Roadmap from Transactional to Transformational - pramod patil
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The document discusses the transformation of human resource management from transactional to strategic. It outlines five phases: 1) the early 1900s focus on supervision and punishment; 2) scientific management in the early 20th century emphasizing output; 3) the human relations approach from the 1930s-1950s focusing on employee satisfaction; 4) treating people as human resources rather than production factors from the 1970s; 5) the current strategic human resource management approach integrating HR with other business functions. Emerging markets are driving changes in demographics and talent trends, requiring HR to develop talent strategies as the default strategy and implement them across functions to create a talent-focused organization.
Roadmap from Transactional to Transformational - pramod patil
- 1. Roadmapfrom Transactionalto Transformational Mr. Pramod Rajaram Patil patilpramod25@gmail.com CELL: +91 9076 4248 25 Introduction If anything in this world is constant than it is CHANGE. The Human Resource, as it is in the current state is no more similar to the earlier day personnel management or stick and carrot rule. Various factors both internal and external to organization are molding Human Resource functions. Human Resource management is one of the most complex and challenging fields of modern management. In addition to building up an effective workforce, the Human Resource manager must take into consideration the expectation of the employees and of the society in general. Human Resource department has shed away its old skin and is ready to accommodate and solve current business challenges. The role of Human Resource is transforming from a support function role to decision taking function. Organization have understood that in order to sustain and grow in today’s highly volatile and competitive economy, one have to calibrate Human Resource department at every function / level in decision making process. Human Resource management is transformed into strategic Human Resource management to achieve competitive edge above all competitors. According to Leon C. Megginson, the term Human Resource refers to “the total knowledge, skills, creative abilities, talents and aptitudes of an organization’s workforce, as well as the values attitudes and beliefs of the individuals involved”. Many successful companies are empowering employees, by letting workers manage almost everything, from budgets to inventory control, with little direct supervision by top management. However, today developing the capacity for flexibility has become a significant aspect of a company’s corporate Human Resource strategy. Human Resource professionals have to deal with existing challenges like - Developing future leaders Attracting talent Creating talent pool Good workforce planning Talent management Rewarding talent Performance management Training and development Developing multi-skill professional Retention of talent. In addition to this the Human Resource professionals have to face newer challenges like Sexual harassment of women at work place Industrial mentoring Corporate social responsibility Industrial relation and dispute settlement Creating inspirational workplace Investing in learning and training. Employee work life balance Reducing Cost to Company Employee engagement activities Inclusion
- 2. Roadmapfrom Transactionalto Transformational Mr. Pramod Rajaram Patil patilpramod25@gmail.com CELL: +91 9076 4248 25 Roadmapfrom Transactionalto Transformational There is a radical difference between the modern Human Resource management and the personnel management that was prevalent decades ago. With the turn of the twentieth century, the managerial philosophy that has defined the personnel functions has undergone tremendous changes. Over the past 80 years, the scientific management approach and the human relation approach have come up and declined and presently, the human resource approach has gained prominence. But today’s Human Resource department is in transformational mode and the latest requirement of organizational are having Human resource Department as strategic partner and thus Strategic Human resource Management is need of time. Phase 1 – Carrot and Stick Method. Most business owners and managers of the early 1900’s believed that if the employees were to be effectively managed, they have to be constantly supervised and threatened with the loss of their jobs. All employees were considered to be equal in terms of productivity, and when they were not able to achieve set targets they were dismissed. Phase 2 - The Scientific Management However, the scientific management approach challenged these beliefs; it suggested that managers adopt a scientific and objective approach to determine how work could be most efficiently designed. This approach resulted in work methods and techniques that emphasized employees output rather than employee’s satisfaction. During the early years of the 20th century, managers embraced the concept of ‘the economic man’ which suggested that a worker was basically motivated by economic gain and that financial incentives alone could maximize the workers output. During this time personnel departments of big manufacturing organizations had the traditional responsibilities of recruiting, selecting and training staff and ensuring the health and the safety of the employees. Phase 3 – Human Relation The Hawthorne Studies conducted during the 1930’s and 1940’s, forced organization to shift their attention from the scientific management approach to human relation approach. Results of the Hawthorne Studies suggested that employee productivity was affected not only by the way the job was designed and the economic reward but also by the certain social and psychological factors. It was recognized that treating employees with respect will improve employee satisfaction and help in achieving higher productivity. The growing strength of unions was also a major factor responsible for the shift to human relation. The rise of unionism gave workers the legal right to organize and to bargain collectively worth employers over wages, job security, benefits, and other work conditions. Although the human relations approach was undoubtedly instrumental in improving the working environment for many workers, it was not very successfulin increasing worker output and improving job satisfaction. It was evident that good feeling alone does not ensure high levels of employee satisfaction and productivity. Thus during the 1950’s and 1960’s, management of various organization began to give up this approach, which was considered outdated.
- 3. Roadmapfrom Transactionalto Transformational Mr. Pramod Rajaram Patil patilpramod25@gmail.com CELL: +91 9076 4248 25 Phase 4 – Human Resources Organization then adopted human relation approach, which treats organizational goals and employee needs not as separate and exclusive, but as being mutual and compatible, so that one need not be gained at the cost of the other. Research in behavioral sciences during 1970’s suggested that treating people and resources rather than as factors of production or as human beings, act on the basis of emotions alone, would lead to real benefits for the organization as well as for the employees. Implementation of HR programs and practices should comply with the goal of balancing individual and organizational needs and meeting both these goals. Phase 5 – Strategic Human Resource Management However with globalization, the free markets, environmental, social and technological changes, extensive competition, increasing scarcity and cost of human resources has increased expectations from employees and employers both resulting in restructuring of HR functions. It is important to know how organization makes decision in this complex, rapidly changing world. This process is referred to as strategic management. HRM extends beyond functional areas and is integrated with the other important parts of the organization namely operations, marketing, finance and so on. Well conceived HR strategies are significant basis for competition and major competitive weapon. Needfor transformation of HR The HR functions have to be streamlined with the organizational strategies to overcome newer market challenges which stimulated HR professionals to come up with strategies which can ensure sustainability and higher growth. When looking revenue wise, in coming 10 years, emerging economies like India and China will lead in GDP and contribute to 17 % in revenue. The growth opportunities and increased industrialization in emerging markets has change the face of workforce dynamically. The dependency ratio (no of working people/ no of non working people) in emerging markets are positive as well as the GDP growth rate is higher which is forcing to HR professionals to amend existing HR functions to suit the trend. The average age of workforce in India and China is 28 & 38 respectively. Thus this indicates opportunities for HR in creating talent pool. But this talent management is to be undertaken after considering below macro and micro talent trends. Macro talent trends Shortage of qualified graduates Educational proficiency –high potential people Workforce participation – flattened hierarchies Aging workforce – European and American Wage inflation –in emerging markets Shortened of experience Turnover
- 4. Roadmapfrom Transactionalto Transformational Mr. Pramod Rajaram Patil patilpramod25@gmail.com CELL: +91 9076 4248 25 Micro Talent trends Transformation from extrinsic motivation to intrinsic motivation – 21st century employees seeks for 3 things – autonomy, mastery & purpose in their jobs. Thus extrinsic or monetary motivational tools only cannot satisfy employee. There is a need to look at the intrinsic motivational angle in order to keep today’s workforce highly productive. Hence HR role has to incorporate this micro talent trend. Talking about transformation process, the key focus should be on developing and making TALENT STRATEGY as DEFAULT STRATEGY. This strategy should be simple/ adaptable, high in content & commercial in nature. This talent strategy should be implemented at all cross functional departments aiming to create every manager as talent manager irrespective of departments. You cannot be a good manager/ leader without being talent manager/ strategist. The transformation activity (basically investment in HR functions) has been carried out on two levels - Talent needs & organizational needs depending upon the duration of the activity Talent Needs Organizational Needs Short term longterm HR transformations from transactional functions is all due to change in the world wide workforce demographics, their needs and abilities, shift in economies and growth of free markets. Every HR professional has to focus and understand that they have most crucial role in developing HR strategies for maximizing talents and organizational growth through designing and implementing it on realtime basis. Professional (current leaders) Aspirational (future leaders) Interventional (Problem solving) Transformational (Future changes) FOCUS DURATION
- 5. Roadmapfrom Transactionalto Transformational Mr. Pramod Rajaram Patil patilpramod25@gmail.com CELL: +91 9076 4248 25 Examples of HR transformation – Sexual harassment ofwomen at work place – The brutal gang rape in Delhi last December has put the spotlight on women’s safety and sexual harassment in the workplace and made organizations realize that they need to be more sensitive as well as alert to this issue & place it at the top of their organizational agenda. IBM, Infosys technologies and TCS have formulated strict anti - harassment policies and guidelines for women’s safety. Companies are coming up with ZERO TOLERANCE POLICY to curb menace against women employees at workplace Industrial relation and dispute settlement – The recent labour and unions problems in Maruti & Suzuki, Manesar and other automakers was a latest issue HR professionals dealt with. After giving immediate hikes to settle the unrest, focus was turned to revamp the contract labour rules in organization. Salaries are heading north in the auto industry, but ironically it is toxic combination of labour militancy, rigid labour laws and shortage of skilled manpower that has triggered the recent wage hike. Realigning the HR functions to accommodate unions for smooth operations is another challenge. Investing in learning and training – Aircel is growing champions by investing in learning. Aircel is investing in creating a culture of learning in order to grow a robust pipeline of leaders within the organization. The other arm of Aircel’s people strategy is the in – the house learning and training centre, the Aircel academy. It facilitates to develop replacement for higher positions within organization. The Aircel’s academy’s robust mechanism of grooming talent through mentoring, coaching and other various programmes has equipped Aircel to mititgate urgent and strategic business needs. Creating inspirational workplace 1. Egalitarism - in an egalitarian workplace every employee leads without title. Going beyond hierarchies and creating flatter levels is promoting egalitarian work culture. NetApp India, CSC India, EKA software Solutions, Google, Infosys, CISCO, Tata Steel are few to name who are implementing Egalitarism work culture. 2. In Trident Limited, going beyond designation is new funda. Nothing motivates employee’s more than his organization bestowing complete ownership of his task on him. It not just stirs the leadership spirit in him but also allows him to take charge of his domain, while stimulating him to innovate and strive for excellence and this is exactly what Trident Limited is doing. For effective execution, trident limited has adopted a flat organization structure where the talent pool is divided into three cadres that are the institution builders, development coaches and frontline entrepreneurs. 3. Theorem India Pvt. Ltd boasts of a culture where people come to work every day not because they have to, but because they want to. About 80 – 90% of the company’s mid – to senior – level position are filled internally. This is because of focusing more on developing internal managers for promotions not only helps in reducing recruiting cost but also saves on T& D expenses
- 6. Roadmapfrom Transactionalto Transformational Mr. Pramod Rajaram Patil patilpramod25@gmail.com CELL: +91 9076 4248 25 Expert opinion by Dave Ulrich In his latest book Ulrich defines Global HR competencies as “mastering competitive value from the outside in”. Ulrich identifies six domains of HR competencies in his model. They are- 1. Credible activist: you walk the talk 2. Strategic “positioner” 3. Capability builder 4. Change champions 5. HR innovator and integrator 6. Technology proponent Inclusion at workplace – Inclusionhasemergedasnewareaof focus.Includingandworkingwith LGBT (Lesbians,Gays, Bisexual,and Transgender) andphysicallyhandicaps asworkforce islatestchallenge.Thisfacilitates to developexperience curve foremployer andinitiatelearningonbothsides. TATA TCS(ACE program) focusesoninclusionandemployeeengagementactivitiesparallel. Companieslike Delloite, IBM, Merck and majorlyall multi national organizationssupport thisinclusionphilosophy. Having varietyof staff on boardhelpsinunderstandingthe potentialcustomersalsothusinclusionis expectedtorise inall organization. Developing Employee engagement Activities & total reward system as a firewall against employee turnover – All organizations face one major HR hurdle – retention of existing workforce. Many HR professionals preach and practice that having a good employee engagement rules and having a proper and well described total reward system (includes mix of monetary & non monetary benefits) can help in retaining. This both activities are given proper weightage in HR budgeting which is aligned with organizational budgets. Employers like TCS, Johnson & Johnson, Crisil etc do give importance for this activities. THANK YOU