Challenges of Human Resource Management

Punjabi University
School of Management Studies

Assignment Paper for the Fulfillment of the course on Management of
Human Resource

Prepared by: MekuanintAbera
Roll number: 130423543

Punjabi, Patiala
March, 2014

Table of contents

pages

Challenges of Human Resources Management ......................................................... 3
1.0 Introduction ........................................................................................................................................ 3
2.0 CHALLENGES OF HRM IN MODERN MANAGEMENT ........................................................................... 6
2.1 Globalization ................................................................................................................................... 6
2.2 Workforce Diversity ........................................................................................................................ 7
2.3 Technological advances .................................................................................................................. 8
2.4 Changes in political and legal environment .................................................................................... 8
2.5 Changes in the Economic Environment .......................................................................................... 8
2.6 Revolution in Information Technology ........................................................................................... 9
2.7 Organizational Restructuring .......................................................................................................... 9
3.0 Mobility of Professional Personnel ................................................................................................... 10
4.0 Strategies for Changes ...................................................................................................................... 11
5.0 Growing Importance of HRM ............................................................................................................ 11
6.0 Nature of HRM: ................................................................................................................................. 11
7.0 Factors Contributing to the Growing Importance of HRM ............................................................... 12
7.1Accommodation to workers' needs ............................................................................................... 12
7.2 Increased complexity of the Manager’s job.................................................................................. 12
7.3 Legislation and litigation ............................................................................................................... 12
7.4 Consistency ................................................................................................................................... 13
7.5 Expertise........................................................................................................................................ 13
7.6 Cost of Human Resource ............................................................................................................... 13
8.0 The New Environment ...................................................................................................................... 13
9.0 Reshaping HR .................................................................................................................................... 14
10.HR Management Activities ................................................................................................................ 15
11. Summery and Conclusion ................................................................................................................. 16
References .............................................................................................................................................. 16

Challenges of Human Resources Management
1.0 Introduction
Human beings are the most important resource in an organization. A firm‟s success depends on
the capabilities of its members. Most problems, challenges, opportunities and frustrations in an
organization are people related.
Human resources are the life blood of an organization. Despite the application of technology in
modern business management, human resources are still relevant and most adaptive resources of
the organization. The strategic values of HR stem from the fact that apart from other resources
employed in the course of production (land, capital, technology etc) which are passive, human
resources are endowed with discretionary decision-making power and thus have competitive
advantage over the other resources. Besides, HR combines other resources in the right mix to
formulate appropriate strategies for the accomplishment of the desired objectives of the
enterprise. This essential attribute of HR assist the enterprise to make rightful decisions and
respond effectively to the threats and opportunities within the environment of the organization.
Thus the enterprise depends highly on its HR for success and survival. This dependence
continuously is increasing considering the complex and turbulent nature of the business
environment of this century.
The management of HR is complex and problematic because the individuals as workers hardly
adapt or voluntarily embrace the objectives of the organization. As individuals, the employees
have needs, aspirations, motivations, desires and interests which influence their behavior at work
but unfortunately these objectives are sometimes in conflict with the corporate objectives of the
enterprise. In reconciling this conflicting interests Human Resources Management and Planning
are useful tools employed in harmonizing the needs of the employees with the goals and
objectives of the organization on a continuous basis.
In a nutshell, the primary task of HRM is to ensure that the organization HR are utilized and
managed effectively. HR practitioners are saddled with the responsibility of designing and
implementing policies andprogrammers that will enhance human abilities and improve the
organization‟s overall effectiveness. Empirical studies have shown that poor human relations at
work, neglect of staff welfare programmer and lack of motivation are often the factors that cause

industrial strife and declining productivity in the work setting. The modern day entrepreneurs
recognize that the HR are vital element in the organization and concomitantly acknowledge the
role the HR practitioners play in developing these valuable resources. To acquire and retain HR
in the organization, the HR practitioners in brief perform four critical roles:
i. Create and implement policies, which should be in writing and communicated to all employees
through circulars or the employee handbook.
ii. Offer advice and counsel the employees on matters bordering on productivity, safety at work,
career path or management, morale, honesty and integrity, human relations etc.
iii. Provision of services that assist Line Managers in performing their jobs or serving the
organizational units i.e. recruitment, selection and placement, compensation management,
training and development, staff welfare programs, industrial and labor relations, research and
planning.
iv. Control of HR programmer and laid down procedures i.e. to monitor and ensure that HR
policies and guidelines are implemented religiously or to the letters e.g. grievance handling and
disciplinary procedures, Federal Character principles or Quota system, fairness of appraisal
exercise, granting of loans etc.
Each of the above functions is a complex flow of activities and it underscores HR management
functions as integral part of the overall corporate plans of the enterprise. It follows therefore, that
HR management function is a joint responsibility for all managers within the enterprise.
The pace of globalization is increasing continuously in terms of markets for goods and
services, investment opportunities across borders amongst others. Enterprises face
competition from all fronts. Human resource management is not left out in this
transformation crusade as it has obligation to move along with the changing demands of
the globalization process. One of the objectives of this paper is to show that effective
managers should constantly be aware of the changes taking place in domestic (home
country) environment, as well as around the globe (international and foreign environments)
on HR issues and developments. By so doing, they can scan their environment on an
ongoing basis, and when they detect opportunities and/or threats, they can transform their

organization to seize the opportunities and/or combat or neutralize the threats as the case
may be(C.Anyin.Ph.D, 2011).

Human Resources Management is one of the toughest duties of a manager since humans differ in
terms of attitudes, values, aspirations, motivations, assumptions, psychology, and life goals.
Looking at today‟s competitive world, managerial level staff will require more conceptual and
strategic skills. Thus, managers should for example ensure a suitable, relevant and up-to-date
training for specific skills of lower level employees.
Managers have to be proactive, able to anticipate technological developments and prepare their
staff for whatever technological changes that might take place.
This will be a successful task only when the HRM itself is fully aware of those changes and has
the means to deal with them.
HR managers have a number of roles to fulfill. They are the guardians of the key assets of the
organizations. They are also counselor and protector of employees and directly responsible for
productivity. The government, including the Ministry of Labor, expects HR managers not only to
comply with labor laws, but also to promote harmony at the workplace; this will directly
contribute to healthier and more attractive work environment. As a result, both job hunters and
seekers will feel compelled to target such organizations in their search for new job opportunities.
The success or failure of HR depends also on the top management recognition of the importance
of HRM, and secondly on its commitment to assist HR to carry out its functions.Human
Resources jobholders need capability, integrity and professionalism in order to succeed in the
ever-changing environment(Tannir, 2007).
HR managers are facing many challenges in present business scenario like Globalization
workforce diversity, technological advances and changes in political and legal environment
change in information technology. All these challenges increase the pressure on HR managers to
attract, retain and nurture talented employee. HR professional can‟t ignore these challenges
rather they ought to be line to design and execute innovative mechanisms of developing skills

and competencies of human resources to prepare them to accept the emerging
challenges(Srivastva, 6, July 2012).

2.0 CHALLENGES OF HRM IN MODERN MANAGEMENT
The environment faced by HR management is a challenging one; changes are occurring rapidly
across a wide range of issues. A study by the Hudson Institute, entitled Workforce 2020, has
highlighted some of the most important workforce issues. From that and other sources, it appears
that the most prevalent challenges facing HR management are as follows:
1. Economic and technological change
2. Globalization of business
3. Workforce availability and quality concerns
4. Demographics and diversity issues
5. Organizational restructuring
The environment faced by human resource is challenging one; changes are occurring rapidly
across a wide range of issues(Shahi Raz Akhtar, 2012). It appears that the most prevalent
challenges facing HR management are as follows:
2.1 Globalization

At a political and economic level, globalization is the process of denationalization of markets,
politics and legal systems i.e. the use of the so-called global economy. Globalization refers to an
extension beyond national borders of the same market forces that have operated for centuries at
all levels of human economic activity (village markets, urban industries, or financial centers). It
means that world trade and financial markets are becoming more integrated.
Growing internationalization of business has its impact on HRM in terms of problems of
unfamiliar laws, languages, practices, competitions, attitudes, management styles, work ethics
etc. HR managers have a challenge to deal with more functions, more heterogeneous functions
and more involvement in employee‟s personal life.

2.2 Workforce Diversity

According to Thomas (1992), dimensions of workplace diversity include, but are not limited to:
age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational
background, geographic location, income, marital status, military experience, religious beliefs,
parental status, and work experience.The role of the Human Resource Manager is evolving with
the change in competitive market environment and the realization that Human Resource
Management must play a more strategic role in the success of an organization. Organizations that
do not put their emphasis on attracting and retaining talents may find themselves in dire
consequences, as their competitors may be outplaying them in the strategic employment of their
human resources.
With the increase in competition, locally or globally, organizations must become more adaptable,
resilient, agile, and customer-focused to succeed. And within this change in environment, the HR
professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a
change mentor within the organization. In order to succeed, HR must be a business driven
function with a thorough understanding of the organization‟s big picture and be able to influence
key decisions and policies. In general, the focus of today‟s HR Manager is on strategic personnel
retention and talents development. HR professionals will be coaches, counselors, mentors, and
succession planners to help motivate organization‟s members and their loyalty. The HR manager
will also promote and fight for values, ethics, beliefs, and spirituality within their organizations,
especially in the management of workplace diversity.
The future success of any organizations relies on the ability to manage a diverse body of talent
that can bring innovative ideas, perspectives and views to their work. The challenge and
problems faced of workplace diversity can be turned into a strategic organizational asset if an
organization is able to capitalize on this melting pot of diverse talents. With the mixture of
talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond
to business opportunities more rapidly and creatively, especially in the global arena, which must
be one of the important organizational goals to be attained. More importantly, if the
organizational environment does not support diversity broadly, one risks losing talent to
competitors. This is especially true for multinational companies (MNCs) who have operations on
a global scale and employ people of different countries, ethical and cultural backgrounds. Thus, a

HR manager needs to be mindful and may employ a Think Global, Act Local approach in most
circumstances. With a population of only four million people and the nations strive towards high
technology and knowledge-based economy; foreign talents are lured to share their expertise in
these areas. Thus, many local HR managers have to undergo cultural-based Human Resource
Management training to further their abilities to motivate a group of professional that are highly
qualified but culturally diverse. Furthermore, the HR professional must assure the local
professionals that these foreign talents are not a threat to their career advancement. In many
ways, the effectiveness of workplace diversity management is dependent on the skilful balancing
act of the HR manager.
2.3 Technological advances

There is a challenging task of adapting workplace to rapid technological changes which
influence the nature of work and generate obsolescence Advanced technology has tended to
reduce the number of jobs that require little skill and to increase the number of jobs that require
considerable skill, a shift we refer to as moving from touch labour to knowledge work.. There is
new-new working technology. In this situation organizations have to change it technology. New
technology creates unemployment and in other hand, there comes scarcity of skilled manpower.
Like this, technological change brings difficulties and challenges in organization.
2.4 Changes in political and legal environment

Changes in political and legal environment means changes in political parties and rules
regulation due to which new laws are come and you have to follow all laws while doing
business. Many changes taking place in the legal and political framework within which the
industrial relation system in the country is now functioning. It is the duty of human resource and
industrial relations executives to fully examine the implication, of these changes and brings
about necessary adjustment within the organization so that later utilization of human resource
can be achieved. It is the responsibility of Human Resource manager to anticipate the changes
and prepare organization to face them without any breakdown in its normal functioning
2.5 Changes in the Economic Environment

This includes examination of the impact of a number of factors on production. Some of the key
factors are the scarcity of raw materials and other inputs including power and electricity,
encouragement of the culture of consumerism, increasing consumer awareness and demand for
quality products, continuing upward trend in the inflationary pressures with decrease in the

purchasing power of rupee and its spiraling effects in the ever increasing aspirations of workers
for higher wages and other material benefits and mounting costs on the employee welfare and
other benefits. In an inflationary economy, the resources tend to become scarce and the costs of
machine, materials and labour multiply. These push up the capital and running costs.
2.6 Revolution in Information Technology

Information technology has influenced HRM through human resources information systems
(HRIS) that streamline the processing of data and make employee information more readily
available to managers. More recently, there has been and in the future there will be impact of
revolutionary computerized information system in the management it covers two primary areas
Application of computer in the managerial decision making process
1. Use of electronic computers managerial decision making process
2. In future computerized information system will have increasing impact at the coordinate and
strategic levels of organization
2.7 Organizational Restructuring

Many organizations have restructured in the past few years in order to become more competitive.
Also, mergers and acquisitions of firms in the same industries have been made to ensure global
competitiveness. The “mega-mergers” in the banking, petroleum, and telecommunications
industries have been very visible, but mergers and acquisitions of firms in many other industries
have increased in recent years. As part of the organizational changes, many organizations have
“rightsized” either by (1) eliminating layers of managers, (2) closing facilities, (3) merging with
other organizations, or (4) outplacing workers. A common transformation has been to flatten
organizations by removing several layers of management and to improve productivity, quality,
and service while also reducing costs. As a result, jobs are redesigned and people affected. One
of the challenges that HR management faces with organizational restructuring is dealing with the
human consequences of change. The human cost associated with downsizing has been much
discussed in the popular press: a survivor‟s mentality for those who remain,
unfulfilled cost savings estimates, loss of loyalty, and many people looking for new jobs.
Whereas many large firms have cut jobs by reducing their workforces, many smaller firms have
continued to create jobs. This is particularly true in high technology industries, such as software

development. These entrepreneurial firms are faced with growth, while trying to attract sufficient
workers with flexible capabilities and to conserve financial resources. More discussion on HR‟s
role in organizational restructurings is found in Chapter 2, focusing on strategic HR planning.
Consequently, in both large and small organizations the management of HR activities is crucial.

3.0 Mobility of Professional Personnel
One of the interesting facts will be increase in the mobility of various managerial and
professional personnel between the organizations. As individual develop greater technical and
professional expertise, their services will be greater demand by organization in the environment.
How can we overcome with these challenges?
1. Cross cultural training of HR personnel so that they understand other cultural people
2. Motivate Professional personnel more and more so that do not change organization more
frequently financial motivation is not always required you can motivate through non-financial
motivation like encouragement, training of employee, job satisfaction
3. HR should adopt the change at internet speed.
4. Shifting HR strategy with changing economy – strategy of HR should be agile, capable of
flexing and adaptive to changes in the economy.
5. Technical changes in the workplace often require the implementation of additional training for
workers. As training and development is generally the realm of the HR department, this creates
yet another challenge for human resource managers. HR must first determine what training is
necessary and then implement training measures to ensure all workers can keep up with technical
changes. Human resource managers must also determine when it may train existing employees,
and when it must search for new workers to fill technical positions within the organization
6. Training of HRIS – Human resource information system should be given to the HR managers
or HR professional so that they can overcome Information Technology challenges.
7. Proper performance evaluation system and proper career development plans should be used in
the organization to reduce professional mobility.

4.0 Strategies for Changes
The first corner stone to achieve is the development of new initiatives, programs and
agendas. Human Resources must move beyond being the “police of policy” and “regulatory
guard”. Instead, HR must be the pioneers in assisting the organizations achieve results,
especially by helping employees to enhance their capabilities to ensure organizational
objectives are met.
The future of HR depends on its ability to align HR with the changes that are happening in
the workplace and the economy. New models of competitiveness are needed so that
organizations can better service their customers. Consequently HR must be the champions to
help gear employees to provide added value.
The new approach of HR is to emphasize new mindsets and new ways of thinking about
business instead of sticking to policies and bureaucratic patterns. HR professionals should
and must focus on cultural change, and the development of human capital, especially in
international organizations. „Think globally. Act locally”.
HR should sponsor a model of change, which will help the employees adapt to and be
comfortable with changes. Here, a lot of question may arise, such as: How do we decide
which practices to be transformed and which should be kept for purpose of continuity? How
do we change and learn rapidly? How do we honor the past yet change the future? How do
we capture the hearts and minds of employees?

5.0 Growing Importance of HRM
The success of organizations increasingly depends on people-embodied know-how- the
knowledge, skill, Attitude.

6.0 Nature of HRM:
 HRM involves management functions like planning, organizing, staffing, directing
and controlling.
 It involves procurement, development, maintenance and management of human
resource.
 It helps to achieve individual, organizational and social objectives.

 HRM is a mighty disciplinary subject. It includes the study of management
psychology communication, economics and sociology.
 It involves team spirit and team work.
HRM plays important role in creating organizations and helping them survive. Our world is
an Organizational world. We are surrounded by organizations and we participate in them as
members, Employees, customers, and clients. Most of our life is spent in organization, and
they supply the goods and services on which we depend to live. Organizations on the other
hand depend on people, and without people, they would disappear.

7.0 Factors Contributing to the Growing Importance of HRM
7.1Accommodation to workers' needs

Workers are demanding that organizations accommodate their personal needs by instituting
such programs as flexible work schedules, parental leave, child-care and elder-care
assistance, and job sharing. The human resource department plays a central role in
establishing and implementing policies designed to reduce the friction between
organizational demands and family responsibilities.
7.2 Increased complexity of the Manager’s job

Management has become an increasingly complex and demanding job for many reasons,
including foreign competition, new technology, expanding scientific information, and rapid
change. Therefore, organizations frequently ask human resource managers for assistance in
making strategic business decisions and in matching the distinctive competencies of the
firm's human resources to the mission of the organization. Executives need assistance from
the human resource department in matters of recruitment, performance evaluation,
compensation, and discipline.
7.3 Legislation and litigation

The enactment of state laws has contributed enormously to the proliferation and importance
of human resource functions. The record keeping and reporting requirements of the laws are
so extensive that to comply with them, many human resource departments must work
countless hours and often must hire additional staff. Four areas that have been influenced
most by legislation include equal employment, Compensation, safety, and labor relations. An

organization's failure to comply with laws regulating these areas can result in extremely
costly back-pay awards, class action suits, and penalties.
7.4 Consistency

Human resource policies help to maintain consistency and equity within an organization.
Consistency is particularly important in compensation and promotion decisions. When
managers make compensation decisions without consulting the human resource department
the salary structure tends to become very uneven and unfair promotion decisions also may be
handled unfairly when the HR department does not coordinate the decision of individual
manger.
7.5 Expertise

Now days there exist sophisticated personnel activities that require special expertise. For
example, researchers have developed complex procedures for making employee-selection
decisions; statistical formulas that combine interviews, test scores, and application-blank
information have replaced the subjective interviews traditionally used in making selection
decisions. Similarly, many organizations have developed compensation systems with
elaborate benefits packages to replace simple hourly pay or piece rate incentive system
7.6 Cost of Human Resource

Human resource activities have become increasingly important because of the high cost of
personal problem. The largest single expense in most organizations is labor cost, which is
often considerably higher than the necessary because of such problems as absenteeism
tardiness and discrimination.

8.0 The New Environment
The 1990s have been called the era of Employee Empowerment. This means the management
delegates as much power and authority as possible to low level employees to enable them to
make their own decisions and participate in the managerial decision-making as well. This way,
the employees will be more motivated and productive(Biyani Girls College, 2009).
The empowerment process is effective under the following conditions:

The employee must be given adequate training and knowledge regarding his job and
responsibilities, which includes technical knowledge, decision-making skills and group
process skills.
Both employees and management share a common vision and goals, and are really
committed to achieve them.
both employees and management possess common values, in term of job implementation,
behavior standards and ethics.
Benefits and profits are to be shared together (shares, bonuses...)
Management should show and have trust in lower level employees.

9.0 Reshaping HR
The changes which affect the HR performance are:
 HR should not act as a therapy clinic
 HR must measure their outcomes
 HR practices must create value by increasing the organization‟s intellectual capital
 HR must attempt to make employees committed to achieving organizational goals,
and not merely to make employees happy
 HR practices must be aligned with company strategies
 HR must champion the needs and development of employees and yet become partners
in the business
 HR should receive corporate priority. Business firms should be ready to boost their
investment in staff development; this is rewarding on the long run if its properly
implemented
 HR should focus on the skills to be acquired taking into consideration the
understanding of the international dimensions of political, economic and social
development
 HR should promote the collaboration between public training institutions, the
universities and the public sector in terms of planning an effective training program.

10.HR Management Activities
The central focus for HR management must be on contributing to organizational success. The
key to enhancing organizational performance is ensuring that human resources activities support
organizational efforts focusing on productivity, service, and quality(Tyson, 2006).
Productivity:As measured by the amount of output per employee, continuous improvement of
productivity has become even more important as global competition has increased. The
productivity of the human resources in an organization is affected significantly by management
efforts, programs, and systems.
The amount of output per unit of input (labor, equipment, and capital). There are many different
ways of measuring productivity. For example, in a factory productivity might be measured based
on the number of hours it takes to produce a good, while in the servicesector productivity might
be measured based on the revenue generated by an employee divided by his/her salary. E.G
number of cars over a specified period.example: productivity = (number of cars produced) ÷
(man-hours to produce these).
Quality: The quality of products and services delivered significantly affects organizational
success over the long term. If an organization gains a reputation for providing poor-quality
products and services, it reduces its organizational growth and performance. An emphasis on
quality requires continuous changes aimed at improving work processes. That need opens the
door for reengineering the organizational work done by people. Customer value received and
satisfaction become the bases for judging success, along with more traditional HR measures of
performance and efficiency.
Service: Because people frequently produce the products or services offered by an organization,
HR management considerations must be included when identifying service blockages and
redesigning operational processes. Involving all employees, not just managers, in problem
solving often requires changes in corporate culture, leadership styles, and HR policies and
practices.

11. Summery and Conclusion
To conclude that it can be said that HR practice is becoming more and more challenging day by
day, they have to face lot of problems like retention, attraction of employee, dealing with
different cultural people, managing work force diversity, technological and informational
changes to overcome with these challenges training (Cross cultural training and technological
and informational training) is necessary of HR people.
To reduce mobility of professional personnel HR people have to motivate them from monetary
and non-monetary techniques. Proper performance evaluation system and proper career
development plans should be used in the organization to reduce professional mobility.
Following the challenges posed by globalization, it is hoped that the HR professionals will not
only destroy the stereotype routine methods of doing job but would launch HR full potentials for
more positive contributions to employees‟ wellbeing and organization building.

References
Biyani Girls College, J. (2009). Concept Based Notes Human Resource Management. Sector-3, Vidhyadhar
Nagar,: Deptt,of Management.

C.Anyin.Ph.D, F. (2011). HRM challenges in Nigeria under a globalised Economy. International Journal
Economics and Management Science, Vol1.No,4.
Shahi Raz Akhtar, U. (2012, 08 13). The environment faced by HR management is a challenging one;
changes are occurring rapidly across a wide range of issues. A study by the Hudson Institute,
entitled Workforce 2020, has highlighted some of the most important workforce issues. From
that and . Retrieved 02 28, 2014, from WWW.Google.Com.
Srivastva, M. E. (6, July 2012). The Emergining Challenges in HRM. International Journal of Scentific
Technology Research, volume 1.
Tannir, E. (2007). Training Manager . O.G.E.R.O, 3-5.
Tyson, S. (2006). Essential of Human Resource Management. New Yourk: Elsevier Ltd.

Challenges of Human Resource Management

More Related Content

What's hot

Viewers also liked

Similar to Challenges of Human Resource Management

More from MEKUANINT ABERA

Recently uploaded

Challenges of Human Resource Management