Strategic Challenges In Human Resources Management Commerce Essay

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"Human Resource Management (HRM) is a strategic approach to managing employment relations which emphasizes that leveraging people's capabilities is critical to achieving competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practices." (Bratton & Gold 2007: 7).

As many countries are now allegedly coming out of recession, my task is to critically discuss from an HR perspective, that what organisations should do to best cope with the current market conditions. I will be discussing the key areas of HR practice, such as strategic planning, resourcing, development, motivation and reward. This will be done by taking into consideration that there is uncertainty regarding how stable the global market actually is, that not all countries are well placed with regards coming out of the recession, who knows when the next recession will occur? & the possible effects the recession has had on employees with regards commitment and loyalty. In particular, I will be analysing and evaluating HR practice in contemporary work situations and finally will get to a critically argued conclusions and recommendations.

Strategic planning in HR perspective mainly refers to managing the workforce (people) in a manner to secure high productivity and profitability for the organisation with minimum costs.

Below are some of the HR strategic planning's that I personally feel should be implemented by the organisations in order to maximise their productivity and profitability in the current market conditions.

Wait and See Approach for Staffing

At this point of time, the organisations are reluctant in hiring full time / permanent employees as they are still not sure if the recession is over or the worst is yet to come, so in order to be on the safer side, I would suggest that the employers should fill the vacancies with temporary / contractual staff. However, such trends will suit the financial services sector but not the areas such as engineering, nursing, construction etc where there are skills required and the demand for permanent staff remains strong. (Arkin: 2008)

Spend Time & Trouble Reassuring employees that they are valued

Since there have been massive redundancies in most of the organisations around the world (in the times of recession) (BBC: 2009). The staff that had been retained in the organisation in the time of redundancy will now be feeling insecure about their jobs as a result of which they may lose trust in management and become less productive and committed to the organization. This can be really crucial for the organisation development because nobody really knows how to prepare people for the difficult circumstances, it is a totally a new mind-set and skill set. Hence, the organisations would want to retain the resources (people) in whom they have invested such skills and make them perform even better at a higher levels. This is because no one is sure what is going to happen next. In order to regain this lost confidence in the staff the organisations should spend time and trouble towards the staff to reassure them that their contribution is valued.( Arkin: 2008)

Employee Lending

Employee lending is one of the current day- modern HR practice wherein the current employer, the lending firm, lends an employee to another employer firm for a particular period of time while continuing to pay the salary along with providing benefits (Gandolfi F: 2008). The borrowing firm, which can also be a competitor, in return can reimburse the lending firm with the part or the whole of the employee salary. There can be some employees who may not want to work for a third party. There is a risk in such a practice, and that is the borrowing firm may hire the employee permanently once the contracted period is over as a result of which, the lending firm can lose a critical knowledge base.(Gandolfi F: 2008)

Automate the HR functions via HR intranet or Web based HR Applications

Organisations can install a corporate intranet where the HR portion of the intranet has a lot of information, links and forms which allow employees to research things themselves without coming to HR. By adopting such a strategy, the organisations will save upon a lot of precious time and money as it would no longer be paying for the printing and distribution charges for such a process.(HR Focus (USA): 2005)

Rehiring Bonuses

Organisations can provide a monetary rehiring bonus for the employees that had been laid off earlier or also make them external consultants. This is because at times, the organisations cut too many and/ or the wrong employees in the time of economic downturn and now they want their skilled workforce to be back and working for them. (Gandolfi F: 2008)

Web Based Training

Training is a very important factor that plays a very crucial role towards the performance of an organisation and there is no way that the organisation can succeed without training its employees. But what organisations can do is to cut the training cost and this can be done by giving the employees web based training. By doing so, the organisation will save upon a lot of money with respect to the agency fees as the web based training can be given by using the web recruitment internet sites and they will also save upon the in house training expenses.(HR Focus(USA): 2005)


"Resourcing is the process for ensuring that the human resource requirements of an organisation are identified and plans are made for satisfying those requirements" (Bulla & Scott: 1994)

Resourcing is a very critical practice of the human resource management as the organisations should be very particular about the following two aspects:

How many people are required?

What sort of people is required?

Since the world is slowly moving out of recession, this is the right time for the organisations to hire skilled people and work on strategies to achieve competitive advantages over their rivals. There is no doubt that there is an element of risk involved in doing the same because the organisations are not really sure that now the economy will be growing or the worst is yet to come. But, they should also keep in mind that the misfortune of one organisation can act as the opportunity to other. Hence, they should rather start thinking in a more positive way and work on tasks like innovation and quality enhancement.

In order to achieve the competitive advantage, the organisations should perform the best practice HR of selective hiring / firing. They should be hiring the right kind of people and make them work in the right kind of people processes and also motivate them to achieve high performance with respect to the organisation enhancement (Bridle: 2010)

Till the recent times, organisations work really hard in developing strategies in order to retain people and gain employee commitment out of them. But, as per the recent study, it has been found that in today's world, an average graduate shifts 19 jobs in his working life (keeping in mind the standard retirement age). This means that the employees today are not really interested in being committed towards the organisation and they move on with another job every 3 years (Bridle: 2010). Keeping the current trend in mind, the organisations should reduce their efforts on employee commitment and retention and should now start working in implementing on strategies to resourcing the best skilled workforce for the organisation so that the workforce can contribute in to productivity and profitability of the organisation during the period of time in which they work for the organisation. However, by reducing the employee retention /commitment techniques, some employees who are of great importance to the organisation and want to retain with the organisation may feel de-motivated by such a practice and may decide to leave.


Training and development is one of the key human resource practices to obtain competitive advantage (Pleffer: 1994 cited in Trgaskias, Olga: 1997)

It has been researched that the investment that has been made in the area of training and development is basically linked to positive organisational outcomes (Bartel: 1994 cited in Trgaskias, Olga: 1997).Now it is the correct time for the organisations to start investing on training and development in order to make a highly skilled workforce for the organisation. A skilled workforce is really important at this point of time as the organisations are looking to work towards innovation and quality enhancement to gain competitive advantage.

The training and development along with the recruitment and selection objectives can help in attracting high quality recruits and in retention of highly skilled employees of the organisation (Blackbur & Hankinson: 1989 cited in Trgaskias, Olga: 1997).

Since the training and development practice costs a lot of money to the organisations and is also a necessary evil in the current time, hence the organisations should be looking for ways as in how to carry on the practice in a cost effective manner. To gain the maximum of the cost effectiveness the organisations the organisations should be really selective. By that I mean that, the organisation should be able to choose the potential employees whom they think can be developed into more efficient resources for the organisation's betterment. The HR department can do this by collecting the workforce data and then analyse the potential trainees.

The organisations should also take feedbacks from their employees to know what kind of training the employees think they need for the betterment of the organisation and also once the training is given, organisations should take feedbacks on the training effectives so that it can be decided weather that particular type of training be carried out for future recruits or not.


"Motivation is a process to consciously or unconsciously harness the potential of individuals, rather than to control or prescribe their behaviour" (Whitaker: 1995 cited in Hood: 2001)

The positive presence of motivation is a clear indicator of the morale of staff (Kempner: 1971 cited in Hood: 2001) and is really crucial to the effectiveness of the organisation.

Looking at the current market conditions the organisations should be able to attain its objectives of achieving competitive advantage, whilst simultaneously fulfilling the personal needs of individuals. This will result in harmony of intent and achievement for the organisation and its staff.

Culture of the organisation plays a very important role for the organisations when it comes to motivating the staff. The organisations should encourage the formation of necessary collaborative cultures which can facilitate towards the motivation of the staff.

In the current times, motivation of staff is really an important task for the organisation as most of its employees have been highly de-motivated during the times of recession. To get the motivation back in the employees, I feel the organisations should take the following measures:

The organisations should make the staff feel that their presence and work towards the achievements of the organisation is of great value and they are an asset to the organisation. This can be done by, praising the employees of their work time to time and also offering some rewards for the same. This kind of process will surely motivate the employees who faced the redundancy during the peak time of recession.

The organisations should keep in mind the Maslow's hierarchy of needs i.e. physiological, safety and security, belonging or social, esteem and status and actualisation. While taking care of these needs the organisations should also see to it that that those needs which are lower in the hierarchy must be adequately met before needs which are higher in the hierarchy because they act more as motivators. However there is a flaw in this too and that is that the unsatisfied needs act as motivators at the beginning but once they are satisfied, they cease to exert an influence as motivators.

Reward plays a very important role when it comes to motivation people. To regain the trust and motivate the staff the organisations should plan different kinds of rewards for the staff like: giving a financial reward, promotion, giving additional responsibilities, giving vouchers, giving acknowledgement as employee of the month, etc.

The management should also use the theory x and theory y to analyse which employee falls in which category because both categories of employees like different ways of motivation. For instance, those employees who fall in the theory x category like to be directed, are not really interested in assuming responsibility and they want safety above all. Whereas those who fall in the Y category, like to be challenged and given responsibility. I advice to use this theory because using a wrong theory on a wrong person can turn out to be ineffective i.e. employees can get de-motivated instead of motivated.

The culture in an organisation also plays a great part when it comes to motivating its employees. The organisations should follow a collaborative and supportive culture in order to make their employees feel comfortable and wanted at work.


"Reward refers to all the monetary, non monetary and psychological payments that an organisation provides for its employees in exchange for the work they perform" (Bratton & Gold: 2007: 360)

Reward really acts as a really great motivating factor for the employees as it encourages them to perform even better and deliver to best of their abilities towards the success of the organisation.

An organisation has three behavioural objectives with respect to reward:

Membership Behaviour to recruit and retain a sufficient number of qualified workers.

Task Behaviour to motivate employees to be flexible and perform to the fullest extent of their capabilities.

Compliance Behaviour to encourage employees to follow workplace rules and undertake special behaviours beneficial to the organisation without direct supervision and instructions, including high levels of employee commitment.(Bratton & Gold: 2007: 369)

Looking at the current market scenario, the organisations should have such reward systems that are able to attract new employees and retain the older ones. This can be achieved by giving employee's rewards like free parking, health / life insurance, schooling of kids, number of paid leaves, job security, excellent work environment and many more. Providing such rewards can be expensive for the organisation but to look at, such rewards will increase the employee commitment tremendously and hence motivate the employee to work towards the success of the organisation. (Bratton & Gold: 2007: 369-370)

Organisations can also provide rewards based on the performance of employees. They can provide a reward to an employee with short term incentives (STI's) and/or long term incentives (LTI's). Short term incentives can be rewarding with cash bonuses whereas long term incentives can be rewarding with various types of stock such as restricted stock or options (HR Focus: 2008)


After discussing the major HR practices like strategic planning, resourcing, development, motivation and rewards, I would like to conclude that since the world is just coming out of the recession, the organisations should focus on developing strategies which help them attain competitive advantage over their rivals. In order to attain this competitive advantage, the organisations should provide extensive training and development to its employees in order to make them more skilled, but, the training and development should be performed in cost effective ways. There would also be a need to recruit some skilled employees; this should be done through very selective hiring.

Also, the employees that have stayed in the organisations during the recession are very important assets to them as they have learnt to work in difficult situations. Hence, the management should give great importance to motivate such employees and retain them in the organisation and make them feel that they are valued.

Seeing the recent times of recession, a lot of people have faced redundancies, which has hence made them entirely de-motivated and less committed towards the organisations. The organisations should now take measures to re-motivate such staff and make them committed to the organisation once again. This can be done by implementing different kinds of motivating strategies and also by offering rewards to employees for being the part of the organisation and also upon their performance.