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HR policies in 21st Century

HR policies in 21st Century

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Published by sibydan701

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Published by: sibydan701 on May 17, 2010
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Human Resource s t Management in 21 Century

Siby P Daniel Subrahmanya Rao Anuradha Sultane Supriya H G Suresh S Swati Bansal

Topics to be covered
Introduction Employees-Intellectual capital-Manage

Changes in world A case - Managerial Misclassification

Human resource management consists of
Attraction Retention Motivating Disciplining Selection Utilization Rewarding


Shift in economic activity Agriculture manufacturing services Companies compete based on human capital rather than physical capital(hard assets)
Employees(people) are viewed as resources  Active management positively contributes to organizational success Human resources similar to customers, financial

resources, operating systems and technology
 Constituting main input into organization

Change in employment contracting
Previous scenario
  Continuous employment contracting
 Implicit employment
 Employees worked continuously for a single employer  Received pension benefits after retirement

 Mutual and reciprocal obligations
 In initial period employers gained an economic rent  employees were paid less than the value of their productivity  In later period employees gained an economic rent  employees were paid more than the value of their productivity  Laying off & rehiring of employees

New scenario
 Employee quit rates rose markedly  Frequent job changing(even job hopping)  Employability  Employees were paid the value of their productivity at

any point in time
 Reducing workforce to achieve long term, permanent

labor cost reductions.

Implicit long term employment contracting ↓ Shorter term, commodity type labour contracting (through outsourcing)    

Reasons for changes
Global economic competition Deregulation Technological change Increased product and labor market competition

Previous scenario:
 Strong unions and collective bargaining  Mainly in companies having monopoly  Work terms and conditions were on negotiated


Present scenario:
Decline of private sector unionization & collectiv`e

Fewer people joined unions Companies moving operations offshore Decrease in labor relations department Increase in HR department

 Bundling of HR management practices  Positive effect on financial performance

High Involvement

Low Involvement

High Involvement Low Involvement Job Security Employment Duration Employment Procedure Present Long Term Selective Hiring Absent Short Term Outsourcing, Employment Contracting, Vendoring In short term

Realisation of gains In Long term Organizational performance

Achieved by Achieved by Investment in reduction in labour intellectual capital costs

The proper balance between
High involvement HRM practices  Low involvement HRM practices

Practices for Resolving Employee Disputes
“Conflict is an Enduring, ever- present characteristic of employment relationships” (Colvin, 2004) Employee related conflict in organizations is not affected by decline in unionism   HRM Role Understand nature of such conflict Evolve practices to resolve conflict Measure effectiveness of such practices

Comparison of Unionized and Non Unionized Alternate Dispute resolution Systems
Unionized ADR Systems Non Unionized ADR Systems

Grievance steps. Speed of grievance Settlement Scope of grievance related issues

Determined by both Determined solely by employees and employer. Its’ Oneemployers sided’ and Unfair

Grievance Filling rates Higher Third Party Arbitration In most cases

Lower (approx 50% less) In very few cases

Eligibility to use Only employees Scope is wider grievance procedures represented by unions Post Dispute Not considered Resolution Outcomes Focus on Post Dispute Resolution Outcomes .

Post Dispute Resolution Outcomes
Prior to Grievance Settlement Measures Non Grievance Grievance Filers Filers Job performance Similar Similar ratings Promotion rate Similar Similar Similar Similar Post Grievance Settlement Non Grievance Filers Higher Grievance Filers

Significantly Lower Significantly Lower Slightly Lower Significantly Higher

Higher Similar Similar

Work Attendance Similar rate Job Turnover rate Similar ( 1-3 years)

Explanation of findings

Retaliation explanation Consistent with Organization Punishment/Industrial   Revealed performance explanation Consistent with Shock Theory of Unionism

Post Dispute Resolution Outcomes
As Non union ADR systems are reactive in nature, their use is –   Leading to Further deterioration of employment relationship than resuscitation of such relationships   Original purpose of adopting Dispute resolution Systems – Not met  

Need for Proactive employment dispute identification, diagnosis and resolution

Post Dispute Resolution Outcomes
If Human resources are to be used for competitive advantage, HRM in 21st Century will require Deeper thought, Theory development, Empirical research and Clinical insight than before

Case Study – Managerial Misclassification
CaseIn retail and restaurant industries, employees holding managerial job titles such as Store Manager, Department Manager, Location Manager Etc’ Perform Employee rather than Managerial work. But are Paid Annual salaries rather than the preferred hourly wages.   Misclassification cases filed against employers argueThat these employees should receive hourly pays and also overtime pay for working hours>8 as they are doing employee work  

Case- HR Perspective
Key Question

“Why Managerial Misclassification cases exploded?”

Answer lies in 3 parts 1>In start –up phase of an enterprise, mangers managing the few locations and facilities predominantly do managerial work.   2> As businesses grow larger Strategic, Organizational, SCM initiatives take decision making responsibility away from store level to higher levels.   3>Compensation = Base salary + bonus Bonus = Budgeted Labour cost – Actual labour cost   Store managers have a clear incentive To substitute their’ labour’ for hourly paid labour of their employees Are Misclassification cases a result of different Strategic initiatives on part of companies?

As Companies have failed to address change in lower level management jobs emanating from well-meaning and wellfounded strategic initiatives.   Success of an enterprise lies in Ability of organization to Anticipate and deal with such cases

If HR executives had a seat at the business strategic table

HR is a strategic business function that should be a business partner in the same way as Finance Marketing and Operations are business partners in an enterprise. As businesses compete on basis of their intellectual / human capital 21st century is for HR functions and HR leaders to keep their eye on prize of strategic role in businesses while also performing necessary operational roles

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