Hypercompetitive Business Conditions In Hrm Outsourcing

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02 Nov 2017

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Several factors -- internal and external -- affect the organisation and its expected growth. Human resource management is considered as strategic and coherent approach in managing the organisations’ most valued asset which is the people. Arguably, the management of people, who come from various backgrounds and with different intents, is not without difficulties and human resource management can only relate to how these people perceive the things around them, how they can be motivated to work harder and what behaviours can be modified while in the workplace. However, there are organisations which prefer to outsource specific or all HRM functions to third party providers. We shall see in the progress of this report the nature and dynamics of people management, HRM outsourcing and in-house HRM. Whether the writer agrees on whether there is a need for an HRM department or not will be decided in the end.

This report will discuss the criticality of good people management within organizations, the advantages and disadvantages of HRM outsourcing, the advantages and disadvantages of in-house HRM, utilizing real companies in the discussion. A portion of the discussion will be devoted on how HRM can actually make the business worst.

Good people management

Pros and cons of HRM outsourcing

AmericanAirlines (AA) is the world’s largest commercial passenger airline that provides scheduled jet service to destinations throughout North America, the Caribbean, Latin America, Europe, Pacific and Asia. In spring 1996, the business opened the Dublin European Reservations Office. The office deals with all aspects of customer service and reservation sales from several European countries.

Careers and hiring requirements within the airline passed through networking wherein the company had outsourced their key HR functions to IBM. In March 2007, the company had turned-over most of its HRM operation in IBM under an outsourcing agreement (McDougall, 2007). IBM has now the power to hire and employ recruitment strategies and selection systems. They are also responsible for applicant short-listing and for the final stages of the selection process such as drug screening and reference checks as well as testing and assessment (Rioux and Bernthal, no date, p. 2).

Job requirements are now being posted on employment portals and kiosks through IBM monitoring which includes basic qualifications; educational, language and training requirements; nature of the work, job description, duties and responsibilities; remuneration and other benefits as well as other qualifications which include communication and typing/keyboarding skills and abilities to work in a team and to work efficiently under time constraints. It was then followed by curriculum vitae (CV) submission. And aside from medical (urine for drug, blood, etc.) examinations, the company also employs personality, integrity and ability and aptitude tests of general knowledge as a measure of intellectual development (Brenner, 2004, p. 77). Psychometric charts are also in used to determine the readiness of the employees with regards to terrorism attacks and other severe conditions.

Depending on the job requirement, AA had different interviewing authorities. The interview process is lengthy and must meet with a number of people. Often than not, it will be a panel interview and based on the answers of the interviewee, the process will move into the second stage. Interviews also incorporate strategic case studies. In addition, the company is also hiring through on-campus and job fair events. After the initial interview in these places, successful applicants must proceed to the headquarters.

Pros and cons of in-house HRM

HRM is a valuable element of organizational success since it aids in achieving the competitive edge in terms of quality, cost and flexibility. There is the need therefore for HRM to embrace the people whom the organization does business with. It is through this people that sustainability can be achieved whereby the values are created that direct and indirect rivals could not implement (Smale, 2008).

From a resource-based perspective, the various categories that HRM can build upon include physical, organizational, financial and technological as well as human resources. As assets, the mere existence of human within the organization is inadequate. However, the relationship among them should be controlled towards achieving long-term organizational success. Sustainable competitive advantage potential of the human resources is central to the idea that human resources are valuable, rare, inimitable and non-substitutable (Thite, 2004).

Nevertheless, such a valuable resource, human resources are heterogeneous because of the fact that organizations require different jobs that require different skills and capabilities. The value of the differences among the people could be realized on the contribution of individuals to the organization which means to provide value at diverse degrees. The rarity of high quality and ability workers is because of their skills and competency levels. Included in here is the supposedly normal distribution of skills, competencies, expertise and capabilities (Maxwell and Farquharson, 2008).

For the human asset to imitated, further, there is the need for competitors to identify the exact source of such and duplicate exactly the elements of the human capital. Suffice to say, this is a difficult endeavour since the dynamics of human capital is also considered as organizational intelligences. On the other hand, human resources should not be imperfectly mobile so that they cannot be traded. Human resources should not be also substitutable (Pritchard, 2007).

Organizational success is also based on the collective practices internal to the organization but is intended for the outside environment. Some of these areas are employment security, recruitment selectivity, employee ownership, information sharing, participation and empowerment, self-managed teams, training and skills development and succession provision. There should be an emphasis on envisioning individual workers as sources of organizational success (Sims, 2002).

Organizational success could be also realized when the organization through HRM is continuously invest on its reputation or image, stressing the need for sound human resource policies and practices and aligning such with the business strategies and its external context. Cost and quality is the focus whereby there are definite processes, systems and procedures that consolidates competencies, continuous education, proficient performance at individual and departmental levels and balanced monetary and non-monetary reward systems (Morris, 2004).

Conclusion

While HRM outsourcing has advantages, this report claims that the business would be more successful with an in-house HRM since this will not jeopardize effective people management.

References



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