HRM-CHALLENGES

What are the challenges facing HRM? / Explain the changing role of HRM?

The 1990s have brought a revolutionary change in our business. Post- liberalisation is marked by a shift from command economy to market driven economy; from sheltered market to competitive market; from monopoly to competition; and from domestic trade to global trade. Such a shift calls for a different approach to HR activities. During the pre-economic liberalization, the HR managers had aopted a reactive strategies to people’s problems. The need of the hour is proactive approach, a strategy which helps HR managers foresee events and take appropriate actions before the events occur.

The major challenges are:

Globalisation

Globalisation is increasingly viewed as a growth strategy by several companies. Growing internalisation of business has its impact on HRM functions. The HR department is required to cope with the problems of unfamiliar laws, languages, practices, competitions, attitudes, management styles, work ethics and more. HR managers are required to know that international operations have:

·        More functions, such as taxation and co-ordination of departments.

·        More heterogenous functions, such as co-ordination of multiple salary currencies

·        More involvement in the employee’s personal life, such as housing, health, education and recreation.

·        HR functions such as planning, staffing, remuneration and the like, therefore, will be affected by globalisation.

Corporate Reorganisations

The past three to four years brought us news about corporate mergers, takeovers and massive reorganizations to fend off hostile take-over bids. It is difficult to imagine circumstances that pose a greater challenge for HRM than reorganization resulting from acquisition, merger, divestiture or a take-over threat.

The reorganization will have impact on organizational levels and employees. The employees of both the ‘taking over’ as well as the ‘taken over’ companies will have anxious moments because of:

·        Fear of loss of jobs

·        Job changes, including new roles and assignments

·        Transfers to new geographic location

·        Changes in remuneration

·        Changes in career possibilities

·        Changes in organisational power, status, an prestige,

·        Staff changes, including new peers, supervisors, and subordinates, and

·        Changes in corporate culture and loss of identity in the company.

There is little indication that the pace of mergers and acquisitions will slacken in the future. But an important key to the success of almost any merger or acquisition is the management of HR.

New organizatioanl forms

The practice of HRM is shaped by the organisational forms in which people are employed. But the employment potential of these giant corporations is declining. Large production units have become increasingly a thing of the past, and large companies now tend to consist of business units managed relatively independently.

The consequence has been a higher profile of medium size and small sized firms as employers. A majority of the population are employed in units with fewer than 200 employees.

This trend affects HRM in various ways:

·        Smaller firms and establishments means a more personalised style- not necessarily more progressive, but more fsce-to –face.

·        Smaller units may require less complex and sophisticated systems of personnel management, but may also be less able to sustain them in areas like management development.

·        Smaller unit are less able to sustain a specialist personnel management function.

On the other hand, the business and human challenges of operating in this kind of environment are becoming greater. The contribution of HRM will then be in facilitating the processes, which support the development of the enterprise, rather than, as traditional personnel management has one, in administering systems for controlling people.

The basic challenge to HRM an enterprise management comes from the changing character of competition.Competition in many sectors is no longer between individual firms, large or small, but between constellation of firms.

Changing demographics of workforce

The major challenge that has resulted from changing workforce demographics concerns dual career couples, couples where both partners are actively pursuing professional careers. Organizations have been accustomed to using job moves and physical relocation as an important means of developing talent. The increasing number of dual career professionals limits individual flexibility in accepting such assignments.

Another change in the workforce demographics relates to the growing number of employees who are young. Dormitories, gymnasium, breakfast, these are the kind of facilities that need to be provided to the workforce which has more of young employees.

Changed employee expectations

With changes in work-force demographics, employee expectations and attitudes also have shifted. Traditional allurements such as job security, attractive remuneration,housing and the like do not attract and motivate today’s workforce. Employees demand empowerment and expect quality with the management. Previous notions about managerial authority are giving way to employee influence and involvement along with mechanisms for upward communication and due process.

Another expectation by the employee is that the electronic and telecommunication revolution will improve the quality of work life. Innovations in communication and computer technology will accelerate the pace of change, and as a result, lead to many innovations in HRM. Also, today’s average worker demands better treatment, challenging jobs and career advancement.

The HR manager must, therefore, redraw the profile of the worker and discover new methods of hiring, training, remunerating and motivating employees.

Proactive industrial relations strategy

There is almost a metamorphosis at the industrial relations front. Strikes, lockouts and loss of mandays are declining considerably. This transformation is the result of socio-economic and political reasons.

The challenge to the labour movement comes not so much from any destructive potential intrinsic in HRM but from its capacity to co-opt and integrate workers into the enterprise by building a relationship with them.

Not having to compete with the management for worker’s loyalty, trade unions behave towards their members exactly as any monopolistic organisation would. HRM comes as a threat to this cosy arrangement, for management is not only seeking to get back to the neglected employee, but doing so in an environment where there own unions had taken them for granted.

The need now is to adopt a proactive strategy towards industrial relations, an approach which should enable HR specialists to look into the challenges unfolding in the future and to be prepared to convert them into opportunities.

Contribution to the success of the Organization

The biggest challenge to an HR manager is to make all employees contribute to the success of the organization in an ethical and socially responsible way. The society’s well being, to a large extent depends on its organisations, particularly business organisations.

It must be the endeavour of everybody to ensure success and stability of organizations. Responsibility is more on the HR manager as it is he who co-ordinates people’s activities and it is the people who make or mar organizations.

Need for attitudinal change in PSUs

While success of organizations in general is vital for society’s well being, public sector undertakings tell a different story. It may be asserted that although most PSUs are strong in manpower, R&D, systems, manuals, principles, and procedures, they fail to use it and incur losses.

Behind this phenomenon is the role of the personnel. Employees of loss making units have wrong attitudes towards their work and their organizations. Consequences are low productivity, absenteeism, militancy and other similar evils.

These issues must be addressed by the HR manager.

Renewed focus on people

The good news for HR managers is that there is renewed focus on people in organizations. For too long, managers believed in structures, strategies and systems. But over the last decade, technological, competitive and market changes have eroded its effectiveness.

The top management must therefore nurture the ideas of the frontline engineers and sales representatives, encourage interpersonal relationship and self monitoring and develop personal communications with key people.

The role of HR manager in the unfolding scenario is clear. He or she must make the focus on people justifiable and sustainable.

Managing the mangers

Managing the managers is another challenge before the HR manager. Mangers believe they are a class apart and expect remuneration which may be unreasonable and highly expensive.

Managers instead of managing their allotted functions, assume the role of the employer and fire those whom they feel are too smart.

Yet, managers are the individuals who run the show and an organisation cannot do without them.

Protect the interests of weaker sections

Another important challenge for HRM is to protect the interest of weaker sections of the society. The dramatic increase of women, minorities and other backward communities in the workforce has resulted in the need for organisations to re-examine their policies, practices and values.