Recent Trends in HRM

INDEX
NO. CONTENT
1 Introduction
2 External andinternal factorsinfluencingthe Personnel function
3 HRM Activities
4 Technological ChangesandHRM
5 How to deal witha human resource surplussituation?
6 Economic,Political andSocial ChallengesandHR
7 What HR managerscan do?
8 Political factors
9 Social factors
10 Local and government-relatedfactors
11 Trade unions
12 Managing workforce diversity
13 Internal EnvironmentandHr
14 DesigningappropriateHRsystems
15 An AgingWorkforce
16 Skill Deficienciesof the Workforce
17 High-Performance WorkSystems
18 KnowledgeWorkers
19 Employee Empowerment
20 Teamwork
21 Focuson Strategy
22 Business Strategy:IssuesAffectingHRM
23 Focuson Strategy
24 Traditional HRvs. StrategicHR
25 Technological Change inHRM
26 A ChangingEconomy
27 Changesinthe EmploymentRelationship
28 Changesinthe EmploymentRelationship

Introduction
 Historically, the HR Department was viewed as administrative overhead.
 HR processedpayroll, handled benefits administration, kept personnel files
and other records, managed the hiring process,and provided other
administrative supportto the organization
 The role of Human Resources is changing as fast as technology and the
global marketplace
 The positive result of these changes is that HR professionals have the
opportunity to play a more strategic role in the business.
 The challenge for HR managers is to keep up to date with the latest HR
innovations -technological, legal, and otherwise.
 How HR managers can anticipate and address some of the most challenging
HR issues.

External and internal factors influencing the Personnel function
External factors
 Technological factors
 Economic challenges
 Political factors
 Social factors
 Local and Governmental issues
 Unions
 Employers’ demands
 Workforce diversity
Internal factors
 Mission
 Policies
 Organization Culture
 Organization Structure
 HR Systems

Technological Changes and HRM
Technology includes tools, machinery, equipment, work procedures and employee
knowledge and skills. The impact of technology on HR can be profound, as the
following things clearly reveal:
 New skills, knowledge, experience and expertise required to gain the edge
over rivals.
 Downsize operations, cut organizational layers and cut the extra fat to
survive in a competitive world
 Collaborate and achieve teamwork
 Relocate work from the office to the home
 Internet and intranet revolution

How to deal with a human resource surplus situation?

Economic, Political and Social Challenges and HR
 Now-a-days, people, goods, capital and information are moving around the
globe as never before.
 Global competition is making every firm to think in terms of gaining an edge
over rivals by producing high quality goods at a very competitive price.
 This is where the ‘people’ dimension comes into being. Incentives, favorable
work climate, team spirit, freedom to think and act independently, and a host
of other HR initiatives are needed to keep talent from flying away.

What HR managers can do?
 Use workforce skills and abilities in order to exploit environmental
opportunities and neutralize threats.
 Employ innovative reward plans that recognize employee contributions and
grant enhancements.
 Indulge in continuous quality improvement through TQM and HR
contributions (training, development, counseling, coaching etc.).
 Utilize people with distinctive capabilities to create unsurpassed competence
in an area (Xerox in photocopier, 3M in adhesives, Telco in trucks, Britannia
in biscuits, Nestle in coffee, McDonald’s in fast foods, etc.).
 Decentralize operations and rely on self managed teams to deliver goods in
difficult times (Motorola is famous for short productdevelopment cycles. It
has quickly commercialized ideas from its research labs).
 Lay off workers in a smooth way, explaining facts (IBM, Kodak, Xerox,
AT&T, Steel and Textile firms in India etc.) to unions, workers and other
affected groups. HR generally plays a key role, these days, in planning and
implementing corporate downsizings, and then in maintaining the morale of
the remaining employees.

Political factors
 Political stability
 Formation of new political parties
 Influence of politicians over Productivity linked wage agreements
 Political parties sympathetic to trade unionism
 Opposition to VRS schemes, downsizing operations, restructuring exercises.
 Freedom to show the doorto unwanted people
Social factors
 Conducting business in a socially relevant and responsible way.
 Hire qualified people or hire inexperienced local people and train them to
avoid trouble?
 Helping economically poorpeople, unemployed, underprivileged ones, etc.

Local and government-related factors
 Meet legislative requirements
 Offering jobs to certain sections of local community
Trade unions
 Demands for higher wages, better working conditions, incentives, benefits,
services

Managing workforce diversity
The workforce is becoming increasingly diverse now and organizations are doing
their best to address employee concerns and to maximize benefits of different kind
to employees with diverse educational, cultural and religious backgrounds. The
diversity issues, mainly, include the following:
 Composition In terms of age, caste, education, culture, region, religion
 Minority groups, economically backward groups
 Displaced persons
 Child labour
 Contract labour
 Women employees

Internal Environment and Hr
Organizations are also influenced by a variety of internal factors relating to
strategy, culture, structure etc.
 Mission and Strategy
 Internal Policies
 Organizational Culture
 Organization structure
 Human resource systems

Designing appropriate HR systems

An Aging Workforce
 The ministry of labour tracks changes in the composition of the Indian
labor force and forecasts employment needs.
 Projections for 1996-2006, indicate the Indian labor force will have a
phenomenal growth.
 Some of the expected change involves the distribution of workers by age.
 Youth labor force, workers between the ages of 16-24, is expected to grow
faster than the overall labor force.
 The fastest growing segment will be workers aged 45-64.
 By 2015, workers aged 40 and above will exceed the number under 40 for
the first time ever.
 Organizations will struggle with ways to control costs and will have to find
new ways to attract, retain, and prepare the youth labor force.
 Values tend to change from one generation to another as well as during
different life stages.

Skill Deficiencies of the Workforce
 The increasing use of computers to do routine tasks has shifted the kinds of
skills needed for employees in the Indian economy.
 Employees must be able to handle a variety of responsibilities, interact with
customers, and think creatively.
 Most organizations are looking for educational achievements and a college
degree is a basic requirement for many jobs today.
 The gap between skills needed and skills available has:
Decreased ability to compete because they sometimes lack the skills to upgrade
technology, reorganizes work, and empowers employees.

High-Performance Work Systems
 High-performance work systems are organizations that have the best
possible fit between their social system and technical system.
 Some of the trends in today’s high-performance work systems are:
o Reliance on knowledge workers
o Empowerment of employees to make decisions
o Utilization of teamwork

Knowledge Workers
 Knowledge workers are employees whose main contribution to the
organization is specialized knowledge.
 The reliance on knowledge workers affects organizations’ decisions about
the kinds of people they are recruiting and selecting.

Employee Empowerment
 Employee empowerment means giving employees responsibility and
authority to make decisions regarding all aspects of productdevelopment or
customer service.
 HRM practices such as performance management, training, work design,
and compensation are important for ensuring the success ofemployee
empowerment.
 For empowerment to succeed, managers must be trained to link employees
to resources within and outside the organization.
 The use of employee empowerment shifts the recruiting focus away from
technical skills and toward general cognitive and interpersonal skills.

Teamwork
 Teamwork is the assignment of work to groups of employees with various
skills who interact to assemble a productor provide a service.
 Work teams often assume many activities traditionally reserved for
managers.
 Virtual teams rely on communication technology to keep in touch and
coordinate activities.
 Teamwork motivates employees by making work more interesting and
significant.

Business Strategy: Issues Affecting HRM

Focus on Strategy
High Quality Standards:
 To remain competitive in today’s economy, organizations need to provide
high-quality products and services.
 Total quality management (TQM) refers to a company-wide effort to
continuously improve the ways people, machines, and systems accomplish
work.
 TQM has several core values.
Mergers and Acquisitions:
 Mergers: Two companies becoming one.
 Acquisitions: One company buying another.
 HR professionals have to sort out the differences in the two companies’
practices with regards to compensation, performance appraisal, and other
HR systems.
Downsizing:
 Downsizing presents a number of challenges and opportunities for HRM.
 All employees should be informed:
 Why the downsizing is necessary
 What costs are to be cut
 How long the downsizing will last
 What strategies the organization intends to pursue
 HRM can provide downsized employees with outplacement services to help
them find new

Expanding into Global Markets:
 In order to meet challenges, companies must
 Develop global markets
 Keep up with competition from overseas
 Hire from an international labor pool
 Prepare employees for global assignments.
 Employees who take assignments in other countries are called
Reengineering:
 Reengineering is a complete review of the organization’s critical work
processes to make them more efficient and able to deliver higher quality.

Reengineering affects HRM in two ways:
 The way the HR department accomplishes goals may change
 The HR department must help design and implement change
Outsourcing:
 Outsourcing refers to the practice of having another company provide
services.
 HR departments help with a transition to outsourcing and many HR
functions are being outsourced suchas:
 Payroll administration
 Training
 Recruitment
 Selection

Traditional HR vs. Strategic HR

Technological Change in HRM
 Advances in computer-related technology have had a major impact on the
use of information for managing HR.
 A human resource information system (HRIS) is a computer system used to
acquire, store, manipulate, analyze, retrieve, and distribute information
related to human resources.

A Changing Economy
 The way business is conducted has changed rapidly during the past few
years and will continue to do so.
 Many companies are connecting to the Internet to gain an advantage over or
keep up with competitors.
 Electronic business (e-business) is any process that a business conducts
electronically, especially business involving use of the Internet.
 E-business involves several forms of buying and selling goods and services:
 Business-to-consumer
 Business-to-business
 Consumer-to-consumer

Changes in the Employment Relationship
 A psychological contractis a description of what an employee expects to
contribute and what the employer will provide the employee in exchange for
the contributions.
 From the organization’s perspective, the key to survival in a fast-changing
environment is flexibility.
 Flexibility in HRM includes:
 Flexible staffing levels
 Flexible work schedules

Changes in the Employment Relationship
 Alternative work arrangements are methods of staffing other than the
traditional hiring of full-time staff.
 Independent contractors
 On-call workers
 Temporary workers
 Contract company workers
 From employees’ perspective, alternative work arrangements provide some
flexibility for balancing work and non-work activities.
 The globalization of the world economy and the development of e-
commerce have made the notion of a 40-hour workweek obsolete.
 Offering flexible work schedules provide organizations with many benefits.

Recent Trends in HRM

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