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Human Resource Management (HRM5002) Assignment 1 According to Armstrong (2006: p3), Human Resource Management (HRM) is defined the

strategic and coherent approach to the management of an organization's most important assets - the people working there who individually and jointly contribute to the achievement of the objectives of the business. HRM in general terms consists of making the most out of workers by expanding their capabilities, employing, maintaining and compensating their services based on their work performance and the requirements of an organization. HRM and HR are now referred to as personnel management. The personnel management refers to the process involved in managing the people

HRM is seen as a more innovative view than the traditional approach. The traditional approach of HR includes organizational management, personnel

administration, manpower management and industrial management. HRM is expressed as expressing specific goals and needs, so that they can be understood and undertaken by the workforce. When HRM practices are properly practiced they are expressive of the goals and operating practices of the overall enterprise. HRM plays a key role in the risk reduction of the organization.

This essay would focus upon the various challenges that the organization faces at present and in the future of people management. When working with employees there are various key challenges such as diversity issues, turnover and retention, health and safety as well as benefits.

Human Resource Management (HRM5002) Assignment 1 Organizations in Managing People The Challenges McMillan (2004) once wrote that the Taoist believed that the only permanent and constant thing in the universe is change. Thus, the most common challenge faced by today's organization is none other than brisk changes. Changes in people management are derived from aspects which include competitive global contention, necessity for organizational renewal, the need to extend tactical advantage, the management of new types of employee relationships, support for new levels of diversity, and the need for high levels of ethical behavior and social responsibility (Daft, 1998). The works of both Gilley and Maycunich (2000) and Caluwe and Vermaak (2003) agreed that both people and organizations are in a constant state of change. Organizations in recent times are indeed unpredictable and no longer are they offering a single product of service for twenty more years with an identical workforce that experiences linear line movements. On the other hand, the strengths and inner desires of people regardless of individually or as groups. According to Graeme (2006), he addresses the present-day predicaments faced by managers in dealing with people, organizations and managing change in a theoreticallyinformed and practical way. Managers face a lot of problems in managing people in the old and new economy organizations. Mullins (2005) affirms that an organization is a consciously, coordinated unit created by groups in society to achieve specific purposes common aims and objectives by means of planned and coordinated activities. Organizations are created by people who work together in order to attain their specific objectives. People and business processes are structured to achieve organizational objectives. In the late 1980s business and management research began to highlight the insights that some businesses were better than most others. This was because some managers were better at getting a job done through better employee relationships. Typically, approximately 80% of a managers time is spent interacting with its subordinates. Individual skill and talent are not sufficient for organizational success.

Human Resource Management (HRM5002) Assignment 1 Nurturing the human capital on the other hand would provide a proficient advantage to the organization Managing people is not only about the behavior and approach of individual managers but also the way in which the organizations and the team of managers with their influence of culture and philosophy create an environment where the employees and managers work. There are a lot of competence variations in the managers and the manner in which they manage the human resource of their organization. When people apply for jobs they not only look at the salary, increments, perks and development opportunities but they also want to know about the organizational climate and culture. The challenges that the managers face in managing people offers insights and reference points as to where the organization stands at present. Current Challenges The labor market is changing rapidly. Globalization, changes in labor legislation and talent shortages are all having an influence on employer-employee relations and are setting the trend for development of workforce resources over the next decade. HR function heads are under increasing pressure from business units of their companies. Effective human resources management directly influences a business sustainability and value. It is a vital element in implementing strategy for many successful companies. Globalization Globalization is defined as a structural route that draws people from all walks of life into a single community connected by the ever changing technology (Husain 2010). Therefore, undeniably globalization has indeed elevated a huge impact on HRM in todays world of business. These days, the management of HR is no longer restricted in recruiting employees from small limited market but instead can expand recruitment of employees from all around the world. Bawa and Ali (1999) cited that with the onset of the 21st century, globalization masquerades an idiosyncratic challenge in HRM to businesses especially the gigantic

Human Resource Management (HRM5002) Assignment 1 global multinational corporations. These developments provide revolutionalized opportunities to new markets. This necessitates the need to manage human resources effectively to gain competitive advantage in the global market place. In order to achieve this, organizations require an understanding of the factors that can determine the effectiveness of various HR practices and approaches. The businesses in the modern world are a multi-cultural one. People coming from across the borders have varied cultural, backgrounds, working style and different mind sets. The challenge to the HR manager and the organization as a whole lies in working with such varied people and to align them with their respective business goals and objectives. The increasingly competitive environment calls for an individual approach to each national market. The anthropological success of any venture outside the home market depends largely upon preparation, culture and training within the company. For example according to Ferraro (2001), the American management style of business is not universally accepted yet they send the people from other nations to carry on with the negotiation and contract with little or no understanding of the cultural differences and the way in which they should communicate business to each other.

Human Resource Management (HRM5002) Assignment 1

Strategic Advantage The strategic advantage is built by developing strong internal resources and capabilities will make it difficult for the competitors to imitate. The strategic advantage came into being due to following: People come with different mindsets Knowledge increases when shared Knowledge lies at all levels of management, not only at the top

The HR managers see diversity in the workforce also as a strategic advantage. Strategic advantage is gained by a company when it is able to build special skills and core competencies amongst its employees and also able to rapidly respond to the customers needs and preferences. A high quality workforce that enables organization to compete on a basis of market responsiveness, product and service quality, differentiated products and technological innovation on the other hand brings out the competitive advantages in an organization (Sims 2007). The organization faces a challenge in terms of strategic advantage when it does not focus on building the core competencies of its employees and does not provide sufficient training on how to deliver quality products rapidly with the changing demand patterns. When an organization focuses only on hiring people from a single source and does not employ people from varied cultural backgrounds, it loses its focus in the market and gives way to the competitors to have a strategic advantage over them.

Human Resource Management (HRM5002) Assignment 1

Organizational Renewal In the words of Soehlke (2010) he quoted that Leading change and organizational renewal provides a good process and easy-to-use tools to cultural change on any level within a large organization. Organization renewal refers to a process which involves reexamination of the organizations current and emerging policies, functions, structure and processes related to the values, mission/vision, philosophy and goals/objectives. It prepares a company to lead a dexterous organization while simultaneously unify best practices, modernization and advancements. Organization renewal enables managers to better comprehend the forces of change and how to manage the organization in a better way to long-term viability and success. Managers face a challenge to effectively renew the organization which is not ready to accept a change. The company needs to ambidextrous to sustain current success while simultaneously build new products, services and processes for the future. When firms do not possess such ability, they will rise to some level of success and then fail, later recreate themselves under crisis conditions.

Figure A - 6-factor model of organizational capability for organizational renewal

(Source from Lappeenranta University of Technology)

Human Resource Management (HRM5002) Assignment 1 Motivation, Job design and Incentive Programs In order for the management team in an organization to manage its employees, the key entails an understanding of motivation, job design, incentive systems, and group influence. An important role of the manager is to motivate people working in an organization. Gone were the traditional days of McGregors Theory X, Fear and Punishment as well as Carrot and Stick Theory approach of motivation. The current motivation approaches are based on McGregors Theory Y, Two Factor and Hygiene Maintenance Theory of Herzberg, Valence Theory of Victor Bloom and several others which basically emphasizes that employees should have control not only in their work but also in their environments. Singh (2006) stresses that challenging and exciting work tasks and responsibilities given to employees is a form of motivation. It is a complex process but there are different types of motivation bases on physiological needs (e.g. food, sleep etc), safety needs (e.g. job security etc), social needs (part of teams, clubs and groups) self realization needs (e.g. respect, self esteem) and self actualization needs. The incentive programs should be structured in such a way that they are paid fairly. There should not be one package suits all.

The Harvard Map of HRM HRM Guide (2010) illustrates that workers are seen as resources and which is why stress is on people as human resources. The Harvard approach identifies an element of mutuality in all businesses whereby workers are noteworthy stakeholders in a company. The workers themselves, alongside other groups like shareholders and customers have their own needs and concerns. The Harvard Map associates these 4 aspects of HR policy areas: 1. Human resource flows includes recruitment, selection, placement, promotion, appraisal and assessment, termination etc. 2. Reward systems include pay systems, motivation, etc.

Human Resource Management (HRM5002) Assignment 1 3. Employee influence includes delegated levels of authority, responsibility, power 4. Work systems - definition/design of work and alignment of people. These aspects further leads to the achievement of four Cs or HR policies which are commitment, congruence, competence and cost effectiveness.

Figure B - The Harvard Map of HRM

(Source from HRM Guide)

Human Resource Management (HRM5002) Assignment 1

Managing Teams The organization has to develop its employees competencies based on the needs that arise. While people do not readily accept changes, adjust to new unfamiliar environments and respond readily to the imperatives of technology, the managers face a big challenge (McKenzie and Traynor 2001). Organizations work across the borders and the amount and requirement of a work requires diverse skills and ability to manage tedious tasks. Both employees and managers need to be flexible and quick learners to understand new developments and be competent in dealing with competition on a global basis (Garrick and Usher 2000).

Managing teams in an organization is also a huge task. Teamwork improves efficiency and makes employees diversify their skills. It helps in better understanding of the goals and objectives of the organization. The problem arises when conflicts arise in a team due to power. It interrupts the normal activity of the organization and undermines team spirit. Hence the organization has to build up team spirit among its employees. Teams should be constantly coached largely by internal and external faculty. Many top organizations are adopting the ABC concept and the linking task was done by actively linking, leveraging and embedding the pockets of knowledge and expertise.

Human Resource Management (HRM5002) Assignment 1

Future Challenges Employee Retention One of the key challenges of the present and the future that an organization will face is the retention of the key employees (Heskett 2009). Retention is difficult as there are numerous opportunities available in the market. The employee not only looks for better package and incentives, but also how valuable his job is in contributing to the growth of the organization. Many people in the todays world build in the entrepreneurial skills in themselves so that they could establish their own business using their creativity and talent. When an organization does not adapt to the changing needs to the customers and clients, it may lose its credibility, reliability and value in the market. HR managers and the higher management must see employees as talent investors. Employees with special skills, knowledge and expertise must be treated as a scarce strategic resource. The fact that manpower turnover was less than one half of a percent was proof in using human resource as a strategic advantage. They broke down barriers in decision-making, unlocking core competencies, encourage collaboration and cross team communications. A good example is IBM company, whereby the employee retention is of utmost importance. The employees of IBM can build their portfolio, while working on a challenging business process projects that enable the worlds biggest companies achieve business excellence. The employees are considered as the most vital asset and are given opportunities to nurture their talent and bild up their skills. With such a motive IBM has retained its position for being the Employer of Choice for many years. It has achieved this due to three initiatives for its employees- capability, climate and culture.


Human Resource Management (HRM5002) Assignment 1

Workplace Diversity Workplace diversity poses current as well as future challenges. Age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status and work experience are some of the dimensions of the workplace diversity. If the organization ignores diversity in its workplace, it may lose out the talent to its competitors. MNCs usual practice is to employ people globally. Hence organizations should apply the Think Global, Act Local concept in order to be successful. A skilful balancing act of the HR manager is the key to an effective and efficient workplace diversity management. In retrospect, there are also problem arising when the employees are placed differently based on their diversity profiles. According to Chan (2009), it is not possible to classify diversity and those organizations that react to human intricacy by utilizing the talents of a broad workforce will be the most effectual in growing their businesses and their client base. The ethnocentric approach needs to be thrown out the window and replaced with culturally relative perspective approach instead.

Individual and Organizational Learning

Learning would enable the individual and the organization to develop as a whole. The challenge lies in pooling enough resources to enable learning in an organization. The company made not have enough resources to develop the competencies of its employees. They may not be able to provide them with latest technology and training to make them more efficient to meet the rapid changing needs of its customers. Also individual learning is heavily dependant on the individuals capacity to learn. Unless the HR strategies are properly planned, designed and delivered, it would not derive the expected results.


Human Resource Management (HRM5002) Assignment 1

The role of a Human Resource Manager has changed over the traditional roles. A HR manager not only plays a supportive role into the business but involves into managing the core activities of the business. When the economic slowdown took over all the organizations they realized the importance of HRM. The management of HR can only save an organization from any crisis. When the people in the organization are managed well the organization will survive any competition and will remain healthy and sustainable in the long run. To be effective now and in the future, the human resource management of an organization must practice a more refine thinking by being more systematic and effectively address business issues by ensuring the organization develops a cross function work environment. There must also be a presence of responsible leadership team for planning and managing the complex issues of rapid changing. With modern technologies gearing up in the working of the organizations, every company must ensure that it supports employees in building their talent and provide them with development opportunities so that they can build a long term relationship with the organization. When the organization understands the needs of its employees and provides them with added benefits, it will keep the employees motivated and highly focused on the deliverables. This would lead to the growing of the organizations creditability, reliability and profitability.


Human Resource Management (HRM5002) Assignment 1 Reference List:

Armstrong, M. (2000) Strategic Human Resource Management: A Guide to Action, Kogan Page Publishers

Bawa, N.A, and Ali, J. (1999) The Challenges of Globalization and the Role of Human Resources, [online] Available from [Accessed on 20th November 2010]

Caluwe, L.D and Vermaak, H. (2003) Learning to change: A Guide For Organization Change Events, SAGE.

Chan, A. (2009) The Challenges of Human Resource Management [online] Available from [Accessed on 18th November 2010]

Daft, R.L (1998) Essentials of Organization Theory and Design, South-Western College Publishing. Ferraro, G.P (2001) The Cultural Dimension of International Business 4th Edition, Prentice Hall

Garrick, J. and Usher, R. (2000) Flexible Learning, Contemporary Work and Enterprising Selves, Electronic Journal of Sociology, ISSN: 1198 3655.

Gilley, J.W. and Maycunich, A. (2000) Organization learning, performance, and change: An Introduction to Strategic Human Resource Development, Perseus.

Graeme, M. (2006) Managing People and Organizations in Changing Context, A Butterworth-Heinemann Title


Human Resource Management (HRM5002) Assignment 1 Heskett, J. (2009) Harvard Business School Working Knowledge: Are Retention Bonuses Worth the Investment? [online] Available from [Accessed on 19th November 2010]

HRM Guide (2010) The Harvard Map of HRM [online] Available from [Accessed 24th November 2010]

Husain, A. (2010) The Challenges of Globalization and the Role of Human Resources [online] Available from: [Accessed on 21st November 2010]

McMillian, E.M (2004) Complexity, Organizations and Change Volume 1, Routledge

McKenzie, J.S and Traynor, W.J. (2001) Opportunities in Human Resource Management Careers, McGraw-Hill Professional.

Mullins, L.J. (2005) Management and Organizational Behavior 7th Edition, Financial Times/Prentice Hall

Sims, R.R (2007) Human Resource Management: Contemporary Issue, Challenges and Opportunities, IAP.

Singh, Y.K (2006) Human Resource Management, APH Publishing.

Soehlke, M. (2010) Leading Change and Organizational Renewal [online] Available from [Accessed 23rd November 2010]