THE CHALLENGES IN HUMAN RESOURCES

MANAGEMENT

Prateek Goel

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HUMAN RESOURCES MANAGEMENTHuman Resources Management

(HRM)The process of managing human resources (human capital and intellectual assets) to achieve an organization’s objectives.

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NEED FOR HRMStaffing the organizationDesigning jobs and teamsDeveloping skillful employeesIdentifying approaches for

improving their performanceRewarding employee success

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Challenges and Human Resources Management

The most pressing competitive issues facing firms:

1. Going global

2. Embracing new technology

3. Managing change

4. Managing talent, or human capital

5. Responding to the market

6. Containing costs

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CHALLENGE 1: GOING GLOBAL

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Challenge 1: Going GlobalGlobalization

◦The trend toward opening up foreign markets to international trade and investment

Impact of globalization◦“Anything, anywhere, anytime”

markets◦Partnerships with foreign firms◦Lower trade and tariff barriers

NAFTA, EU, APEC trade agreements WTO and GATT

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Challenge 1: Going Global (cont’d)Outsourcing workCorporate Social Responsibility

◦The responsibility of the firm to act in the best interests of the people and communities affected by its activities

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Challenge 1: Going Global (cont’d)Impact on HRM

◦Issues: Identifying capable managers and

workers Developing foreign culture and work

practice training programs. Adjusting compensation plans for

overseas work

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Challenge 1: Going Global (cont’d)

Workforce diversity◦Different geographies, cultures, laws,

and business practices

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Challenge 2: Embracing New Technology

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Challenge 2: Embracing New TechnologyKnowledge WorkersKnowledge-Based Training

Online instruction “Just-in-time” learning via the Internet

on company intranets

Influence of Technology in HRM

Human Resources Information System (HRIS)◦Benefits:

Store data. reconfigure data organizational knowledge. Easier communications. administrative costs

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Most Common HR Information Systems Applications Payroll Benefits administration Benefits enrollment Recruiting—applicant tracking Personnel administration Training and development Employee self-service Manager self-service

HRM IT Investment FactorsAbility to upgrade

Compatibility with current systems

Availability of technical support

Time required to implement and train staff members to use HRIS

Initial and annual maintenance costs

Training time required for HR and payroll

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Coping up with IT

Efficient IT DepartmentProper training Upgrading OASTracking new developments

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Challenge 3: Managing Change

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Challenge 3: Managing Change

Causes for change

Mergers and acquisitionDiversification of an organizationOrganization designChanges in strategyChange in management team

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Challenge 3: Managing Change

Responses to change

Reactive response Response that occurs after external

forces have already affected the performance.

Proactive response Response initiated to take advantage

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Challenge 3: Managing Change (cont’d)Why Change Efforts Fail:

◦ Not establishing a sense of urgency.◦ Not creating a powerful coalition to

guide the effort.◦ Lacking leaders who have a vision.◦ Lacking leaders who communicate

the vision.◦ Not removing obstacles to the new

vision.◦ Declaring victory too soon.

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Challenge 4: Managing Talent, or Human Capital

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Challenge 4: Managing Talent, or Human Capital

Human Capital◦The knowledge, skills, and

capabilities of individuals that have economic value to an organization.

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Challenge 4: Managing Talent, or Human Capital(cont’d)

Importance of Human Capital or Talent◦Based on company specific skills.◦Can be expanded through

development.◦There is a demonstrated relationship

between better talent and better business performance.

◦Talent is rapidly increasing the source of value creation.

◦Change in employee expectation.

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Challenge 4: Managing Talent, or Human Capital(cont’d)

Human Capital, if not retained◦High attrition rate.◦Loss of valuable human asset.◦Loss of secret information.

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Challenge 4: Managing Talent, or Human Capital

Managing Human Talent through-◦Putting right people in right job.◦Employee Reward program.◦Career development program.◦Performance based bonus.◦Loyalty bonus.◦Giving voice to knowledge Bank.◦Employee recreation.◦Gifts at some occasion.◦Regular survey or feedback. 1–

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Challenge 5: Responding to the Market

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MARKET

Challenge 5: Responding to the MarketTotal Quality Management (TQM)

◦set of principles ◦understanding customer needs◦doing things right ◦continuous improvement.

Six Sigma

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Challenge 5: Responding to the Market (cont’d)

Reengineering and HRM Requires that managers create an

environment for change. Depends on effective leadership and

communication processes. Requires that administrative systems be

reviewed and modified.

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Challenge 6: Containing Costs

Challenge 6: Containing CostsDownsizing

◦The planned elimination of jobs (“head count”).

◦LayoffsOutsourcing

◦Contracting outside the organization to have work done that formerly was done by internal employees.

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Challenge 6: Containing Costs (cont’d)Employee Leasing

◦The process of dismissing employees who are then hired by a leasing company

Off shoring◦The business practice of sending

jobs to other countries.

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Challenge 6: Containing Costs (cont’d)Hidden Costs of Layoff

◦Severance and rehiring costs

◦Accrued vacation and sick day payouts

◦Pension and benefit payoffs

◦Potential lawsuits from aggrieved workers

◦Loss of institutional memory and trust in management

◦Lack of staffers when the economy rebounds

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THANK YOU

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