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Businesses just like a religion cannot stagnate. They need to be dynamic or else they will become history and lose place in this modern technological world. A business needs to evolve continuously to meet the needs of people. This essay discusses the same ideas and practical approach making the base for modern business and related human resources. The essay is a critical evaluation of the statement companies must reject the notion that loyalty among today's employees is dead and accept the challenge of creating an environment that will attract and energize the people so that they commit to the organization". The discussion is based on competitive challenges of the time that contemporary business faces the way companies are dealing with these challenges and competencies required by HR professionals to meet these challenges. Lastly to strengthen the arguments further some examples of companies are provided to analyze how companies are dealing with competitive challenges and the outcome.
The most prominent challenge for the day is Globalization. Globalization is a frequently used term but not precisely defined. It's a multi dimensional term involving complex processes which affects all aspects of people's lives whether intellectual, emotional, social, political, economic or cultural. It means international spread of companies like Macdonald's, Shell; it means international spread of spread of worldwide capital markets, where money can be exchanged across borders easily; it covers increased international trade and growth of international law and policies, evolving industry structures and increased price competition and developing a shared understanding about ways of living and doing business. (Francesco Sofo, 2000).
As a result of Globalization the whole world has become a single labor market. The effects of Gl0balisation include a rapidly changing and a highly competitive business environment. Because of remarkable changes in today's business scenario, rapid changes have been seen in human resource management and policies (Daft & Marcic 2001). Some of the changes are versatile training programs, mixed compensation packages, improved performance criteria and new selection and recruitment techniques. To make a place in challenging work environment organizations now face more competition to sustain (Daft and Marcic 2001). To meet these challenges organizations have developed their workforces and corporate cultures. Examples of such organizations are Coca Cola, Toyota Motors and Nokia.
The impacts of this Globalization are increasing global competition and labor market de regulation Evan, 2005; Lavelle, 2005; Silvia, 2005). Globalization has severely affected female workers, resulting they are forced to work at low pay, part time and accept temporary jobs( Gray, Kittilson & Sandoz, 2006). Now women are facing more challenges as compared to past (caribean William, 2003). Globalization has also triggered some structural and employment change in some industries. Examples are tourism & hospitality and financial industries (Jolliffe & Fansworth, 2003; Shanmugam & nair, 2003).
The second major challenge of the day is HR innovation. Innovation can be defined in multiple ways. A broad definition of innovation commonly used is 'the the process of bringing any new, problem solving idea into use. A more practical approach relates ' a process whereby new ideas are transformed, through economic activity, into sustainable value creating outcomes'. Similarly organizational innovation can be defined as adoption of an idea or behavior that is new to the organization (Dessler, Griffiths and Lloyd, 2007) Knowledge management and global knowledge economy has become a competitive environment for business and management ( De Ceiri Kramar).
According to Svieby, we can make two divisions of global business perspective that is, knowledge paradigm and old world or in other words industrial paradigm. In first group the concept of knowledge is related with the management and it flows as per organizations hierarchy. In second group production is based on knowledge workers and thus the source of information is collegian networks. Knowledge based management system is further related to the use of IT, technological innovations in manufacturing, transportation, transportation and micro processes.
The role of HRM has broadened in recent years. HRM is no longer a passive administrative body rather it has become a strategic function, also playing active role in organization's corporate planning and strategy decision making processes. It emphasizes the need that HR professionals should come out of the traditional thinking circle and become a part of corporate strategic decisions.
Continuous innovations in the field of HRM, information technology, advancements in the manufacturing techniques and supply chain methods are a remarkable challenge for the contemporary business environment that cannot be denied. Based on this perspective we can divide the organizations into two groups. One group comprising a number of leading firms today is doing well to tackle this issue. The second group comprising majority of the business still takes this issue ordinarily. This creates a gap in existing research environment that scholars need to fulfill (Magnusson et al, 2008).
E-learning is an effective way to train a large, geographically dispersed workforce that needs to be kept up to date constantly. During the last five years E-learning has become a well known method to keep the employees up dated and to provide them with necessary training. For a country like Australia where the population is much scattered, E-learning is a very effective way to train the employees. There are many advantages of using this technique. For example it is cost effective, time saving and easy way of learning. It provides the managers with an opportunity to manage their resources and judge staff expertise. Managers can themselves participate in the training process which can help them to know the staff difficulties ( www.ahri.com.au/elearning)
Third big challenge for the organizations is attracting and retaining people. Attraction means the process of gaining the attention of job seekers, and those not currently actively seeking a job, and communicating a message about the organization such that they would consider such that they would consider it a desirable place of work, in order to ensure that quality candidates will apply when a vacancy occurs. Retaining of staff is making sure that an employee intends to stay with the organization for long time. Staff turnover has never been viewed positively by organizations. In a time turnover has become even greater challenge for organizations. Retention covers activities to increased job satisfaction resulting in improved employee commitment, leading to reduced turnover (Dessler, Griffiths & Lloyd, 2007).
Recruitment of staff is always a risky process. Even after gathering and evaluating all the
Necessary information gathered in the selection process (screening, interviewing and checking references) mistakes can be made. It is not very simple and easy way of giving advertisement in news paper. The right people will not just come to you. You have to search them first and then attract them to your organization( Minnesh Kaliprasad,).
In recent years many developed countries of the world have undergone unparalleled economic expansion. Apparently it sounds good as far as economy is concerned but this enormous expansion has also played a negative role. Skills shortage is the most prominent one. This shortage of skilled workforce has forced employers to think strategically. Globalization has provided the employees with better options to think about. Organization's reputation, leadership, compensation packages, the work environment, facilities & incentives, acknowledgment of employees efforts and availability of growth chances are some of those options. These features make some of the leading companies, the employer of choice. Result of this is much lower turnover rates in such companies.
The second most important aspect of employee attraction and retention is employee engagement which demands effective HR practices. Engagement can be described as a state of emotional attachment or commitment of employees to their work. it is very important to keep the employees engaged and not get bored. Different ways are adopted by some companies to keep the employees engaged in workplace. Interesting work, employer flexibility, feeling valued, having training and advancement opportunities are top stimulants affecting employee's decisions to change a job (De Ceiri, H & Kramar, R 2008).
Another cost effective way to attract and retain employees is "offering perks". For example, casual dress, flexible office starting timings, earning time-off, job sharing or casual part time positions provide the organization with powerful advantage in the job market ( Sharon Commingham, 2002)
Another very important challenge for the organizations is sustainability. Sustainability means the ability of a company to survive in a competitive environment. For a long time in management studies, sustainability has been considered only as thought and reflection. Recent developments have highlighted the linkage between sustainability and HR issues. These recent developments which include technological developments, globalization and competitive demands have brought notable changes within and across organizations, thus entirely changing the traditional concepts of human resource management, strategy and decision making.
When discussing the link between sustainability and HRM issues, three main questions arise: a) How HR executives can manage HR supply with qualified and motivated human resources; b) How the negative impacts of HR deployment can be avoided; c) Who should take care of the measures that have to be taken.
Despite the fact that sustainability is very important issue in HR management and practice, very little attention has been paid on this issue from HR researchers (Boudreau and Ramstad, 2005; Thom and Zaug, 2004). The literature providing the link between sustainability and HRM is not up to the point. Thus it the utmost requirement of the time that this linkage should be clearly developed and understood by HR professionals, so that negative externalities of this issue can be got rid off (Thom,N. and Zaugg,R.J. 2004).
Hewlett-Packard (HP) is recognized as the leader in its field. HP is often mentioned as an employer of choice--as an organization that has implemented new and innovative HR policies to attract and retain the key talent. The company website provides all the necessary information to attract the right type of potential employees. The company website provides information about HP, its founders, a brief history and current developments (for example its recent merger with Compaq). HP's philosophy has developed from the principles developed by its founders. It includes reference to changing the world, working together and trusting colleagues. New and different ways of thinking are encouraged. The philosophy is supported by employee testimonials of their experiences working for HP. HP does not talk about its company and Compaq merger- rather it expresses it: 'the people of Hawlett Packard and the people of Compaq have joined to create the new HP. Outwardly it says that people come first at HP. A very clear picture about HP's view about diversity is provided, also describing the ways in which the diversity policy comes into action. HP's employee training and development policy talks of improving employees skills to help them achieve their ambitions. Also tells how graduate careers are developed. HP's website gives the job applicants with information about the organization, the available jobs with brief job descriptions. The information helps the potential applicants to judge whether their profile is in keeping with HP's requirements and culture (Dessler, Griffiths, walker, 2007).
Motivating employees is another challenge for HRM. With the changing workforce, managers must be highly flexible to keep all the employees engaged and motivated. It is very important for the managers to understand that each one of their employees comes with a different cultural background (Jiang Xin).
A motive can be defined as an inner drive, impulse, intention etcetera that causes a person to do something or get a certain way. In other words it is "fire in someone's belly". Every person has some motive, the most important to survive. Some people only work for paycheck on which to live. This is a very basic motive. Some people want to excel, having "fire in their belly". To motivate means to create an environment where people work toward a predetermined outcome (T Fuhrmann, 2010)
Motivation is defined as psychological force that determines the direction of a person's behavior. In today's hyper competitive market place, the correct understanding of massive correlation between employee motivation and thus organizational performance is very important. Motivation is the key for employee retention and performance. Goal of motivation is creating an environment where employees tend to stay, grow and contribute their skills and experience. Motivation is expressed in terms of employee's commitment, how hard they work and how long they stay (HR Magazine, 2010).
According to Greenberg, Herb; Sweeney, Patrick (2010), now is the time to make strong relations between leaders and top performers. Most important challenge is to make top performers and those with potential to become top performers, realize their importance for an organization. Further it is more important to keep them engaged and motivated about their future with the organization. Everything in a company for example, the product, the methodology, can be easily copied by its competitor. The only asset that cannot be copied is company's human resource and especially its top talent
Strategic plan or strategy formulation is a pathway which leads an organization in success-
Full achievement of it' mission. Strategic plan works as a template for the organization to make management decisions. HRM forecasts the future needs after analyzing the organization's current human resources, the external labor market and the future human resource environment. This forecasting provides the management with important information about the implications of different human resource strategies that can be used to support the goals of the organization (American Journal of Business Education, 2009).
As far as strategy formulation in respect of human resources in organizations concerned, five types of approaches have been adopted by the companies. These include restructuring strategies, training and development strategies, recruitment strategies, outsourcing strategies and collaboration strategies.
Restructuring strategies encompass a number of tactics. For instance, employee reduction, either by termination or by attrition, regrouping tasks to create well designed jobs and reorganizing work units to be more efficient. Training and development strategies mean providing staff with training to take on new roles. Recruitment strategies involve recruiting new staff with the skill and abilities according to the future requirements. Outsourcing strategies means using services of external personnel or companies to do some tasks. Many organizations look outside their own human resource pool and contract for certain skills. Some organizations outsource human resource activities. Some organizations develop collaboration with other organization or organizations for better success at dealing with a shortage of certain skills. This collaboration ensures developing of promising individuals and sharing costs of training/development.
When discussing the competencies required in HR professionals, it is very important to understand the meaning of the word 'competency'. Literally speaking competency means a person-related concept which refers to a set of dimensions of behavior constituting one's superior performance at work. Traditional definition of competency is ' the fundamental abilities and capabilities required by an employee in order to do a job well. A more recent and precise definition is "knowledge, skills and values that individuals draw upon to do their work well.'
Competencies are used in many aspects of human resource management. These aspects may range from recruitment and performance management to organizational strategic planning such as design of organizational structure and culture. In some companies HR executives are not involved in the process of strategic planning because they fail to display required competencies.
In order to develop the required competencies in HR professionals many surveys have been done. According to one survey computer literacy, broad knowledge, HR vision and ability to change things are the most important. Second one relates it with personal attributes, leadership style, management intuition and functional abilities. According to a most extensive survey, HR executives should be more knowledgeable about financial management, external competitive and customer demands, able to work with line managers and the community effectively ( Selmer, jan; Chiu, Randy,2004).
According to Welford, Terry (2005), there are ten critical skills areas in which HR professionals must be proficient to meet the contemporary challenges. These are self awareness; presence; service orientation; communication; presentation & facilitation; relationship building; innovation & change; and results.
"Knowing others is wisdom, knowing yourself is enlightenment" according to Lao Teu. So it is very important for HR professionals to know their strengths and weaknesses so that they can manage their mood level and effectively handle emotions under pressure. Presence means projecting a professional attitude, demonstrating accountability, being credible and trustworthy and demonstrating ethics and integrity. Service orientation implies that HR executives should anticipate, recognize, define and meet customer needs, using the tools flexibility & adaptability. Communication states that they should be able to give and receive feedback, should be able to deal with difficult people and listen to others patiently. Relationship building means they should be able to build constructive and effective relationships by treating others with respect. Relationship and change demands that they should act as change agent. Foster innovation and deal with resistance to change. When discussing results, means HR professionals should be able to solve problems and making sound decisions, plan and set goals and develop clear action plans to achieve results.
Here are some examples of the organizations dealing with the competitive challenges.
Neel-Schaffer Inc. is a company that can attract new employees and retain seasoned ones. It's an engineering firm based in Jackson. It took start 25 years ago with 20 employees. Presently it owns 400 employees in 27 offices and an annual payroll of approximately $22 million.
Ready Meador has been working with this firm as an engineering manager, for 25 years. He continued with Neel- Schaffer because company provided him with the opportunity to work on projects that can change people's life, a greatest reward for a professional according to Mr. Meador. Mr. Meador is very pleased to be part of Neel-Schaffer. He claims that although
the company has grown much and improved in service, the values the company was founded have remained the same.
Mauricka Mckenzie has recently joined the company as water resources engineer. The reason why Mckenzie joined the company is company's solid reputation for being committed to the company. Mckenzie says the company has met his expectations. It's quite obvious that the company is doing well as far as company's human resource planning is concerned. This has made the company grow and established.
Google is one of the leading companies of the globe, providing solutions to search requirements, entertainment and knowledge thirst. The company proclaims that it is not a conventional style Company. Its focus is on innovations and smart business practices. Despite the fact that company is making progress by leaps and bounds, it is committed to retain a small company feel. Every employee of the company has chances to express himself, and is considered crucial for company's success. Company provides individually tailored compensation packages comprising competitive salary, bonus, equity components, along with opportunity to earn more financial bonuses and rewards.
Google has offices throughout the world. Regardless of where the company is, it develops an invigorating, positive environment by hiring talented local people. In this way company is managing cultural diversity. The company has created a workspace full of fun and inspiration and professional development opportunities. To motivate the employees the best tool being used is appreciation. Google offers a variety of benefits to staff including a choice of medical programs, stock options, maternity and paternity leave and much more.
Innovation is company's bloodline. The company believes in the fact that even the best technology can be improved further. Company claims "we see endless opportunity to create even more relevant, more useful and faster products for our users". It's hard to deny the fact that company is the technology leader in the world's information.
A package of fringe benefits, first class dining facilities, gyms, laundry rooms, massage rooms, haircuts, car washes, dry cleaning, community buses- just about anything a hardworking employee might want. Besides these medical insurance (including dental and vision insurance) employee assistance programs, automatic and voluntary life insurance, retirement and savings plans, paid annual holiday plans and much more has been adopted to attract, motivate and retain workforce(Google.com.au).
As far as company's repute and success is concerned that is unprecedented. Google is one of the globally leading organizations. The adoption of aforementioned strategies has made it 'the organization of choice' for job seekers. It's quite obvious that company has been very successful. In June 2009, Google Australia opened Sydney headquarters.