Human resource management is a sector of an organisation which has seen its break a few years back and has developed in a fast pace in order to achieve a position in the top management level of the organisation.HRM is the backbone of an organisation. It is to note that it the near future HRM may also serve as a hub to the rest of the sectors in the company.
"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, 2006:3).
Good HR personnel should have the ability to make the right assumptions and should be able to understand the mindset of the employees for whom he works in the organisation. He should be like their boss who should solve their problems with their intercession with the management. A good HR manager should be their friend at work and should help them in their understanding towards their work and should motivate them in order to properly utilize them.
A HR executive could also become a liability to the management as well as the employees if he/she is not able to understand the work for which they have been appointed for the company. He may even be the cause of the company's failure if he is not able to assess his employees or does not understand what his employers may require.
There is one area of subject which showed the importance of HR in an organisation during its period. It was the Recession.
Recession is defined as "aÂ periodÂ of generalÂ economicÂ decline; typically defined as a decline inÂ GDPÂ for two or more consecutiveÂ quarters." http://www.investorwords.com/4086/recession.html It is marked by the downfall of the stock exchange, unemployment and the downfall of the real estate sector. It is the recession which caused the recent turmoil in the global market. It is connected to HR practices because the HR executives of the companies were put in a sour situation of sacking the employees of their jobs in order to save the organisation from closing down in the past recent years.
2. Critical Analysis
According to the sources available online and papers, the global market is still unstable. It is to be noted that some countries such as U.S.A and India have come out of recession and have posted a profit in this quarter of the year but countries like the United Kingdom are still under the great weights of recession.
U.S President Barack Obama on his last meeting said "We've begun to put the brakes on this recession and â€¦ the worst may be behind us,"Â Â "We must do more than rescue our economy from this immediate crisis. We must rebuild it stronger than before." http://www.washingtontimes.com/news/2009/aug/08/obama-recessions-worst-may-be-behind-us/
This strongly gives us the impression that U.S has far overcome the tide of recession and is planning for the betterment of the future.
U.S. Federal Reserve Chairman Ben Bernanke said " in my view there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery," http://www.huffingtonpost.com/2009/02/24/bernanke-recession-should_n_169440.html. This also says positively about the year 2010.
U.K Prime Minister Gordon Brown in his statement has said "My pledge to you is to make reform of the financial sector a reality and to see Britain's economy return to growth by the turn of the year." http://tory-politico.com/2009/10/gordon-brown-recession-2010/. It means he wanted to end the economic crisis by the end of year 2009 but is still striving. With his efforts, there is no doubt he will win against it.
According to Financial Analyst Larry Elliot of The Gaurdian "The economyÂ ended six straight quarters of declineÂ by growing in the final three months of 2009. By all of 0.1%." http://www.guardian.co.uk/business/2010/jan/26/economic-growth-uk-recessionThis gives us hope that UK is slowly coming out of recession hence giving options for recruitment. In other words, giving work for HRM.
3. HR Practices
3.1 HR strategy & planning
"There is and always was a gradual evolution of personnel management. I see HRM as just the latest stage of this evolution. Personnel management is becoming a part of the overall business strategy and this is reflected in the use of the term HRM rather than the use of the term personnel management" (Grant and Oswick 1998: 185)
This suggests that HRM took its inception into the world because of the strategic influence it had on an organisation. HR strategy is nothing but "a combination of policies, practices and processes which influence the behaviour of individuals and the firm as an entity." (John Storey 2002:61)
HR strategies can either be Universal or Matching. In our topic we discuss about the global market at the current situation, half the nations have come out of recession and the other half is undergoing the economic turmoil. In this situation Universal HR strategies are difficult to be implemented. Therefore Matching HR strategies for their respective nations can be formulated.
In theory there are two kinds of HR methods,
The Best Practice Method
The Best Fit Method
The Best Practice Method, at this point of time is best suited for the companies in regions which are still under the recession.
It is so because it is so simple and mechanistic.
During the recession labour costs are said to be low.
Status differentials are reduced.
The Best Fit Method is widely recognised and widely accepted for its inception is based on the organisation achieving a competitive advantage over the other market players. The Best Fit models or the Contingency models are of many kinds, the ones we take into consideration in this paper are
Control Based Model
Control Based Model is a type where the HR strategy is based on or written on the basis of the company's overall competitive advantage over the market. It suggests that organisations "obtain sustained competitive advantage by implementing strategies that exploit their internal strengths, through responding to environmental opportunities, while neutralising external threats and avoiding weaknesses"(Barney,1991:99).
It integrates management control model with the reward effort exchange. It focuses on two important aspects Acquisition and Development and Locus of Control. It is roughly categorized as
In this situation it is best advised for the organisations which are out of recession to use the Commitment HR strategy because during the recession the company would have lost commitment and loyalty of the employees due to their stringent measures such as redundancy. If the above mentioned HR strategy is used there is a possibility that the company's overall performance is increased in the market level and the trust level may increase between the employer and the employees. Again this depends on the organisation.
"the process of matching future organisational requirements with the supply of properly qualified, committed and experienced staff in the right place at the right time. These staff can be drawn from both the internal and external markets" (Marchington and Wilkinson 2000:90).
One line to explain this context in simple is to say Right Job for the Right Person. During the recession the HR department were put in the tough and grave task of stripping down the employees of their jobs. But now the situation has changed and now companies are in need of more staff than there were before and during recession. As a HR employee one can assess in various ways the employee resourcing for the near future. Some of them are given below:
Can go through the future market trends and requirements.
Can be specific on the number and type of staff required for the next few years based on the products to be introduced.
Can develop a plan to retain a number of existing personals.
Analyze the external market
A fixed plan or policy for recruitment.
Techniques to be followed may be
External: to bring in employees from the external market to suit the needs.
Internal: to do internal promotion on the employees.
In this situation, it is better if both Internal and External techniques are followed for the betterment of the organisation. If both are followed the existing employees who with the organisation survived the recession will be more committed and loyal and engaged to the organisation if promotions come their way. Same way new candidates who are recruited will be helpful in the company's growth in the global market.
Employees resourcing too have their disadvantages, it results in
Resistance from the internal market may be high
They may often result in a waste of resources (time, money and effort).
Clash of decision between the HR officials and management side.
3.3 Training and Development
This aspect is wholly a HR initiative because for a company to survive in the global market either it has to be monopoly or have a competitive advantage over the market. It is impossible for a company to be in a monopoly position in today's global trend so for the organisation to have a competitive advantage it should be
Improve their existing products
Maintain their quality and standards
For an organisation to match the above criteria it must be technically skilled and be trained up to date. This brings in the training and development aspect of HR.
"the skilful provision of learning experiences within the workplace in order that performance can be improved" (Harrison 1992:4).
Not necessarily the workforce should be trained technically. They must learn to work in a team working environment. HR should be able to bring out a new way to train the staffs on new assignments and should teach them new skills literally. The work of a HR exec should be to dot out a plan to achieve the above mentioned goals and tasks. For this, the HR exec should take into consideration
Human Resource strategy
Analysis of needs
If the above mentioned criteria are kept in mind while designing a Human Resource Development process, it is easy for an organisation to achieve a growth globally. Doing this will implicate in
Training becoming a part of appraisal and promotion process.
Company being up to date in this ever changing global environment
Becomes the strength of the organisation (knowledge capital).
It also has its negative sides which results in the management style being affected because due to appraisals many applicants enter into the manager roles leaving less room for the labour activities.
3.4 Motivation Techniques
In today's changing world, motivation in employees plays a major role in the organisational growth. In theory there are many motivational techniques written and given.
What is motivation?
Motivation is defined as the "willingness to exert effort to acheive the organisation's goals, conditioned by this efforts ability to satisfy individual need" (Robbins & Coulter, 1996).
There are many theories surrounding motivation techniques. Some of them known commonly are
Content Theory discusses about the various issues which will have appositive effect on the employees which when at the right time utilised to satisfy their needs.
Some examples of content theory are
Maslow's Hierarchy of Needs
Herzberg's Hygiene Motivation Factors
Process theory is based on the assumption that employees will have an affinity or interest towards a certain kind of behaviour which will result in a feasible outcome.
Two main types of process theory are
Equity Theory is one in which the employees are provided with a share in the company's share index. It may be useful in some cases but in many cases it is fruitless.
Goal theory is one in which each employee or a team of employees who are responsible for the completion of a product on a deadline are rewarded.
The above discussed theories simply come under Attitude motivation or Incentive motivation types.
In this present scenario where the global market is slowly coming out of recession, it is best suited for the company to follow both the Attitude motivation and Incentive motivation techniques. Attitude motivation technique should be followed throughout the process to keep the employee in a steady mind and the Incentive motivation technique towards the end to reward the employee for his/her work.
3.5 Employee Rewards
Employee rewards are the compensations given by the company to its employees for spending extra of their time to accomplish a particular job to meet its deadline. It can be both financial and non-financial.
In the case of financial rewards, it may be the bonuses the management pays. This method is followed in most of the countries. It acts has a motivational factor for those employees who are the sole bread winner of his family. It attracts that sector of workforce.
As for the non-financial rewards, it may be
In this situation, both the financial and non-financial rewards can be utilised in an organisation depending on the needs of the employees.
When reward programs are introduced in an organisation it serves as a motivational factor among the employees thus enabling them to strive hard to compete for their rewards.
"A performance appraisal assures a periodic opportunity for communication between the person who assigns the work and the person who performs it, to discuss what they expect from each other and how well those expectations are being met. Performance appraisals are not adversary proceedings or social chitchat. They are an essential communication link between two people with a common purpose. Leading these discussions is not always easy, but the principles and techniques for effective sessions can be learned and applied by everyone. Some clues that will lead you toward success are included on the next page along with some pitfalls that lead to failure."(Maddux 2000:11)
Appraisals are either one-to-one conversations or a meeting of a group with its leader where they discuss:
Clear expectations towards success
Performance of individual staff is recognised
Problem solving session
Leader personally evaluates the individuals commitment and engagement towards work
"A good performance appraisal leaves both parties feeling they have gained something." (Maddux 2000:13)
On seeing the above conditions, it is suggested that appraisals maybe conducted on a regular basis in an organisation. The positive effects it has on the employees are they will understand on what basis they are being evaluated and will work hard to live up to the expectations of the employers.
The advantages the employers will have are:
Will give valuable insights into the work being done.
Communication between the staff will be good
Rewards or firing may take place based on the employee's performance.
The disadvantages it may have are
They may be time consuming
They are not cost effective.
3.7 Flexible Working
In order to survive in the global market, the company has to be more customers responsive rather than being product based. To provide the customer with the product which they wish to buy, companies were forced to work out new production work techniques known as flexible working. It saw the rise of service based industries. Flexible workings were based on customer satisfaction and product development which involved high skilled labour rather than the old fashioned unskilled labour.
Some of the basic types of flexible working are
In the situation at hand, it is suggested flexible working patterns are followed. They result in cost efficient methods of production. They too have their disadvantages. They result in lower level of commitment from workers. As a HR executive, it is their decision to decide what kind of flexible working conditions can be implemented on their workforce. While deciding the suitable flexible working patterns, the HR personnal should have the following criteria in mind:
Analysis of the task to be undertaken by the workforce
The structure and staff resourcing
Cost related issues
Duration of the task
Impact on the employees.
3.8 Commitment and Loyalty
This is the most important aspect a HR executive should be sound in. They must be able to rekindle the fire of commitment and loyalty in the hearts and minds of the employees. As for the employees they have just undergone serious pressure due to the recession and are still undergoing its consequences. Some of them were fired from their jobs, some stripped of their positions, some had a cut in their salaries and some even had to undergo psychological tension both at home and workplace. It is the job of HRM to gain back their trust for the company and plan their future. It may be done by following the above mentioned process right from HR strategy to flexible working patterns. In this way the company will also gain back the trust from the employees and the employees will be happy because they are paid on their individual performance based on the HR evaluation.
4. Conclusion & Recommendations
This report is prepared keeping in mind
The changing trends in the world i.e. the Modern World.
HR's strategy alignment with the organisation
HRM in the global market
In this report from the HR perspective, HR techniques to be followed throughout the world at this time when the world is slowly coming out of the economic downturn are discussed critically and analysed.
It is analysed that HRM plays a major role in the upcoming of an organisation. In future, HRM may be present in all sectors of business if the world acknowledges its importance as soon as possible. Failing which can result in the downturn of the market again in the name of recession. Different methods and patterns of HR functions are discussed above which may help the organisations. Again it depends on the type of organisations which may use these.
Recommendations are purely based on the above report. In ways HR practices throughout the world can be improved for the betterment in the future. Certain time consuming processes can be shortened. More HR practices can be introduced. Some type of proper training for HR professional can be offered for their betterment as well as the future growth of the organisations with which they may work. This may even constitute to the organisation's growth if used in a proper way.