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Human resource management (HRM) is the management of an organizations employees. It is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Managing human resources refers to the functions that a manager performs relative to the organizations employees. The theory of HRM argues that the goal of human resource management is to help an organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. Miller (1987) suggests that HRM relates to:
".......those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage" (p. 352).
The Human resource management (HRM) approach seeks to ensure a fit between the management of an organization's employees, and the overall strategic direction of the company (Miller, 1989). The basic premise of the academic theory of HRM is that humans are not machines, therefore we need to have an interdisciplinary examination of people in the workplace. Human resources management involves several processes. These processes can be performed in an HR department, but some tasks can also be outsourced or performed by line-managers or other departments. When effectively integrated they provide significant economic benefit to the company.
This paper describes the role of human resource management and the strategic importance is analyzed. The four major points have been explained which are the examination of the different perspectives of human resource management, review of different ways for developing flexibility within the workplace, determination of the need for equal opportunities within the workplace, and an exploration of the topical human resource practices and issues.
To have a clear understanding of the topic Pakistan Ordnance Factories (POF) has been selected. POF was founded in 1951 and is responsible for conventional weapons production, it is located in Wah Cantonnement, Pakistan. The primary objective of POF is to produce arms and ammunition for the armed forces of Pakistan. POF is given the responsibility of running the factories on sound commercial lines and utilizing any spare production capacity for meeting requirements of the civil sector and exports. POF is a government organization operating under the Defence Production Division in Pakistan's Ministry of Defence employing more than 30,000 personnel. POF produces approximately 70 major products for supply of Army, Navy and Air Force. The main products include automatic rifle; light medium and heavy machine guns, complete range of mortar and artillery ammunitions, aircraft ammunition and anti-aircraft ammunitions, tank ammunition and anti-tank ammunitions, bombs, grenades, land mines, pyrotechnics and signal stores etc.
Guest's model of hard-soft HRM
Guest (1987) and Storey (1992) in their definitions of soft and hard models of HRM view the key distinction as being whether the emphasis is placed on the human or the resource. Soft HRM is similar to the Michigan model of human resources on which the foundation of modern approach to strategic human resource management is based on. This model considers human capital as assets rather than resources. It emphasizes on organizational development, conflict management, leadership development, organizational culture and relationship building. Theses are the means of increasing trust and ensuring performance through collaboration. Soft HRM approach leads to the assumption that whatever is good for organization is also good for the employee. The concept of Hard HRM is the basis for the traditional approach towards Human Resource Management. The origin of this concept is based on the Harvard model which links workforce management to organizational strategy (Storey 1992: 29; Legge 1995 b). The functional areas such as manpower planning, job analysis, recruitment, compensation and benefits, performance evaluations, contract negotiations and labor legislations are linked to corporate strategy within Hard HRM. This theory enforces organization interests over the employees which ultimately results in conflicting ambitions and interests. Under this concept workforce is considered as a passive resource which can be used and disposed off at organizations will. Hard HRM focuses on the importance of 'strategic fit', where human resource policies and practices are closely linked to the strategic objectives of the organization (external fit), and are coherent among themselves (internal fit) (Baird and Meshoulam 1988; Hendry and Pettigrew 1986), with the ultimate aim being increased competitive advantage (Alpander and Botter 1981; Devanna et al. 1984; Lengnick-Hall and Lengnick-Hall 1990; Miles and Snow 1984; Storey and Sisson 1993; Tichy et al. 1982; Tyson and Fell 1986).
Pakistan Ordnance Factories (POF) is having a similar structure that revolves around soft and hard human resource management. At POF workforce is considered to be the productive asset and thus the responsibilities of this workforce are interrelated to an increase in organizational effectiveness. To achieve this POF needs to augment competency and adaptability of the workforce that can make the workforce competitive.
HRM from a strategic perspective and its implications for the role of the line manager and employees
Strategic human resource management has been defined as 'the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation and flexibility'. Strategic HR means accepting the HR function as a strategic partner in the formulation of the company's strategies as well as in the implementation of those strategies through HR activities such as recruiting, selecting, training and rewarding personnel. Strategic HRM consists of three major tasks. The first, which occurs during the formulation of business strategies, is to assure the extent to which HR issues and implications are fully considered as various alternatives or proposals are weighed. The second, and subsequent, task involves the establishment of HR goals and action plans -- that is to say, HR strategies -- in support of the business strategies being pursued (Dyer, 1983). And the third, and final, task is to work with line managers as principal clients to assure that established action plans are indeed implemented. For organizations to survive and success in this global and competitive village there is a need to understand the human resource strategy and the corporate strategy.
Contingency theory is a behavioral theory that claims that there is no best way to organize a corporation and the organizational structured of the company. It is defined as, "Contingency theory is guided by the general orienting hypothesis that organizations whose internal features best match the demands of their environments will achieve the best adaptation" (Scott p. 89). According to this theory the best way of organizing a company is dependent on the internal and external situation of the company.
Behavioral theories derive from behaviorism, a broad philosophical and psychological theory that explains psychological states with behavioral information. Behavioral theories are the foundation for many employee benefits or reward programs. Companies give benefits and rewards that encourage employee behavior that benefits the company. It has been observed that employees that are active are generally happier and are more focused at work. Motivation is the driving force by which we achieve our goals. Workers in any organization need something to keep them working this is human behavior which is quite naturals. Most of the times the salary of the employee is enough to keep him or her working for an organization. However, sometimes just working for salary is not enough for employees to stay at an organization. An employee must be motivated to work for a company or organization. If no motivation is present in an employee, then that employee's quality of work or all work in general will deteriorate.
In this global village and competitive market organizations need to have a direct link between HR and corporate strategies this is possible with the help of Human Resource Information System (HRIS). It is a software or online solution for the data entry, data tracking, and data information needs of the Human Resources, payroll, management, and accounting functions within a business. To reduce the manual workload of the administrative activities, organizations need to electronically automate the processes by introducing specialized Human Resource Management Systems, which can act as a competitive edge for some companies. The HRIS supports recruitment, selection, hiring, job placement, performance appraisals, employee benefit analysis, health, safety and security.
Model of Flexibility and its application in practice (Pakistan Ordnance Factory)
In order to compete in the market and to have a competitive edge over the competitors the organizations must understand and should establish a link between the corporate strategy and the workforce. A model of flexibility for strategic human resource management is shown below:
In this model Strategic HRM is represented that presents both the fit and flexibility goals. The top half of the model presents the fit component to the model, i.e., the means through which the firm seeks to fit HR practices, employee skills and employee behaviors to the immediate competitive needs of the firm as dictated by the strategy. The lower half of the model explains the flexibility component, which focuses on developing the organizational capability to respond to a variety of competitive needs other than those dictated by the current strategy.
Since the strategic objective of Pakistan Ordnance Factory is to gain a sustainable competitive edge in the marketplace for this purpose POF needs to analyze the current HR practices and need to figure out the weak areas and then POF must try to fit in the suitable HR practices which will ultimately lead to the success of the company. In terms of flexibility, POF needs to focus on increasing the capabilities of HR practices, employee skills and behaviors to provide efficient customer needs in order to meet the strategic objective.
Need for flexibility
Flexibility at work provides leading edge to the organizations. It is an important aspect that helps in adapting HR practices and strategic human resource management to meet the completive needs of the organization. To gain competitive edge organizations must ensure flexibility within the workplace. Like in case of Pakistan Ordnance Factory flexibility allows it to develop such HR systems which are adaptable to meet the competitive needs of the marketplace as dictated by strategy.
The key idea for organizations to retain their good staff is to provide a flexible workplace. This flexible workplace allows you to work with your employees to decide hours of work, work location and the way work is carried out. It involves thinking creatively about how working lives can be better structured to match individual and business needs. Creating flexibility within the workplace has a number of advantages like:
skilled and motivated employees are attracted
provides the organization with a competitive edge in recruiting
promotes higher quality of work
reduces absenteeism and staff turnover
creates greater staff loyalty and higher return on training investment
increases trust and respect
reduces stress levels and improved morale and commitment
increases management skills and finding creative ways to work
creates the potential for improved occupational health and safety records
assists compliance with anti-discrimination and workplace relations laws
greater work/life balance for employees
The disadvantages are:
The goals of employee and employer may mismatch.
In a highly competitive global economy, workplace flexibility is a benefit that can help companies rise to the top. There is an urgent need for the companies to find new ways to retain their best talent while attracting new workers. Workplace flexibility is the key to their success.
Forms of Discrimination and legislative framework
It has been said that "workers rights are human rights". The term "equal opportunities" is a broadly used phrase which promotes the idea that everyone within an organisation should have an equal chance to apply and be selected for posts, to be trained and/or promoted and to have their employment terminated equally and fairly. There should be no discrimination on the grounds of sex, homosexuality, age, racial origin, religious affiliation, disability or marital status. Discrimination means treating some people differently from others. Discrimination can take a number of forms, including illegal hiring and firing, on-the-job harassment, denial of a worker's promotions or raises and unequal pay. Equal opportunities laws aim to create a 'level playing field' so that people are employed, paid, trained and promoted only because of their skills, abilities and how they do their job.
Discrimination happens when an employer treats one employee less favorably than others. It could mean a female employee being paid less than a male colleague for doing the same job, or a minority ethnic employee being refused the training opportunities offered to white colleagues. Employers can only discriminate on the grounds of ability, experience or potential and all employment decisions taken on an individual's ability to do a particular job.
Two main forms of discrimination are: direct and indirect. Direct discrimination involves treating an individual within the workforce less favourably than others on sexual, marital, racial or disabled grounds. Indirect discrimination describes a term or condition applicable to both sexes but where one sex has considerably less of an ability to comply with it than the other. However, managing diversity is a modern phrase which is about having the right person for the job regardless of sex, race and disability. It is illegal to discriminate on the grounds of:
Pakistan Ordnance Factory is an equal opportunity employer. It employs the workforce irrespective of their caste, religion, race and ethnicity. Recruitment process is online as well and transparent with selection on the basis of merit only.
Topical human resource Practices and issues
In Pakistan Ordnance Factories, more than 30000 people are working for strengthening of the national defense. This huge human capital is engaged in supporting each other for the same national cause. It not only requires a well established HR infrastructure for recruiting and training the new human capital but also needs empowering the present employees through innovative methods of trainings for better outcomes. In POF, Human Resource is recruited and managed by the Personnel Department. Each and every year, many a people are retired from service after completing their tenure i.e. at the age 60 years or completing 25 years of service. Thus a large number of posts become vacant which are filled in on the basis of specific quota reserved for all the regions/ provinces of Pakistan. The process of selection of the right persons for the right jobs involves a chain of steps which are focused at exploring the potential individuals who can perform well in the organization in the existing scenario. This process ultimately results in appointment of the people who perform well during different steps of this recruiting process. Main steps of this process are as below;
Human Resource Planning
HR Planning links people management to the organization's mission, vision, goals and objectives, as well as its strategic plan and budgetary resources. A key goal of HR planning is to get the right number of people with the right skills, experience and competencies in the right jobs at the right time at the right cost.
Accessing the human resource needs
POF is one of the biggest organizations in Pakistan. It consists of 30000 employees all over Pakistan. The human resource needs of POF are accessed through a proper process. Before the preparation of financial budget of POF, each department sends their demand for HR. The General Manager and the different department of POF send their HR demand to their concerned Senior Executive Vice President (SEVP) e.g. requirements for the account departments are send to the SEVP of accounts. The SEVP of each department reports to the SEVP of HR. The SEVP of HR analyzes the human resource demands and justifies them through different standards. If any of the human resource demands does not match with the POF policies then these demands are rejected and the concern SEVP is informed about the rejection.
The SEVP of HR conducts a pre-board meeting before sending their HR budget to the top management. In pre-board meeting the SEVP of all departments are informed about any change or variation e.g. if number of post are increased or decreased by the SEVP of HR. After pre-board meeting the human resource budget is send to the board of Directors for the approval. In HR budget the HR department must specify the month from which the employees will be needed.
Job Analysis is a systematic exploration of the activities within a job. It is a technical procedure used to define a job's duties, responsibilities, and accountabilities. In POF, engineers, welfare officers, MBAs, doctors, IT specialists and some other professional degree holders are engaged in serving the nation. Each and every post has its own job requirements. So keeping in view, the job requirements and required basic qualifications, recruitment is done. POF conducts job analysis when;
New jobs are introduced.
Technological changes occur.
Changes occur in organizational structure.
Importance of Job Analysis at POF
POF is one of the biggest and oldest organizations in Pakistan. For the organizations like POF the job analysis is one of the most important activities, which is explained as follow:
Job analysis identifies the personal qualifications necessary to perform the job and the conditions under which work is performed. Job analysis identifies who do what.
Determine needs for new and experienced employees. Place employees in jobs that use their skills effectively In addition, job analysis can uncover tools and technologies commonly used on the job, working conditions, and a variety of other aspects that characterize work performed in the position.
Purpose of job Analysis
A job description is a written statement of what the jobholder does, how it is done, under what conditions and why. It identifies:
Major duties performed
Nature of job i.e. technical or mechanical
Number of employees doing the job
Job identification / Job Specification
Statement indicating the minimal acceptable qualifications incumbents must possess to successfully perform the essential elements of the jobs.
The process of discovering potential candidates for actual or anticipated organizational vacancies is called as recruitment. POF is a well known organization engaged in serving the nation in a better way. For this purpose, a well trained, professional and diversified human resource is required for better performance. On the basis of job analysis, recruitment for different posts is carried out to fill the vacant posts.
Although all organizations will, at one time or another, engage in recruiting activities, some do so more than other. Certain other variables will also influence the extent of recruiting. Employment condition in local community influences how much recruiting takes place. The effectiveness of past recruiting efforts will show itself in the organization's historical ability to locate and keep people who perform well.
Constraint in Recruiting Efforts
Factors that can limit recruiting outcomes are:
Internal Organizational policies
Many large organizations attempt to develop their own low-level employees for higher positions. These promotions can occur through an internal search of current employees who have bid for a job, been identified through the organization's human resource management system, or even been referred by a fellow employee.
Employee Referrals and recommendation
A recommendation from a current employee regarding a job applicant.
Organizations often open up recruiting efforts to the external community. These efforts include advertisement, employment agencies, schools, colleges and universities, professional organizations and unsolicited applicants.
When vacancies are needed to be filled the organizations announce their jobs vacancies through the advertisement. They announce the vacancies in different newspapers. Being the federal organization, all the vacancies are advertised through out Pakistan to recruit the suitable individuals/professionals from all regions/provinces of Pakistan. So POF symbolizes unity of the whole nation. Vacancies are advertised in the well read and famous newspapers (English / Urdu / local languages) all over the country to encourage the people from all areas of Pakistan to apply for.
Selection is the process used to choose individuals with the right qualifications to fill job openings in the organization. The more strategic term is placement, which means the process of ensuring that the right person is placed in the right job. Placement includes two separate but integrated concepts:
Person-job fit, this is the process of ensuring that the knowledge, skills, and abilities of the individual match the requirements of the essential functions of the job.
Person-organization fit, this is the process of ensuring that the personality and value system of the individual match the culture and objectives of the organization.
Selection at POF
After recruiting the next step is selection. POF calls short listed candidate for the selection. POF follows a standard selection pattern for top level position, it has different selection pattern for other positions.
Training and Development of Employees
The objective of training and development is to enable employees to acquire the knowledge, skills, abilities and attitudes necessary to enable them to improve their performance. Staff training and development should focus on the department's objectives and goals and staff's competencies in achieving them.
New -Employee Orientation
New employee orientation covers the activities involved in introducing a new employee to the organization and to the individuals in his or her work unit. An orientation program should familiarize the new member with the organization objective, history, philosophy, procedure, and rules; communicate relevant HRM policies such as work hours, pay procedure, overtimes requirements, and company benefits; review the specific duties and responsibilities of new member's job; provide a tour of organization's physical facilities; and introduce the employee to his\her manager and coworkers. In POF, all the selected individuals are introduced to all of the units/ groups through a comprehensive training program (3-4 months) which is specially focused at socializing the new entrants in the organization. This program consists of lectures, visual demonstrations and industrial visits. Thus these young officers become familiarized with the system being operative in the organization. Relevant rules and regulations are circulated among these officers. This intensive training program also includes hands-on experience through visits of respective groups. Relevant industries are also visited to study the comparative managerial tools which help in effective management in future.
Performance appraisal refers to a systematic description and review of an individual's job performance. Performance Management refers to the total system of gathering information, the review and feedback to the individual and storing information to improve organizational effectiveness. The employees at POF are properly trained and rotated to nurture long-term professional skills of employees. The efficient skills management also develops motivation among employees and retains them. The employee turnover system of POF reflects its skills management for employees. The employee Turnover is low for POF.
Training and Development
Training is an organized effort to increase the competence of individuals and adapt their behavior in order to pull off previously determined objectives. It is an endeavor to improve employee's abilities to make them more productive member of work force. Training, at present is a gigantic dealing. Training is worn to be more significant factor in today's organizations to accomplish its aim. It is essentially a learning process and this is supposed that to train employees therefore useful to be acquainted with something about how people gain knowledge of [Wexley & Gary, 1977]. POF believes in training the new employees as well as the existing employees in order to enhance their skills and abilities. Several training programs are conducted for the purpose of workforce planning and development of future employees.
Compensation and Benefits
POF offers competitive salary benefits along with pensions which are given after the employee is retired. Besides this stock and share benefits are also offered to the employees. A handsome salary is being offered to the workforce along with the benefits of medical, transport and accommodation facilities.
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. The role of the HR manager must parallel the needs of the changing organization. Successful organizations are becoming more adaptable, quick to change directions, and customer-centered. Within this environment, the HR professional must learn how to manage effectively through planning, organizing, leading and controlling the human resource and be knowledgeable of emerging trends in training and employee development.
With an effective human resource management system, POF is enjoying success. POF has adopted best HR practices which are suitable to its corporate strategy and thus leading to its success. POF believes and is following the theme; "Perhaps the best Return on Investment an organization will realize is the investment in their staff".