HRM ESSAY

HOW IS HRM INFLUENCING IN A

COMPETITIVE WORLD

BY

MARIA MEMON

BBA 5C

SUBMITTED TO:MS SALEHA HAROON

 "In a global competitive world, you gotta win.  When you win, you give
back."

~ Jack Welch~

Human Resource management or the personnel management, in a sense

means getting things done by its people. It is an essential role that is
eventually played by every manager. HRM is basically about how one
manage its people in a effective way in order to gain more productivity and
HR means ‘human resource’ that show the people viewed as a resource in an
organization, if effectively managed can bring productivity and can be a
competitive advantage for an organization. Before putting an argument on
how HRM is influencing in a competitive world we need to realize that HR is
more than maintaining personnel functions. Corporate and economic
development dictated that businesses to remain competitive, needs to view
HRM as an evolutionary function. In this essay certain issues and challenges
have been discussed that influence HR to remain competitive in this modern
world. Firstly it is told about employees are the competitive advantage of a
company and to manage it effectively is the primary goal of an organization.
This essay is also about how workforce diversity can bring positive and
negative impact on organization it is also about how rapid technological
changes and globalization had bring challenge for HR professional. The basic
point on which this essay focus is about how HRM is actually influencing in
the competitive world.

In this modern world, where company’s competitive advantage is its

employees, their HR has to act as a strategic partner, According to Herzberg
views competent employees are the hygiene factors and high performance
work systems are motivator in this today’s business world. (Herzberg
1966)”.

As the world is moving at the accelerating pace, these rapid changes had
made difficult for a organization to remain competitive, businesses now need
to integrate new technologies and to develop strategies and structures for
the changing workforce in order to survive in this competitive world.
(Kurzweil, Ray, 2005). These rapid changes have brought both negative and
positive effects on employees and organization, for instance, in today’s world
where uncertainty is on its peak, many employees have fear of job losses
and the fear that they do not have kind of life or retirement for what they
had hoped for, and there are job that once motivated employees are no
longer enough because people want more out of life and out of their job.
(Alvin Tofler 1970).

In this 21st century, employees are the major cost and value building factor.
In most companies, whether service or product, employees are the major
source of revenue, sales and earnings. So here HRM plays a vital role
because a company’s ability to attract, retain and develop good employees is
the most distinct factor in this competitive economy, such employees add to
productivity and innovation. (Michaels Ed, 2001)

For HR professionals, the new century will take up where the old one left off
- with the struggle to recruit and retain a trained, satisfied workforce.
Recruiting will continue to be a key issue; the search for people with the
proper experience is making HR a primary, critical factor in a company's
competitive position. “One dot-com executive said the focus on recruiting is
the number one business strategy," he says. So the HR professional must
have the best practices to create, retain and attract qualified and talented
people. (John Challenger, Gray & Christmas, 2004)
Challenger expects HR using best practices to create an environment that
attracts people and makes them want to stay. As in the article states that
"HR will be tailoring the softer benefits. Instead of stock programs, they will
listen to individuals and give them access to things that work for them, that
make the environment their kind of place. For one person that might mean
coming in at 10 a.m. so that they can see the children off to school. For
another person it might be tuition support." (John challenger 2004)

In order to keep good people or employees businesses need commitment

form their employees, it enables the companies to realize the potential of its
people. In today’s world commitment is so important, because it is becoming
so hard to replace key people and commitment is perceived as business
necessity. (O, Malley, Michael 2004)

There is a connection between employee’s commitment and motivation. As

for motivation to exits employees must be committed, it should have the
particular abilities to act and understand what must be done. It has been
observed that employees with high level of motivation are 150% more
productive than those with medium level of motivation. (Cox & rock 2004)

If you ever ask from HR head of large organization about what is his biggest
challenge, he will probably say ‘retention of people’. The same person after
few hours with the same question will answer that ‘attracting talent’.
Probably on the next day he will say ‘retention of people’. Different answers
from the same individual at different times of the same question does not
mean he is not sure about what is his challenge, but it represents the fact
that the priority of HR challenges is changing rapidly and continuously. So
the biggest challenge for HR professional in today’s world is to identify its
biggest challenge. ( Dinesh kumar Murugesan)
Has HR become irrelevant? No! We don't think so. Growing globalization,
rapid change of technology, pressures for cost reducing, and the raising
importance of knowledge capital are dramatically increasing the demands on
the HR function and its ability to contribute in a meaningful way. The need of
HR is there, but in order to remain competitive and relevant in today’s world,
HR professional need to examine them thoroughly, and redefine themselves,
their capabilities and their role. They need to realize that the particular
leadership style which has served them so well in their move up to HR
management ranks and may have adequate in the top HR position in the
past, will no longer work today. Now the measures of success have been
changed and the HR leader needs to understand and meet the particular
standard. (Helen Peters & Robert Kabacoff)

There are an incredible number of pressures on today’s organization. For

instance, some of them are, environmental pressures such as growing
globalization, rapid pace of technological change, and strict competition;
other organizational changes such as building a new organizational alliances,
making new structures and hierarchies, new ways of doing jobs, and a very
high rate of change for instance, changes in the workforce, for example:
employees priorities, capabilities, and demographic characteristics. With in
these pressured organization, there is a need and opportunity for the HR
function to play a critical role in helping the organization to cope up with
certain changes. (Beatty, R.W. & SCHNEIER, C.E. (1997)).

The role of HR has been developing for some time, for instance, the shift
from “personnel” to “human resources” was taken into consideration in order
to acknowledge the value of employees as an organizational resource, and
was an attempt to eliminate some of the stigma coming to be associated
with lethargic and commanding personnel departments. This shift has
accompanied HR to become a strategic partner with the leaders of the
business to contribute its input with significant business decision, give
suggestion on critical changes, and help develop the value of employees or it
can be said to have a seat at the table. (Beatty, R, W, & Schneider C.E.
(1997))

According to Jill Conner, Human resource has been revolutionized from a

particular, separate function to a broad cooperate competency in which HR
manager and line manager had built partnership in order to gain competitive
advantage and to achieve company’s overall goal. (1996).

Conventional sources to gain competitive advantage, for instance,

production capacities, research laboratories, access to financial resources,
distribution channel or economies of scale are necessary but not sufficient
enough to ensure success in a today competitive business world. It is
commonly stated that “ People or employees of a particular organization are
the key crucial asset in this competitive business era, and that all other
assets are nothing more than commodities that can be purchased at market
price, because only human asset has the potential to learn, grow and
contribute” (Fitz-end 1995, p.45). As “we do live in a world where
knowledge rather than physical capital, is increasingly important, and for
that we need more intelligent people who has the ability to bring increase
productivity, build new products and services and who has the ability to do
this even more quickly.’(O’Reilly and Pfeiffer 2000, p.1). Whereas
Researchers emphasize more on the role of employees for achieving
company’s goals’ (Boudreau 1997; Baird and Missoula 1998). According to
Quin and Mayo employees are the most important asset for an organization
to attain its goals. (1992, 2001), and human capital symbolize the only
viable source of competitive advantage ( Hammel and Prahalad 1994;
Pffeffer 1994; Spencer 1995; Boudreau 1996). Or we can say it as ‘the
biggest, most valuable asset any organization has is its people, because all
management plan and decision for success enrichment are carried out, or
fail to be carried out, by its people’. (Darling 1999, p.317).

Subsequently, human resource management (HRM) deals with recruiting,

developing, and keeping the best people. It has now the opportunity to
move out of the background and into the mainstream organizational strategy
and management. In a world where all work is considered as knowledge
work and intellectual capital is the key for success, it is understandable that
the ability to attract, retain, and use the particular talents of people provides
with a competitive advantage’ ( O’Reilly and Pfeffer 2000, p.257).

The 21st century has come with different and distinctive HRM challenges to
business especially to those which are operating across national boundaries
as a multinational or global company. In order to compete in a global market
it require many factors and systematization of its human resource practices
which is certainly important for a organization to improve global
competitiveness and to empower employees for global assignment. In order
to achieve success in a global marketplace, businesses are requiring, no
matter small or big, to understand global corporate cultural differences and
to invest in human resource. There are some human resource management
issues that are particular for global businesses. The key issues involves
staffing policies, selecting and retaining talented employee, training and
development, at the same time encouraging employees to be innovative and
creative, culture barriers and legal frame work. Other issues include
understanding the challenges of living and working overseas, performance
appraisals from a distance, training and management development,
compensation packages, and labor relations and organized labor laws.
( Sims, R.S& Sims).

As competitors strive to win for the talent and effective human resource
management is necessary in order to gain competitive advantage in the
marketplace. Raymond et al, had presented three challenges that the
company faces, that are sustainability, technology and globalization. (2007).

Over the few decades the world has been dramatically changed due to the
forces of globalization and the change in technology had greatly impacted
the business environment, Now, in order to survive and progress
organization are required to respond in a strategic manner to the changes
taking place in this competitive world. (Derlery, J.E & Doty, D.H).

In a competitive market today, those businesses that are not adapt to

changes and has no competitive advantage will easily be overrun by its
competitions. However, it is true that keeping business and its people
competitive is not an easy task but it is the most important role played by
HR professionals. (Welch). Being competitive does not actually mean being
better and outclassing your competitors, infact, being competitive means
organization should be able to compete on head with any changes taken
place into the market. It is like having human resource that are willing to
learn new ways of doing business and are able to use them. (Halcrow A,
1998)

Workplace diversity is also one of the challenges that influence the HRM in a
competitive world. Organization favor variety, diversity and multiculturalism,
since interaction between different minds are the stronger source in
generating solutions than those of identical. So the future success of any
organization relies on the ability to manage a diverse body of talent that can
come up with new ideas, perspectives and views to their work. The challenge
and problems faced of workforce diversity can be turned into a strategic
organizational asset if an organization is capable enough to capitalize on this
melting pot of diverse talents. As Cox said that with the mixture of multiple
talents of diverse cultural backgrounds, genders, ages, lifestyles, an
organizational can respond to business opportunities more rapidly and
creatively, especially in this global edge. (1993). More importantly if the
organizational environment does not support diversity broadly, one risks
losing talent to competitors. In order to effectively manage workplace
diversity, Cox suggests that a HR manager need to shift from an
ethnocentric view for instance, “our best is the best way” to a culturally
relative perspective for instance, “ lets take the best of a variety of ways”.
(1993).

Globalization has elevated the importance of HRM development in

organization. These changes have led to the notion of the HR system as a
strategic asset. Many of the arguments about processes of globalization
within the HR function rest on the assumption that there has and continues
to be longitudinal change in the conduct of HR. It has been observed that by
and large organizations have achieved relatively low levels of effectiveness
in implementing SHRM practices ( Huselid, et al.). The rampant pace of
global competition, the speeds of technological developments, rapidly
changing demographics, and the incredible increase in information
technology have resulted in a business environment that changes day by
day, hour to hour. To remain competitive in such a dynamic business
environment businesses must continually improve their HRM systems and
organizational changes. If the propositions outlined above are supported,
then the real challenge for organization in the era of globalization is to pay
particular emphasis to strengthening their human resource by upgrading the
relevant competencies. Addressing these issues is a necessary step toward
facing the challenges of globalization in to the next millennium. (Sparrow,
Brewster and Harris, 2004)

Conclusion:

As the area of human resource management become more strategic and

more global it is becoming more important and critical to the organization.
While not all the companies are recognizing this yet, those that are most
effective and most admired, seem to be the ones that are adopting these
changes. As a consequence they are doing many things that make their
management of human resource as effective as possible.

The role of the HR manager must parallel the needs of the changing
organization. Successful organizations today are becoming more adaptable,
resilient, quick to change directions, and customer centered. Within this
environment, the HR professional must learn how to manage effectively
through planning, organizing, leading and controlling and human resource
and be knowledgeable of emerging trends in training and employee
development.

As a result of the increase technology, innovation and globalization over the

last 20 years, HR professional around the world are forced to be more
efficient, more effective and more competitive. They need to respond to the
demands of global competitiveness by becoming more familiar with
language skills, cultural awareness and diversity promotion. Additionally, HR
professionals must be committed to continuous learning being familiar with
cutting edge communication. If Human Resource Manager won’t pay enough
attention to their changing role, serious consequences could result, including
the deterioration or even perhaps elimination of the HR department.
Bibliography:
Buodreau, J.W. (1997). HR metrics and strategy. CAHRS Working Paper No.
97-21. Ithaca, NY: Cornell University School of Industrial and Labor
Relations, Center for Advanced Human Resources Studies. Retired from
http://digitalcommons.ilr.cornell.edu/cahrswp/162.

Beatty, R. W., & Schneier, C. E. (1997). New human resource roles to

impact organizational performance: From "partners" to "players." In D.
Ulrich, M. R. Losey, and G. Lake (Eds.), Tomorrow's HR management: 48
thought leaders call for change. Boston: Harvard Business School Press.

Baird, L., & Meshoulam, I (1988). Managing two fits of strategic human
resource management. Academy of Management Review, 13(1), 116-128.

Boudreau, J. W. (1996). Human resources and organization success. CAHRS

Working Paper No. 96-03. Ithaca, NY: Cornell University, School of Industrial
and Labor Relations, Center for Advanced Human Resource Studies.
Retrieved from http://digitalcommons.ilr.cornell.edu/cahrswp/174.

Challenger, John. Interview with John Challenger with Challenger, Gray &
Christmas, Human Resources Management News, 2004

Darling, J. R. (1999). Organizational excellence and leadership strategies:

Principles followed by top multinational executives. Leadership and
Organization Development Journal, 20(6), 309-321.

Delery, J. E & Doty, D. H. Modes of theorizing in strategic human resource

management: Tests of universalistic, contingency and configurational
performance predictions. Academy of Management Journal,
Dr. Dineshkumar Murugesan, 2000, 21st Century Workforce: Challenges for
HR
Solving them the TCS Way.

Fitz-enz, J. (1995). How to measure human resources management. New

York: McGraw-Hill.

Herzberg, F. (1966). Work and the nature of man. New York: Staples.

Helen Peters & Robert Kabacoff; HR leaders at the crossroads: remaining

relevant in the 21st century*.

Jack Welch, 2009, ‘Building a Competitive Organization through HRM

Initiatives: A Macro Perspective,

http://www.hrmbusiness.com/2009/08/building-competitive-
organizations.html

Jill Conner, Dave Ulrich, 1996, ‘Human Resource Roles: Creating Value, Not
Rhetoric’, Human Resource Planning, Vol. 19.

John Challenger, Dec 15 1999, 21st Century Presents Familiar HR

Challenges, p. 9

Kurzweil, Ray, 2005, Understanding the Accelerating Rate of Change,

(KurzweilAI.net)

Mayo, A. (2001). The human value of the enterprise: Valuing people as

assets: Monitoring, measuring, and managing. London: Nicholas Brealey.

O'Reilly, C. A., & Peffer, J. (2000). Hidden value: How great companies
achieve extraordinary results with ordinary people. Boston: Harvard
Business School Press.
O’Malley, Michael. Creating Commitment: How to attract and retain talented
employees by building relationships that last. 2004

Pfeffer, J. (1994). Competitive advantage through people--Unleashing the

power of the work force. Boston: Harvard Business School Press

Quinn, J. B. (1992). The intelligent enterprise--A new paradigm. Academy of

Management Executive, 6(4), 48-63.

Raymond Noe, John Hollenbeck, Barry Gerhart, and Patrick Wright, 2007,
Human Resource Management, 6th edition,

Spencer, L. M. (1995). Reengineering human resources. New York: Wiley.

Sparrow, Paul, R., Brewster, C., and Harris, H. (2004), ‘Globalizing Human
Resource Management’, London, Routledge

Sims, R.S. & Sims, S. J Changes and Challenges for the Human Resource
Professional. Personnel Psychology