
