Environment of Human Resource Management

Chapter 2

Environment of HRM
Is an important variable in the HRM Model
Is nothing but all those forces which have their bearing on the functioning of the HR Dept. Analysis of Environment : Useful for HR managers to be proactive and not reactive in todays world of change and competition

ENVIRONMENT OF HRM
External : 1.Political and Legal 2.Economic 3.Technological 4.Cultural Internal : 1.Unions 2.Organisational Culture and Conflict 3.Professional Bodies

External Forces
1. Political and Legal: In a democratic set up there are three institutions which constitute the political environment a. Legislature b. Executive c. Judiciary

a. Legislature : The parliament at the Center and Assembly at the state level b. Executive : is the Government- the law implementation body. c. Judiciary : Watchdog to see if both function in confines of the constitution.

External Forces
2. Economic : All economic forces which have bearing over HR functions. Growth, Strategy, industrial production, agriculture, population, national and per capita income, money and capital markets, suppliers, competitors, customers, and industrial labour.

External Forces
a. Suppliers : those who provide human resources to the organization- Employment Exchange, Universities, Colleges, training institutes, consulting firms, labour contractors, competitors. The type of employees the organisation employs depend on the suppliers. b. Competitors : as number of organisations competing for HR increases, so does importance of staffing, appraisal and compensation activities.

External Forces
c. Customers : influences companys personnel functions. Customers need high quality products at the reasonable price. Organisations have to offer products which will result in customer delight. Sales are affected by product quality which is directly related to the skills and knowledge of the employees.
Eg:

Motor Industries Quality principles

Limited,

Bangalore-

d. Industrial Labour : Changes Commitment to industry, Protective Legislation, Economic and Social Status, Employment Pattern ,Unionisation

External Forces
e. Globalisation : has considerable influence on HR functions. Employee hiring, training, motivation, compensation and retaining are guided by the global perspective.
Execute companys strategy on a global scale.

External Forces
3. Technological : Systematic application of organized knowledge to practical tasks. Jobs become more intellectual Dislocate workers unless they become well equipped to work on new machines Acquainted workers find the job challenging and rewarding. Impacts human relations- processes decide who will be close to whom. Job holders become highly professionalized and knowledgeable. Eg: L&T-20000 employees

External Forces
4. Culture : is complex whole of knowledge, belief, art, morals, laws, customs and other capabilities and habits acquired by individuals as members of the society. Culture creates the type of people who become members of the organisation. Tatas, Birlas, Ambanis Attitude of the workers is a result of the cultures. Time orientation roots in culture, Britishdiscipline, Japan-futuristic Work ethics, achievement needs and effort reward expectation are results of culture.

Internal Forces
1. Unions : Organisations practices are influenced by its own Unions. 2. Culture and Conflict : Culture is product of organisations features- people, its success and failure. A few values and beliefs shape its culture. Tata: Get the best people and set them free L&T : Professionalism Reliance : Competitive spirit IBM: service GM : product innovations

Internal Forces
Often there is conflict between organisational culture and employees attitude. Conflict arises due to. Personal goal vs organisational goals Personal ethics vs Organisational ethics Rights vs duties Obedience vs self respect Discipline vs autonomy Self-confidence vs arrogance Actualisation vs aggrandisement Authority vs accountability

Internal Forces
Leadership vs followership Delegation vs abdication Participation vs anarchy Feedback vs abuse Cleverness vs wisdom Grooming vs pampering Doing vs becoming Material benefit vs spiritual loss Change vs stability Short term vs long term

Internal Forces
3.Professional Bodies
NIPM : supply of academic inputs, courses etc. code of ethics for HR professionals

Organisational Scanning

Individual Assignment
Globalization and its impact on Human Resource Management. Performance Appraisal an effective tool to measure employee effectiveness. Future of Human Resource Management in India. Training leads to development. Managing employee hiring in the competitive environment. Human Resource Management in IT Companies.