The Importance Of Hrm

Published Date: 02 Nov 2017

STUDENT NAME: SATHIANARAYANAN MUTHALIAR

STUDENT ID: 121322

LECTURER: HELEN EVANS

Introduction

The first part of the assessment would define Human Resource Management uses the current models and theories. It would then discuss on the implication of globalization for Human Resource Management.

Human Resource Management is known as a strategic approach to employment, development and well- being of people working in an organization. According to Beer (1984) Human resources management involves all management decisions and actions that affect the nature of the relationship between the organization and its employees –its human resources (Beer et al, 1984, p1). Human resource management has become more strategic and more global it is becoming more important and critical to the organization world-wide. Globalization is a process that is merging people together from all nations of the world into a single community linked by the vast network of communication technologies which is "the ability of individuals and firms, to transact business across national boundaries" (World Bank, 1999, p 52). This impact of globalization has also affected the HRM in the business world of today. Globalization has transform HRM to International Human Resources Management (IHRM). Globalization refers to the shift to a more integrated and interdependent world economy (Hill, 2009). This factor focuses on the maximization of profit and, as an economic driver that has an effect on the way in which human resource is managed. Hill (2009) states that globalization has eliminate the barriers to cross-border trade and investment; material culture is starting to look similar the world over and national economies are merging into an interdependent, integrated global economic system (Hill, 2009). HR managers today do not need to rely in a small limited market to find the right employees needed to meet the global challenge. But today they are able to recruit employees from around the world. Besides that, the effective data based which is being used globally today also has made HRM simple but effective task. Human resources managers of today must ensure that the appropriate mix of employees in terms of knowledge, skills and culture. Global HRM refers to Human Resource Management practices that deal with managing a diversity of workforce from all around the world.

Now this essay will examine the implications of globalization how does this factor affect Human Resource Management. The first implication that the essay would discuss will be Technology.

Technology has developed along with globalization, by associating with advances in communication and information technology. The way people throughout the world communicate, exchange information and learn about their world has changed with the level of computer usage has become more prevalent in most part of the globe; it is further enhanced by the increasing number of information technology literate individuals (Burton et al., 2003). The influence of information technology is clearly seen in HRM when the transformation of traditional Human resource management to IT based Human resource management and it is known as e-HRM which is the result of developing technology. E-HRM is known as the web-based technology that provides HRM application in an organization, as an example it would be E-learning, E-training and E-recruitment. According to Bondarouk et. al,(2009) he believes that e-HRM can reduce the cost of traditional methods of processing and administration of paperwork, as well as speeding up transaction processing , reducing information errors and improving the tracking and control of human resources actions. By implementing e-HRM it has made many MNC to expand their business throughout the world and also to employ people globally. Based on a research done by Aakash Gopalia (2012) it has been investigated that internet recruitment and selection are effective in terms of saving recruitment cost, reducing time to hire and helping companies in developing competitive edge, market image and attracting right skilled candidates. As an example, recruitment companies based in another geographical area could perform their recruitment and selection process to choose the best candidates with the advancement of technology. Besides that, e-HRM has made communication more efficient as most of the MNC’s deals in trading their goods or services globally which has helped organizations to save their cost and time. As an example, a few years ago MNC’s would send a marketing representative for marketing their product or services in the trading country, whereas now most of the MNC’s uses technology to trade. According to Bondarouk and Ruel (2009), e-HRM eliminates the ‘human resource middle man’ who is initially responsible with human resource matters. This has ensured that employees are able to work independently and with supervision, at least while the HR manager’s role is reduced as they need not to provide a direct observation. Moreover, IT has enable organization to learn and help the employees in improving their knowledge and understanding where learning has been transferred from individual to organization as a result it would enhance the growth of the organization. Othman and Teh states that, with the increasing usage of IT, people are expected to think critically, be able to solve problem, communicate and work in teams, creativity and proactive, as well as bringing a new perspective to their job. To make this more effective organizational structure and processes change is required, as an example training, selection, performance, appraisals and rewards.

Now this essay would discuss on corporate social responsibility.

Corporate social responsibility (CSR) is known as a business initiative to evaluate and take accountability on the organizational effects on the environment and impact on the community which is meant that it benefits the organization as well as the community. Rionda claims that CSR is alternatively referred to as ‘corporate citizenship’, which essentially means that a company should be a good neighbor ‘within its host family (Rionda.Z, 2002). Most of the companies nowadays have decided to get involved in CSR because they realize that in order to stay productive, competitive and relevant in a rapidly changing world, they have to become socially responsible. According to Greening & Turban (2000) found that the job applicant and employee perceptions of a firm’s CSR determine their attractiveness towards the organizations. The most important factor that is affecting the way organizations treats their employees and the quality of their good and services. Besides that, employee’s satisfaction is also being achieved through implementing CSR. As an example if the employee has a positive attitude towards the current job environment, there is less likely for them to look for a new job which will also encourage new applicants to the organization. With a better choice of workforce the CSR could achieve high positive results on employee motivation and well-being. According to Mahindra & Mahindra Ltd it believes that employee participation in CSR activities not only helps to create the Mahindra culture but also creates better leaders (Lockwood, 2008). Based on the survey by Murray (2008) he stated that more than one-third of respondents mentioned that working for a caring and responsible employer was more important than the salary they earned and nearly half would turn away from an employer that lacked good corporate social responsibility policies. Furthermore, CSR has helped in recognizing the employee’s efforts and rewarding them for the contribution to the organization. As an example, employees in an organization are provided with certain benefits like medical insurance, sick pay, annual leave and many more. These benefits given by the companies would make the company to sustain in CSR.

Now this essay would move on to discuss about managing knowledge across geographical and cultural distances.

Culture is defined as the beliefs and norms of a particular group of people in a society. According to Kluckhohn (1951) he states that Culture consists in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols, constituting the distinctive achievements of human groups, including their embodiments in artifacts; the essential core of culture consists of traditional ideas and especially their attached values. Due to the development of global world most of the companies are establishing their business in many countries. In the context of HR policies it differs from one country to another, depending on the law and the legislation in that particular country. In order to establish a company in different geographical area and culture, HR managers would send their officers to the particular country to research about the culture and the HR policies which is needed to be implemented. Besides that, the HR officers would be able to know what motivates the employees from different cultures as they could implement it to achieve the organization's goals. As an example, based on a survey by Mikael Ahlfors, employees in India were unhappy with monetary compensation, because it creates a temporary commitment to the job. While they believe that non- monetary factor has given a career development and personal opportunity in achieving their goals (Mikael Ahlfors, 2011). This would create a diverse workplace environment in an organization with different culture and ethnic people, which will be an opportunity for the employees to share their knowledge, skills and abilities to work as a team in achieving the companies’ goals. Jackson and Schuler (1995) states that skills, experience and knowledge are significant value for the economy, and enhancing this would make an individual to be more productive and adaptable to the current economy. With this internalization of HR officers moving a place from another to acquire knowledge would make HR commitment higher and tougher. This will certainly increase the acceptability of HRM globally.

The second part of the assessment will analyze the future challenges for people within an organization today. This essay would now examine on the challenges faced by HRM due to technology.

Technology is the practical application of science to commerce or industry; "the study of or a collection of techniques; a particular technological concept; the body of tools and other implements produced by a given society" (Luck, 2010) Technology has changed the business world today. Most of the organization today can't operate without technology. Technology has its advantage and disadvantages. The impact of technology is seen in all area of business, it is more significant in HR practices. The first impact on HR practices would be recruitment and selection, it is a process concerned with identifying, attracting and choosing suitable people to meet an organization’s human resource requirements. Armstrong (2009) he states recruitment is the process of finding and engaging the people the organization needs. Selection is the part of the recruitment process concerned with deciding which applicant or candidates should be appointed to the job. While globalization, has given some changes to recruitment and selection. This new environment has challenges the traditional approach to recruitment and selection, where international companies can advertise through internet and recruit by internet itself. Most of the companies nowadays recruit their employees from different countries through Skype technology. According to a market research firm, the Aberdeen Group, found that 42 percent of companies used video interviews to recruit last year, compared to 10 percent of companies in 2010 ( Chen,2012). This would be a disadvantage to the organization as they do not know whether the candidate has the ability to perform well in the particular position offered. Besides that, technical difficulties would be also one of the major disadvantages, at times the internet coverage might be bad and it could disrupt the interview session. It could be a possible disadvantage to the organization as they might lose potential candidates. Furthermore, certain countries like United Arab Emirates (UAE) may block the services of Skype technology. According to Mohammed Jamjoom, CNN news (2013) its states that Saudi Arabia may block access to popular Internet messaging applications like Skype because most of the people in the country will not use the local network and it will be a big impact to telecommunication market in UAE. This will be an effect the potential and talented candidates who wish to apply for a job overseas as firms nowadays prefers to conduct Skype interviews. To overcome this situation HRM should come up with other solution.

Now this essay will further discuss on the work life balance challenges that affects HRM due to globalization.

Work life balance is a way that influences the efforts of employees to split their daily routine into working life and personal life. It is generally agreed that work-life balance is important for an individual’s psychological well-being, and that high self-esteem, satisfaction, and overall sense of harmony in life can be regarded as indicators of a successful balance between work and family roles (Clark, 2000; Clarke et al., 2004; Marks and MacDermid, 1996). The introduction of work life balance would reduce the employees stress level. As an example, if the employee spends most of the time in work related task, at a point of time they would feel they have been neglecting other important things in their lives and this would result as unhappiness and stress. With a high stress level and unhappiness, employees will not feel satisfied in performing the task and this would be a barrier for the organisation. To overcome this situation the organization have come up with new strategies like remote and flexible working which will help the employees to have a work life balance. Today with increasing advancement of technology, people are no longer needed to stay in a specific place to complete the task, they could work anywhere in the globe with the access to Internet. Remote working is a process that enables individuals to work from home or any place. Due to advancement of technology it has enable many organizations to introduce such policies to their employees. With remote working it has help the employees to work at a flexible time. For instance, Google's one of the most leading and profitable company in the globe, it has provided a flexible work schedule policy, which freely permits employees to work off-site and encourages them to use one day a week to explore any kind of "what-if" project that interests them, is fine and probably harmless (Jack and Welch, 2008).With implementing remote working it gives a lots of benefits to the organization. The first benefit would be cost saving for the organization as they don’t need a premise to run their business operations. Furthermore, it has increase the productivity level of an organization, the main reason behind it will be fewer distractions. As an example, if an employee works from an office the distraction level is high as the pier and other addition task would lead them to be lack of concentration and commitment to complete the job. The organisation which implements this method would be able to meet their goals and target even faster if the task has been finished earlier by their employees. As instance, if it is a sales company, and it has required the employee to make 20 sales per month and fortunately the employee has made it between 2 weeks, a flexible working hour would permit the employee to have another balance 2 weeks with paid leave. Remote working has a lots benefits but it also gives many challenges. There are certain challenges that organisation faces due to flexible and remote working. The first effect that the employees encounter will be technical support and no supervision when they have a problem. As an example, if an employee couldn’t complete a task due to lack of understanding and information, this will be a barrier to them as they can’t have a face to face interaction from their HR managers. To overcome this circumstances HR managers should take initiative to come up with new ideas in sustaining a work life balance.

Conclusion

Based on the finding for this essay, it is vital for human resource managers to consider the changing approach for employees as organizations are confronting globalization. The growth of HRM would actually improve the standard of the business globally and emphasising the importance of HRM nowadays. As it gives an impression to all employees they are being treated as an individual and that will motivate them to work harder to achieve the goals of the organizations. Human resources managers play a very important role as well their one the most important aspect in developing and sustaining organizations. HRM plays a very vital role in bring the best out the employees in order to increase the productivity of the organisation, therefore based on the research done, every organization should give more preferences to the growth of HRM in organizations as it bring the business to develop global and successfully.

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