At L’oreal, success starts with people. Our people are our most precious asset.

Respect for people, their

ideas and differences, is the only path to our sustainable long-term growth." With the lessons we’ve had
in the previous modules, it is safe to say that an important factor in keeping a business going is its
people. Businesses manage its people through human resource management. Let us take a closer look
on its importance.

IMPORATNCE:

A comprehensive study have concluded that people oriented HR gives an organization an edge by
creating a superior shareholder value.

Achieving competitive success through people means managers must change how they think about their
employees and how they view the work relationship. They must work with people and treat them as
partners, not just as costs to be minimized or avoided. That’s what people-oriented HR organization do.

Even if an organization doesn't use high-performance work practices, other specific HRM activities must
be completed in order to ensure that the organization has qualified people to perform the work that
needs to be done activities that comprise the HRM process. 

With the organization's structure in place, managers have to find people to fill the jobs that have been
created or to remove people from jobs if business circumstances require. If an organization doesn't take
its HRM responsibilities seriously, performance may suffer. All managers engage in some HRM activities
such as interviewing job candidates, orienting new employees, and evaluating their employees' work
performance, even if there is a separate HRM department.

Diagram

- The first three activities (HUMAN RESOURCE MANAGEMENT, recruitment, selection) ensure that
competent employees are identified and selected; 
the next two (orientation and training) involve providing employees with up-to-date knowledge
and skills; 
and the final three (performance management, compensation and benefits and career
development) ensure that the organization retains competent and high-performing employees.

The economic slowdown has made filling a job opening an almost mind-boggling exercise.

Such is the new reality facing HRM. The entire HRM process is influenced by the external environment.
Those factors most directly influencing it include the economy, employee

labor unions, governmental laws and regulations, and demographic trends.

Economy. The global economic downturn has left what many experts believe to be an enduring mark on
HRM practices worldwide. For instance, in Japan, workers used to count on two things: a job for life and
a decent pension. Now, life time employment is long gone and corporate pension plans are crumbling.9
In European Union member countries, it’s anticipated that the jobless rate will continue to increase,
with Spain being hit hardest.10 And in Thailand, employees in the automotive industry dealt with
reduced work hours, which affected their pay and their skill upgrades. Many of these jobs are temporary
or contract positions, rather than full-time jobs with benefits.

LABOR UNIONS

If negotiations between management and the union didn't resolve the disputes over work practices,
then employees vowed to hit the airline with more strikes during the busy summer period. Factory
workers, who had been "pushed to work 12-hour days, six days a week on monotonous low wage
assembly line tasks, are pushing back." Work stoppages, labor disputes, and negotiations between
management and labor are just a few of the challenges organizations and managers face when their
workforce is unionized.

LEGAL ENV

Exceptions can occur only in special circumstances. The issues, however, are rarely that clearcut. As you
can see, a number of important laws and regulations affect what you can and cannot do legally as a
manager. Because workplace lawsuits are increasingly targeting supervisors, as well as their
organizations, managers must know what they can and cannot do by law.

Trying to balance the "shoulds and should-nots" of many laws often falls within the realm of
AFFIRMATIVE ACTION. That is, an organization refrains from discrimination and actively seeks to
enhance the status of members from protected groups. Although laws have helped reduce employment
discrimination and unfair work practices, they have, at the same time, reduced managers' discretion
over HRM decisions.

MAJOR LAWS

1. For instance, one employer disclosure requirement says that by 2012, all employers must
disclose the value of the benefits they provided in 2011 for each employee’s health insurance
coverage on the employees’ annual Form W-2s. Other parts of the law include compliance
deadlines for additional specific information that must be disclosed or provided and protections
for employees who provide information or testimony about possible employer violations of Title
1 of the law
2. Another proposed law—the Work–Life Balance Award Act—is still being debated. This particular
piece of legislation would highlight the importance of workplace flexibility issues.
3. The other proposed law stalled in Congressional debates—the Employee Free Choice Act—
would amend the National Labor Relations Act and make it easier for workers to form a union.
Other laws in other countries:
1. Canadian laws pertaining to HRM practices closely parallel those in the United States. The
Canadian Human Rights Act prohibits discrimination on the basis of race, religion age,
 marital status, sex, physical or mental disability, or national origin. This act governs practices
throughout the country.
2. In Mexico, employees are more likely to be unionized than they are in the United States.
Labor matters in Mexico are governed by the Mexican Federal Labor Law. One hiring law
states that an employer has 28 days to evaluate a new employee’s work performance. After
that period, the employee is granted job security and termination is quite difficult and
expensive.
3. Our final example, Germany, is similar to most Western European countries when it comes
to HRM practices. Legislation requires companies to practice representative participation, in
which the goal is to redistribute power within the organization, putting labor on a more
equal footing with the interests of management and stockholders. The two most common
forms of representative participation are work councils and board representatives. Work
councils link employees with management. They are groups of nominated or elected
employees who must be consulted when management makes decisions involving personnel.
Board representatives are employees who sit on a company’s board of directors and
represent the interests of the firm’s employees.

Demographic trends are impacting HRM practices, worldwide. Much of the changes in the workforce
was brought by the laws such as the ones we have previously discussed. With these laws, avenues
opened up for minority and female job applicants. These two groups dramatically changed the
workplace in the latter half of the twentieth century. Women, in particular, have changed the
composition of the workforce as they now hold some 49.1 percent of jobs. And that percentage may
increase as some 82 percent of jobs lost during the economic crisis were ones held by men. Why the
disproportion? Because women tend to be employed in education and health care industries, which are
less sensitive to economic ups and downs.27 If this trend continues, women are set to become the
majority group in the workforce.

Workforce trends in the first half of the twenty-first century will be notable for three reasons:

(1) changes in racial and ethnic composition,

(2) an aging baby boom generation, and

(3) an expanding cohort of Gen Y workers.

By 2050, Hispanics will grow from today’s 13 percent of the workforce to 24 percent; blacks will increase
from 12 percent to 14 percent, and Asians will increase from 5 percent to 11 percent. Meanwhile, the
labor force is aging. The 55-and-older age group, which currently makes up 13 percent of the workforce,
will increase to 20 percent by 2014.

However, labor force analysts who had predicted a mass exodus of baby boomers into retirement have
pulled back somewhat on those forecasts, especially since many baby boomers lost significant personal
financial resources as the economy and stock market floundered. Many baby boomers are postponing
retirement until they can better afford it. Another group that’s having a significant impact on today’s
workforce is Gen Y, a population group that includes individuals born from about 1978 to 1994. Gen Y
has been the fastest-growing segment of the workforce—increasing from 14 percent to over 24 percent.
With Gen Y now in the workforce, analysts point to the four generations that are working side-by-side in
the workplace28: The oldest, most experienced workers (those born before 1946) make up 6 percent of
the workforce. The baby boomers (those born between 1946 and 1964) make up 41.5 percent of the
workforce. Gen Xers (those born 1965 to 1977) make up almost 29 percent of the workforce. Gen Yers
(those born 1978 to 1994) make up almost 24 percent of the workforce. These and other demographic
trends are important because of the impact they’re having on current and future HRM practice