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By Dr. Debashish SenguptaHuman Resource Management

The New Age HRM2CHAPTER

Human Resource Management3Key Terms

Brand Ambassador Corporate brand Effective Communication Effective Processe Employee Pride The 10 E Model

Human Resource Management4The nature and scope of human resource management has undergone a serious transformation in the past couple of decades. What used to be once a purely hire and fire function mostly executed by administrative people has changed into treating employees as assets or resources and managing them in a way so as to create competitive advantage for the firm and win-win proposition for both. The purely back-office personnel function has changed into a strategic board room game. HRM from being a game-bench has changed into the new game-changer.

Human Resource ManagementCustomer to Employees: New Age New Roles5

Human Resource Management6Employees have changed from workers to value-creators. As a result the role of manager and the CEO have also undergone a transformation. In the earlier concept of customer being the king, although the customer had been given the ultimate tag, however that did not ensure that the king would end-up on the winning side always. The new wisdom however ensured that the customer (minus the decorative tag) always end-up as the winner in the process, something every business-firm would badly want today in the era of competition to seal better customer loyalty and retention. Through this chapter we shall try to explore why this change has happened in the very fabric of managing people, what drove that change and what are the new roles that HR has to don in the changed context.

Human Resource ManagementNew Age HRM Model (Relationship between HR imperatives,Business Imperatives & Macro-environment)

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Human Resource Management8The macro-environmental variables like Political factor, Economic factor, Social Factor, Cultural Factor, Legal factor and Technological factor influence the business imperatives of any firm. This shapes the business strategy of the firm which consequently shapes the HR imperatives or the HR strategy. To understand the new age HRM it is important to understand the dynamics of the New Age HRM Model.

Human Resource ManagementPolitical Factors

9Political factors determine how and to what degree a government intervenes in the economy. Political factors include areas such as

Tax policyLabour lawEnvironmental lawRegional blocksTrade restrictions & TariffsPolitical stability

Human Resource ManagementBusiness Imperatives Driven by Changed Political Climate

10Based on the above changes in the political context the following imperatives have become a part of the business.1. A business should understand the political undercurrents and not just read policy changes. The example of Tata Nano - Singur case excellently describes the impact of the undercurrents on business.2. It is necessary for a business to ensure that the political neutrality and policy (concrete steps) are aligned, so that the business runs smoothly.

Human Resource ManagementHR Imperatives Driven by Political Context

11The HR imperatives as a result of the changed political climate and the business imperatives necessitated by the same are as follows:1. Managing Cultural Change Since now organizations have a diverse workforce its necessary for businesses to manage the cultural change happening. Recruitment: Also now that businesses are spread across the globe it is necessary that care be taken while recruiting a diverse workforce and accepts the culture with an open mind.

Human Resource Management122. Talent ManagementDue to the dynamic nature of workforce it is necessary that organizations have an appropriate talent management strategy to acquire, develop, retain and replenish the workforce.

Personal Development: that there is a shift from collectivism to individualism it is necessary organizations focus on an individuals careerdevelopment, develop future leaders etc.

Human Resource Management133. Structural Change in Organization

With reduced political barriers it is an imperative that businesses have:

A flat hierarchy The power distance be reduced Empowerment of employees Communication barriers be reduced

Communication should be Instant (decisions be made quickly and also feedback be provided stantaneously) and transparent.

Human Resource Management144. Training and DevelopmentWith changing business context it is necessary that employees be trained to sustain in the market with the changing technology. Also they are provided cross functional training, so that they can be employed with the changing business needs. 5. Employee EngagementFor the success of a business it is necessary that the workforce be highly engaged and therefore it is the need of every business to keep its employees engaged.Employee engagement is necessary to make the employees aware of various business activities, manages employee turnover and boost business growth.

Human Resource Management156. Increase in Use of Temporary Employment PracticesBusinesses are moving towards a temporary workforce due to various reasons. They are easy to hire, flexible to any work timings, though they have high pay rates and they are low cost to the company in the long run.7. Focus on Key PlayersAgain as already discussed this is a part of the talent management strategy where the businesses target the key players rather than the not so important players and their focus is on retaining them. This will help the organisation in succession planning.

Human Resource Management168. Increasing use of Technology and BusinessIntelligence

Organisations are increasingly looking to technology to enhance performance and fill skills gaps. As a result HR is also using technology for organisations advantage. This can provide the organisation a competitive edge and lowers the cost of HR operations. The development of HR technologies is helping to transform HR into a decision science with a measurable impact on business results. This creates new roles for HR professionals and the imperative to develop strong HR technology competencies.

Human Resource Management17The wide range of impact of technology on HR can be clearly viewed on the HR functions such as:

RecruitmentTraining & developmentPerformance managementPayroll & attendance records

Human Resource ManagementEconomic Factors

18There have been several changes in the global economy as compared to earlier centuries. Some of them are as follows:

1. Globalisation: Globalization refers to the increasing unification of the worlds economic order through reduction of such barriers to international trade as tariffs, export fees, and import quotas.

Human Resource Management192. Monetary Policies: Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. Monetary policies of various countries change significantly according to the prevailing economic situation.

Human Resource Management203. Explosion in Stock Markets: With the event of free trade and globalisation across the world, there has been a significant change in stock markets of various countries. Due to availability of capital for companies due to portfolio investments and FIIs there is an explosion in stock markets.

Human Resource ManagementBusiness Imperatives Driven by Changed Economic Climate

21These thrusts of activities are critical to arriving at stated objectives in the business. These are the drivers of business and the principles by which the business acts and thinks, not the actions it takes.1) Need to Operate across National Boundaries: With the advent of globalization, a business firm needs to expand its operations across the national boundaries in order to gain competitive advantage and sustain its business. 2) Shift Manufacturing and Service Bases: Outsourcing of service base as a cost reduction procedure by the organization is getting increasingly prevalent.

Human Resource Management223) Cost is a Major Issue and Optimizing Cost is Very Important: Companies nowadays retain the core department such as R & D and outsource the non-core ones such as Customer Service. This again acts as a cost reduction benefit to the company.4) Ensuring Presence of Emerging Markets like China, India, Brazil etc.: Developing markets such as China, India and Brazil are hot seats for FDIs and FIIs. Multinational companies are realizing the market potential of these countries and are expanding their market base to these nations.

Human Resource ManagementHR Imperatives Driven by Economic Environment

23With the various changes in the macroeconomic variable there has been significant strategies developed by the corporate. Any strategy developed makes an impact on the HR policies and practices. Some of the HR imperatives are:1) Increase Focus on Manpower Management: There has been a significant increase in focus on manpower management. Practising good manpower management or Human Resource Management (HRM) enables managers of an enterprise to express their goals with specificity, increasing worker comprehension of goals, and provide the necessary resources to promote successfully accomplishment of said goals.

Human Resource Management242) Innovative Flexibility in Work Environment: Flexibility in work environment brings a culture of creativity and innovation in the work culture. In todays competitive environment innovation plays a major role in bringing a core competency for the company in market. 3) Increased Focus on Learning Culture: There has been an increased focus on employees. Due to this reason organisations are focusing on development of skills. Training and development is now an integral part of HR department.

Human Resource ManagementSocial Factors

25Social change refers to an alteration in the social order of a society. This change is facilitated by the interaction between various other macro environment factors. This change can be measured on the basis of the following criteria-Social Relations: Social relations focus on the behaviours and needs, those that primarily concern themselves with how people organise and make meaning of their world and their relationships within it

Human Resource Management

Business Imperatives Driven-by Changed Social Context

26The business imperatives as a result of the social changes can be captured as:

1. Need to alter offerings (products, services, jobs) keeping demographic realities in mind.2. Need to innovate new product designs and Service offerings.3.Need to cater to aspirations of middle-class4.Need to integrate social media in marketing.5.Need to have flatter and flexible organizations.

Human Resource ManagementHR Imperatives Driven by Social Context27Companies like IBM having equality policies in their manual under which homosexuals, third gender and under-privileged people are treated and recruited with equal rules and procedures. IBM has even received awards for respecting the diversity. The Hispanic, blacks, homosexuals and third gender are treated with same respect and motivated to participate more in the organization.

Human Resource Management281. Social Recruiting: The Society for Human Resource Management (SHRM) reports that the number of companies using social networking sites, including Linked in, Face book and Twitter, to recruit increased from 34% in 2008 to 56% in 2011. In addition, the number of companies who dont plan to use social recruiting dropped from 45% to 21% during the same time period.

Human Resource ManagementCultural Factors

29The cultural changes on a broad level may be described as following:

1. Mindset Change: People have become more broad minded and more acceptable in nature and also more tolerant towards different cultures.2. Woman Participation: The participation of women is being encouraged in organizations. They are taking up important roles and their contribution is being recognized.

Human Resource ManagementBusiness Imperatives Driven-by Changed Cultural Environment

301. Cross Cultural Management: With multi-cultural interactions becoming more and more imminent, the need to understand, appreciate, educate and create awareness about cross-cultural issues is a business imperative.2. Presence on Social Networking Websites: Social networking websites are the new Communities of change. Companies are increasingly realizing the need to connect with people through such sites in order to appreciate better the cultural nuances.

Human Resource ManagementHR Imperatives Driven by Cultural Context

311.Decentralised Policies: Empowered, multi-cultural workforce has necessitated the decentralisation of the policies. Companies are adapting to policies according to the different cultures, legality, working hours, e.g., US hourly, India Monthly, holiday policy

Human Resource ManagementLegal/Regulatory Factors

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Human Resource ManagementBusiness Imperatives Driven-by Changed Legal/Regulatory Climate

33In light of the changes in the legal/regulatory environment businesses face the following imperatives:

1. Flexible in Corporate Governance and Expansion: As a result of globalization, businesses now have the opportunity to expand beyond their national boundaries and adapt to the type of regulations followed in that particular country.

Human Resource Management1. Ease of Trade

34The change in legal frameworks regarding International Trade has led to increased freedom for countries to look beyond their own boundaries andform trade relations with each other. Liberalization and Privatization policies led to increased flexibility in the trade and labour laws, which in turn encouraged cross-boundary business. For example in India, pre-liberalization era mandated about 129 approvals for the initiation of an Import or Export business, whereas now the count of approvals required has come down to a reasonable and convenient number of just 25, for the same.

Human Resource Management2. Restructuring

35of Legal FrameworksThe structure of all legal frameworks, global as well as domestic, have undergone a transformation with the aim of making them more direct, organized and specific. This helps in not only covering loopholes, but also to make them easier to be followed.of Business ProcessesThe business processes too have gone through a transition making them more organised, better managed, cost-effective and more adaptable to the changing legal scenarios universally.

Human Resource Management3. Security

36of PrivacyIn a world which is getting smaller, preserving personal space and privacy of individuals is becoming a major concern. Countries around the world are trying to come up with laws to contend with this problem.of AgreementsUniversally applicable laws have ensured their uniformity and acceptance around the globe, hence making agreements and contracts safer.

Human Resource Management4. Parity

37for NationsThe WTO has brought all the nations to an equal platform, irrespective of them being a Developed, Transition or Developing Economies. It has provided the Third World countries with the opportunity to indulge in trade practices with the more economically powerful nations of the world.for OrganisationsThe legislation of any nation decrees all its laws to be equally applicable to all businesses within it. The various Trade and Labour laws are mandatory for organisations to be part of global trade.

Human Resource ManagementHR Imperatives Driven by Legal Environment38The HR response in the face of changed legal/regulatory environment and the altered business scenario should be- 1. How to align the organizational strategy with the regulatory framework?a. Aligning individual goals to organizational goals.b. Take necessary steps required in order to sustain at that point of time.2. How to tabe proactive measures to adapt to the dynamic legal/ regulatory environment?

Human Resource ManagementTechnological Factors

39The technological environment has perhaps undergone the greatest and fastest transformation world-wide. Technology is into everything and firms that have not been able to keep pace with the same have been forced to exit the business. Consider this for an example - EMI pioneered the innovation of the CT scanner in 1972. Despite a strong market position in early years, by 1977, EMI was forced to exit the scanner business.

Human Resource Management39Human resource managementTechnology Factors

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Human Resource ManagementInnovation Pizza

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Human Resource ManagementHR Imperatives Driven by Technological Context

421. How to connect with Business and Organizational Strategy?

Consider these two statements:

A. Based on Aon Hewitts research, more the 60% of HRs time is transactional, administrative in nature. In addition, HR is often not included. B. Up to 70 percent of a companys market value can come from intangibles such as its human capital, its brand, and its culture.

Human Resource ManagementGrassroots Innovation

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Human Resource Management442. How to Create Non-threatening but Accountable Systems?Technology is always leveraged by an innovation culture in the organization, which in turn is only possible when people have freedom to think radicallyand express the same; freedom to differ; freedom to experiment; freedom to act. Non-threatening but accountable systems always pull people to

Human Resource Management453. How to Develop and Replenish Contemporary Skill Inventory?

There is a need to develop and replenish contemporary skill inventory in employees to

A.Remain in a state of technology readiness always.B. Create high-performance work systems.C. Develop expertise that pervades organizational needs.D. To out-wit the competition, by accelerating speed of development and execution.

Human Resource Management464. How to Build Entrepreneurial Environment?

Amazon.com CEO Jeff Bezos said that at Amazon the entrepreneurial mindset pervades the organization and he wants each and every employee to fulfill his/her responsibilities with an entrepreneurial perspective. We have entrepreneurs at every level. Everyone must look for and find ways to do their work better than its ever been done before and to do that as often as possible. The entrepreneurial mindset means that every employee thinks himself or herself as an entrepreneur and does things the better next time, whenever he does that again.

Human Resource ManagementNew Age HRM Roles

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Human Resource Management