Human Resource Management and External Environment

This essay will explore the nature of Human Resource Management and External Environment as well as focus on different aspects of Human Resource Management. Human resource management is not a new concept is an adaptation and transforming of older ideas from the twentieth century about the management of people. As we know, people have been working as part of group for thousands of years. Huge numbers of workers were constructing ancient monuments, such as the pyramids or Great Wall of China. An appropriate management, motivate people, and the right strategic make the work effective and successful. In addition human resource management is defined ‘as a strategic and coherent approach to the management of an organization’s most valued assets- the people working there who individually and collectively contribute to the achievement of its objectives’ (Armstrong )

In the late 1970s organizations started to think and concern workers needs, to improve the effectiveness and maximize productivity and success of the company.

Nowadays, human resource management has become one of the most dynamic and challenging areas in business management and it has incorporates different ideas of management thinking which has developed throughout the twenties century. As we know the term ‘Human Resource Management” has been concern with the managing people, ‘all management decision and actions that affect the relationship between the organisation and employees’. (Beer et al.,1984).

Human resource management plays important part in enhancing productive work environment and successful business. By recruiting, training, developing, motivating, involvement, participation and retaining the best people, the chances are increase to accomplish organizational goals and achieve success through people. Therefore an environment of workforce is keep changing in big or small companies. Human resource management has to monitor the changes and understands the future needs to satisfy and make the employees work more meaningful and fulfilling.

It is difficult to provide a succinct definition of the subject which reflects reality. (John Storey 1995) said ‘Human resource management is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personal techniques’. In addition human resource management covers the strategy and integrated process of managing people.

‘ A strategic, coherent and comprehensive approach to the management and development of the organisation’s human resource in which every aspect of the process is wholly integrated within the overall management of the organisation, HRM is essentially an ideology’.

(Armstrong 1992)

Human resource management has involved, hard” and, soft” version. The hard version of human resource management is ‘resource’ is an adaptation of managing people, business strategy and performance. The ‘hard ‘ version of human resource management concentrate on ,, viewing people as any other economic factor as a cost that must be controlled” ( John Bratton and Jeffrey Gold 1999 )

The,, soft” version of human resource management concentrated on,, human”. Human resource management pays more attention to training and developing people to create competitive advantages for the organization through effective management of rewards and labor relation.

Human resource management is one of the concepts which involve the improvement of business organisation and performance. Informal practice and norms of behaviour interact with formal human resource policies.

‘The new HRM model is composed of policies that promote mutuality- mutual goals, mutual influence, mutual respect, mutual rewards, and mutual responsibility. The theory is that policies of mutuality will elicit commitment, which in turn will yield both better economic performance and greater human development’. (Walton 1985a)

(Figure 1.1)

As we can see on (Figure 1.1) human resource management process mainly helps the organizations measure the effectiveness and adequacy of employees. ‘Performance appraisals are a critical link in the HRM process as they assess how well employees are performing and determine appropriate rewards or remedial actions to motivate employees to continue appropriate behaviours and correct inappropriate ones.’

(Ronald R. Sims 2007)

Performance process plays important role, because it helps to monitor and understand how to increase the effectiveness of employees and the success of organizations. Human resource management very often use performance appraisals for making decision related to promotion, pay raise, demotions, training, and discharges. In addition performance process may affect the development program and may push the organization to become more active in developing career. ‘Many organization are designing career programs in an attempt to increase overall organizational performance, employee productivity and attract, develop and retain the most qualified employees in this increasingly competitive and global environment.’

(Ronald R. Sims 2007)

Healthy and Safety plays another important role. Human resource management has to make sure that the work environment is safe and health. In addition it has to be concern about hazardous substances and stress in workplace as well as it has to provide appropriate help for workers.

Legal, social and political pressures on organizations ensure that the health and Safety of their employees continue to have great impact on HRM practices. Part of the impact and concern is a result of the Occupational Safety and Health Act of 1970. (US Department of Labour, Occupational Safety and Health Administration 1985)

However to understand the nature of HRM it is important to know that HRM is a context of politics, economic, social, technological, environmental and legal factors. It is necessary to understand the various external contexts that are presumed to be driving organizational change

‘These contexts changed dramatically during the last 20 years and as a consequence, the nature of work, social relationship, and the role of work in society have taken new forms. These developments, including the recent world economic crisis pose dilemmas and create tensions for human resource (HR) managers and line managers.” (Baker and McKenzie 2009)

Human resource management has become more important because of the increased complex legal and competitive environment. Management started to realize that HRM is a concept of strategic to approach organizations.

In addition, ‘More specifically, top management began to see that HRM practices and policies significantly affected their ability to formulate and implement strategy in any area and other strategic decision significantly affected the organization’s human resource as well. As a result HRM began to be elevated to the same level of importance and status as other major functional areas of the organization’ (Ronald R. Sims 200) In addition good organization, value and supportive environment enable employees to achieve their fullest potential

The political context is more complex than any other context. The political context reflects the nature of the employment relationship and the effect on other context. The political environment is keep changing in the area of regulatory requirements. Moreover, human resource management is responsible for the selection, recruiting, training, employment legislation, human rights, pay equity, pension, healthy, safety, and industrial relations legislation. The political context may intervene in economy, equally government has the opportunity to influence economic activity and thereby change labor market trends. ‘ During the last 18 years we have witnessed a fundamental shift in the role played by central government Western hemisphere, via general economic management, labor low reform , and in its conception of ”good ,, human resource and industrial relationship management. (John Bratton & Jeffrey Gold 1999)

The economic context concentrated mainly on globalization. Globalization illustrated recent changes in the world economy and the growing integration of the world’s economies. ,, reduce trade barriers, more global capital flow, declining transportation cost, the portability of new technologies and more integrated financial market.” (John Bratton & Jeffrey Gold 1999) In addition, the changes in external context or environment shows that employers seek to influence government legislation and regulations by lobbying members of parliament.

The social context is part of external environment. Social context concentrate on conceptualization that incorporates culture, climate and political considerations to shed light on the intermediate linkages between HRM systems and organization effectiveness. Changing demographic determinate the size and composition of the workforce. Different attitudes and values relating to work, parenthood, leisure and, ”fairness organizational loyalty”

Social context play important role to employees and in the future will put more pressure on employers to pay more attention to the issue associated with a diverse workforce. In addition human resource management has to be more sensitive and pay more attention to the issues and challenges related o an ageing workforce, women, ethnic, minorities, and disabled. Therefore, social context of human resource management will focus on workers needs ensuring that everyone is equal and has the same rights to, training, developing, recruiting, and equal employment, as well as keep the balance between work and life. (Figure 3.7) It helps to maximize effectiveness and productivity and make employees work more meaningful and fulfilling.

The technology context is another aspect of external environment and reflects advanced technical change, conventional technical change and organizational change as competitive advantages through employee performance and human resource activities.

Legal complex it is another aspect of external environment.

Human resource management involve legal factors. Legal environment reflect that everyone is equal and no one is discriminate. Human resource management has to make sure that recruitment, selection, training, career and development, are equal and everyone have the same rights and opportunity of employment.

Summarize we can see that human resource management plays important role in business because it is responsible for managing people. The right management involve selection, recruitment, training and developing talented and motivated people who will represent the company on the market.

It is important to select and recruit the best and the brightest knowledge workers because they may have the first contact with the customers and they will represent the market. Regardless of what they do and how they behave will create the first impression and set up the image of the company. In addition human resource has to deliver the great expectations to build the successful and effectiveness organization trough workers. ‘HRM professionals will need to redouble their efforts to continue to forge greater alignment between HRM initiatives and the strategic objectives of the organization. To successfully meet and exceed these great expectations HRM will have to successfully navigate the avalanche of continual changes in their organizations and within HRM in the coming years, as organizations adapt to an ever- changing array of contemporary circumstances or issues, challenges, and opportunities.’ (Ronald R. Sims 2007)

Human resource activities have to base on shared understanding of people and their needs and motivations and respect to achieve the organisation’s goals and improve its performance.

As we can see, this essay has attempted to cover a wide range of complex issues. Human resource management is a political, economical, social, technological, and legal complex. The external environment of the contexts has effect, the structure, functioning of work organization and organization decision-makers. Therefore, to understand structural changes in the national economy, it is important to understand the term,, globalization”. Globalizations influence the economy and have become the fastest growing integration of the world’s economies (table 3.1). Political context reflect and establishes the relationship between workers and employer. In addition, is responsible for economic policy that influences labour makers. Social context focus on changing demographics, different attitudes and values relating to work. Social context of human resource management has to concentrate on workers needs and balance between work and life. Understanding and motivating workers help to make them work more effective to achieve success. The ‘technology’ term concentrate on the search for competitive advantage through employee performance and human resource activities.

As we can see analysing the external context of HRM is important because is related to the organisation and it may present particular opportunities and constraints in the management of human resources.

Therefore human resource management needs to integrate with managerial planning and decision making to develop the competitive strategy and reward the types of behaviour necessary for approaching and achieving the organizations success. In addition understanding workers needs helps to performance.

As we can see in last few years human mind started to fully appreciated as the primary creator of value in organization. The quality of people and their effectiveness at work will increase organizational vitality, survival and growth.

By having an effective HR department, is more chance to improve company-wide organizational effectiveness and generally create a decent place to work. However, this all depends on the firm having a ,, clear vision and a set of integrated values” With these in place, a human resource management can concern itself with the development of both the company and customer relation policies.