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EXCEL BOOKS

Chapter

HRM IN A DYNAMIC ENVIRONMENT

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ANNOTATED OUTLINE

INTRODUCTION
Organisations are open systems and are, therefore, influenced by the environment (internal as well as external ) in which they operate.

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External and internal factors influencing the Personnel function


External factors         Technological factors Economic challenges Political factors Social factors Local and Governmental issues Unions Employers demands Workforce diversity Internal factors      Mission Policies Organisational culture Organisation structure HR systems

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Technological Changes And HRM


Technology includes tools, machinery, equipment, work procedures and employee knowledge and skills. The impact of technology on HR can be profound, as the following things clearly reveal:  New skills, knowledge, experience and expertise required to gain the edge over rivals.  Downsize operations, cut organisational layers and cut the extra fat to survive in a competitive world  Collaborate and achieve teamwork  Relocate work from the office to the home  Internet and intranet revolution

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How to deal with a human resource surplus situation?


Why?
 Automation  Restructuring  Mergers

Consequences?
 Cuts payroll expenses  Eliminates extra layers  Improves functioning if firms product and service profile is good  Shocks those left out  Shattering impact on employee motivation and morale if not managed properly   

Managing Survivors of downsizing


Bitterness, anger, disbelief and shock need to be handled properly Give information as to why the action had to be taken Tell how it is going to help the firm and employees in the long run.

 Acquisitions  Competitive Pressures

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Role of HR in a virtual organisation


A virtual organisation is a network of companies or employees connected by computers. Virtual workers work from home, hotels, their cars, or wherever their work takes them. The human resource function plays a unique role in a virtual organisation: 
Psychological fit: The lack of face-to-face interaction in a virtual organisation, virtually compels HR professionals to determine the psychological fit between different units initially. System alignment: Given the lack of physical proximity, it becomes even more critical that the organisation's mission, vision and measures be aligned and that all parties are familiar with these issues; the HR function can play an important role in this task. Reconsider rewards: In a virtual unit, very few permanent positions exist. In many cases, the organisation will be staffed with workers having different motivational forces. So rewarding each entity in an effective way becomes an important job. Cont

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Role of HR in a virtual organisation


 Reconsider staffing needs: In a virtual organisation, most employees work on a contractual basis. Finding people with requisite skills, knowledge and motivation levels becomes an important activity. Build partnerships: Virtual, teams have to be built from scratch paying attention to their unique requirements. The concept of employment needs to be replaced by the concept of 'partnership' especially when most tend to work independently away from the permanent employees or owners of the organisation Develop leaders: Leaders become the major forces for building trust, creating a mission and instilling a sense of belonging to the organisation. HR can play a major role in ensuring that leaders assume these responsibilities and meet them in an effective way.

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Total Quality Management Programmes


TQM is a way of creating an organisational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality and customer satisfaction.

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TQM: The main ideas

     

Do it right the first time Be customer oriented Make continuous improvement a way of life Build teamwork Empower people Create a climate of trust, an atmosphere for innovation

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Total Quality HR Approach

The Total Quality HR Approach is all about employee participation and empowerment, carried out in a sincere and wholehearted manner. Rewards are designed to meet employee needs. Employees are treated like customers. 360 degree appraisals are carried out before picking up the best performing teams. Small ideas and improvements are encouraged.

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Quality snaps of Indian companies


Name of Company
1. Indo-Gulf Fertilizers Ltd

Efforts toward TQM


Upgrading technology; training people; monitoring cost, quality and delivery criteria; participative management, HRD; ISO 9002 Certification, first fertilizer company to get this in India; Shaktiman Krishi Seva Kendras in UP, Bihar and West Bengal. First to get ISO 9001 certification, in Dec 93; Strict metal parts quality control; 100% checking of insulators for testing their strength; strict quality assurance tests; high quality testing labs, etc. SUMO model Jeeps manufactured here according highest priority to ISO 9000 certifications; training and self-inspection given top priority. Implemented TQM in 1995; first step was moving toward international quality system standards ISO 9000; total employee involvement; creation of self managing mini, micro and megateams; got the European Quality Award; Kaizen and suggestion schemes introduced followed by rewards and recognition system; regular surveys of employee motivation levels accompanied by customer surveys

2. Bharat Heavy Electricals Ltd (BHEL)

3. TELCO (Lucknow)

4. Philips India Ltd

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Benchmarking
Effective implementation of TQM requires benchmarking. The essence of benchmarking is striving to be the best of the best in ones area of operations. It is a continuous process of measuring products, services and practices against the toughest competitors or industry leaders with the aim of mutual improvement.

Reengineering
The primary focus of TQM is on continuous improvement or ongoing incremental change. Reengineering is all about achieving this. Actually speaking, reengineering takes place when more than 70 per cent of the work processes in an organisation are evaluated and altered. The focus is on simplifying operations and making them more efficient and customer oriented.
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Essentials of reengineering
        Give people a mission; a clear view of how to achieve that mission. Either serve the customer superbly or dont even try. Change is the way of life. It is not a process, it is a value. Technology is never really a problem. The problem is how to use technology effectively. The wrong answer rarely kills you. What it does is waste time. The weak link in reengineering is will. Once people catch on to reengineering, you cant hold them back. Its a lifetime opportunity. In India TELCO, TISCO, L&T, Ranbaxy and Crompton Greaves have successfully brought about radical changes through Reengineering.

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Flexible Manufacturing systems


It is the integration of computer aided design, engineering and manufacturing to produce low volume products at mass production costs. In such a scenario, employees need to acquire skills and get trained constantly. One should be capable of handle a variety of tasks.

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Economic, Political And Social Challenges And HR


Now-a-days, people, goods, capital and information are moving around the globe as never before. Global competition is making every firm to think in terms of gaining an edge over rivals by producing high quality goods at a very competitive price. This is where the people dimension comes into being. Incentives, favourable work climate, team spirit, freedom to think and act independently, and a host of other HR initiatives are needed to keep talent from flying away.

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What HR managers can do ?


    Use workforce skills and abilities in order to exploit environmental opportunities and neutralise threats. Employ innovative reward plans that recognise employee contributions and grant enhancements. Indulge in continuous quality improvement through TQM and HR (training, development, counselling, coaching etc.). contributions

Utilise people with distinctive capabilities to create unsurpassed competence in an area (Xerox in photocopier, 3M in adhesives, Telco in trucks, Britannia in biscuits, Nestle in coffee, McDonalds in fast foods, etc.). Decentralise operations and rely on self managed teams to deliver goods in difficult times (Motorola is famous for short product development cycles. It has quickly commercialised ideas from its research labs). Lay off workers in a smooth way, explaining facts (IBM, Kodak, Xerox, AT&T, Steel and Textile firms in India etc.) to unions, workers and other affected groups. HR generally plays a key role, these days, in planning and implementing corporate downsizings, and then in maintaining the morale of the remaining employees.

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Political factors
Political stability Formation of new political parties Influence of politicians over Productivity linked wage agreements Political parties sympathetic to trade unionism Opposition to VRS schemes, downsizing operations, restructuring exercises.  Freedom to show the door to unwanted people     

Social factors
 Conducting business in a socially relevant and responsible way.  Hire qualified people or hire inexperienced local people and train them to avoid trouble?  Helping economically poor people, unemployed, underprivileged ones, etc.
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Local and government-related factors


  Meet legislative requirements Offering jobs to certain sections of local community

Trade unions
 Demands for higher wages, better working conditions, incentives, benefits, services

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MANAGING WORKFORCE DIVERSITY


The workforce is becoming increasingly diverse now and organisations are doing their best to address employee concerns and to maximise benefits of different kind to employees with diverse educational, cultural and religious backgrounds. The diversity issues, mainly, include the following:        Composition In terms of age, caste, education, culture, region, religion Minority groups Economically backward groups Displaced persons Child labour Contract labour Women employees

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Ways to cheer up women employees


     Provide alternative career paths Offer extended leave facilities so that they can meet their pressing commitments according to their convenience Allow female workers to create their own schedules and process work at home Create flexible work arrangements Permit job sharing especially in case of relatively independent tasks such as filing, faxing, word processing, photo copying etc.

In order to benefit from diversity, managers should recognise the potential concerns of employees and make sure that the exchange between the organisation and employees is mutually beneficial and satisfying.
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INTERNAL ENVIRONMENT AND HR


Organisations are also influenced by a variety of internal factors relating to strategy, culture, structure etc.
     Mission and Strategy Internal Policies Organisational Culture Organisation structure Human resource systems

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Designing appropriate HR systems


Issue         Nature of employment Recruitment Selection Training and employee development actions Degree of participation Incentives Job security Employee welfare : : : : : : : : Focus on Job/Career Internal/external/both Merit/other considerations 6 months/yearly Regular/irregular/need based Top down/bottom up Individual merit/group output Lifelong employment/need-based jobs Be a model employer (offer those that are needed by law.)

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