HRM in a Changing Environment: The Challenges Essay

Today’s organizations are facing challenges upon following levels: i. Environmental Challenges ii. Organizational Challenges iii. Individual Challenges i. 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. Six important environmental challenges today are: a) Rapid change, b) Work force diversity, c) Globalization, d) Legislation, e) Technology f) Evolving work and family roles, g) Skill shortages and the rise of the service sector a) 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. Here are a few examples of how HR policies can help or hinder a firm grappling with external change: b) Work Force Diversity. All these trends present both a significant challenge and a real opportunity for managers. Firms that formulate and implement HR strategies that capitalize on employee diversity are more likely to survive and prosper. c) Globalization. One of the most dramatic challenges facing as they enter the twenty-first century is how to compete against foreign firms, both domestically and abroad. Many companies are already being compelled to think globally, something that doesn’t come easily to firms long accustomed to doing business in a large and expanding domestic market with minimal foreign competition. Weak response to international competition may be resulting in upwards layoffs in every year. Human resources can play a critical role in a business’s ability to compete head-to-head with foreign producers. The implications of a global economy on human resource management are many. Here are a few examples: Worldwide company culture Some firms try to develop a global company identity to smooth over cultural differences between domestic employees and those in international operations. Minimizing these differences increases cooperation and can have a strong impact on the bottom line. For instance, the head of human resources at the European division of Colgate Palmolive notes, â€Å"We try to build a common corporate culture. We want them all to be Colgaters.† Global alliances† Some firms actively engage in international alliances with foreign firms or acquire companies overseas to take advantage of global markets. Making such alliances work requires a highly trained and devoted staff. For instance, Phillips (a Netherlands lighting and electronics firm) became the largest lighting manufacturer in the world by establishing a joint venture with AT&T and making several key acquisitions. These illustrations show how firms can use HR strategies to gain a worldwide competitive advantage. d) Legislation Much of the growth in the HR function over the past three decades may be attributed to its crucial role in keeping the company out of trouble with the law. Most firms are deeply concerned with potential liability resulting from personnel decisions that may violate laws enacted by the state legislatures, and/or local governments. These laws are constantly interpreted in thousands of cases brought before government agencies, federal courts, state courts, and t Supreme Court. How successfully a firm manages its human resources depends to a large extent on its ability to deal effectively with government regulations. Operating within the legal framework requires keeping track of the external legal environment and developing internal systems (for example, supervisory training and grievance procedures) to ensure compliance and minimize complaints. Many firms are now developing formal policies on sexual harassment and establishing internal administrative channels to deal with alleged incidents before employees feel the need to file a lawsuit. Legislation often has a differential impact on public- and private sector organizations. (Public sector is another term for governmental agencies; private sector refers to all other types of organizations.) Some legislation applies only to public-sector organizations. For instance, affirmative action requirements are typically limited to public organizations and to organizations that do contract work for them. However, much legislation applies to both public- and private sector organizations. In fact, it’s difficult to think of any HR practices that are not influenced by government regulations. e) Technology 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. f) Evolving Work and Family Roles The proportion of dual-career families, in which both wife and husband (or both members of a couple) work, is increasing every year. Unfortunately, women face the double burden of working at home and on the job, devoting 42 hours per week on average to the office and an additional 30 hours at home to children. This compares to 43 hours spent working in the office and only 12 hours at home for men. More and more companies are introducing â€Å"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. g) Skill Shortages and the Rise of the Service Sector. Expansion of service-sector employment is linked to a number of factors, including changes in consumer tastes and preferences, legal and regulatory changes, advances in science and technology that have eliminated many manufacturing jobs, and changes in the way businesses are organized and managed. Service, technical, and managerial positions that require college degrees will make up half of all manufacturing and service jobs by 2000. Unfortunately, most available workers will be too unskilled to fill those jobs. Even now, many companies complain that the supply of skilled labor is dwindling and that they must provide their employees with basic training to make up for the shortcomings of the public education system. To rectify these shortcomings, companies currently spend large amount year on a wide variety of training programs. HRM in changing environment With the evolution of the study of HRM, it is no more mere an academic discipline rather an important factor of organizational success in the practical field. Today HRM needs to sense, respond and deal with all the issues of the organization at different levels and prove its worth. HRM has to deal with all the challenges that organization faces and these are at the following levels: †¢ Environmental Challenges (Seven) 1. Rapid Change 2. Work Force Diversity 3. Globalization 4. Legislation 5. Technology 6. Evolving Work and Family Roles 7. Skill Shortages and the Rise of the Service Sector †¢ Organizational Challenges (Four) 1. Controlling Costs 2. Improving Quality 3. Creating Distinctive Capabilities 4. Restructuring †¢ Individual Challenges 1. Productivity 2. Empowerment 3. Brain Drain 4. Ethics and Social Responsibility 5. Job Insecurity 6. Matching People and Organizations Research