Current Issues in Human Resource Management

Introduction

Schuler, (1984) demonstrates that every organisation is incorporating all sorts of strategies in order to have a competitive edge over their competitors and to keep up with the ever changing external environment but most fail because they fail to incorporate strategic management in the organisations most important resource and that’s the human resource.

Rubino, (1994) demonstrates that this means involving the human resource managers in the strategic planning process so they can also have in mind the organisations strategy.

Gaining a competitive advantage requires an understanding and anticipation of response barriers, intelligence systems, Pre-emption potentials, infrastructure requirements, calculated sacrifices, general management challenges. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

MacMillan, (1983) demonstrates that gaining competitive advantage through human resource means implementing strategic human resource management, which refers to doing all that results in producing the employees’ competences and behaviours that are necessary for the achievement of the company needs. This is also known as alignment.

United States office of personnel management, (1999) states that “Human resources management alignment means to integrate decisions about people with decisions about the results an organization is trying to obtain. Strategic Human Resources Management: Aligning with the Mission (Anon, 1999).

Research has shown that integrating Human resources management into the agency planning process, emphasizing Human resource activities that support mission goals and building strong Human resource / management relationships have been a major component of the alignment of human resources management with agency mission accomplishment. Strategic Human Resources Management: Aligning with the Mission (Anon, 1999).

This must be done in line with the changing external environment and in relation to human resource there are many changes;

Globalization

Randall et al., (1990) state that Globalization refers to the tendency of firms to extend their sales, ownership and manufacturing to new markets abroad, beyond their national borders. It allows firms to trade internationally. Globalization means more competition to lower costs and to make employees more productive and to do things better and less expensive.

Perry and Mesch (1997) demonstrate that firms that cannot produce quality products at economically viable costs cannot compete in the global market because there are many other firms in the global market that are competing with similar products that they have manufactured at the lowest possible costs, and are therefore able to sell at relatively lower prices. Consumers would naturally prefer the products with lower prices, meaning that the firms with high production costs would not sell in the global market. Globalisation means that the human resource can be deployed to other areas where their skills are needed. This leaves the human resource department with the duty of identifying and developing talent on a global basis. To do this the human resource department must know their employees inside out so they can identify those who can function effectively in the different areas and develop their talent.

Technological advances

Human resource faces the challenge of quickly applying technology to the task of improving its own operations and to always be ahead of others in the technological innovations. Currently, a large number of tasks which were performed manually in the past have been computerized, allowing greater efficiency at performing those tasks since speed has been greatly improved, and accuracy levels have also been raised. Firms that cannot embrace these technological innovations cannot be able to compete since they would incur higher labor costs and still produced lower quality at a relatively longer time compared to those firms that are up to date with technological advancements.

Exporting jobs

Employers often export jobs in search for cheap efficient labour. Exporting of employees to other countries gives the human resource a task of preparing the employee for the new place and the new culture. This involves training that focuses on the impact of cultural differences and their impact on business. This helps in avoiding culture shock which can really affect the business of the organisation. Training on attitudes, factual knowledge and skills building are also important before an organisation exports an employee.

The nature of work – the change in technology is changing the workforce is changing from brawns to brains hence the human resource has a hard job in recruiting and training. This means upgrading the selection criteria so as to include tests that will help identify the different skills that will comply with the changing technology.

Non-traditional workers – the workers are those with multiple skills. Having employees with multiple skills puts the human resource management at a task of reviewing their job description and developing them so that they can be able to use the different skills that they have effectively without wasting any skills.

Workforce demographics – the workforce is becoming more diverse. there are different talents with people who are motivated by different things.this calls for the human resource management having a system that allows them to be able to know each employee really well and to put in place practices that will motivate the different kinds of employees and also meet their need like the provision for a room where breast feeding mothers can be able to leave their children and then go and see them during breaks like tea break and lunch break. This helps to keep the mothers settled and hence they will work better without worrying about their children.

Planning

Perry and Mesch (1997) define planning as the process by which management determines how an organisation should move from its current manpower position to its desired position. The objectives of human resource planning involve:

• Optimum use of existing human resource
• Forecast future requirements for human resource
• Link human resource planning with organisation planning
• Assess surplus and shortage of human resource
• Anticipate the impact of technology on jobs and human resource.
• Determine levels of recruitment and training
• Estimate the cost of human resource and needs of employees
• To facilitate productivity bargaining.

1. Assessing source of human resource shortage and eradicating it.

Recent census data have revealed that the highest number of young workers in the labour force was achieved in nineteen eighty at thirty seven million. The data also indicated that this number was expected to decline to twenty four million by nineteen ninety. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

Meanwhile, each year two million three hundred thousand seventeen – year – olds are added to the ranks of the functionally illiterate. Among Hispanic seventeen – year – olds, fifty six percent are functionally illiterate while forty seven percent of the Black seventeen – year – olds are functionally illiterate.

Some organizations such as Texas Instruments ¹ and New York Telephone ² are trying to avert the foreseen shortage of young workers by getting into secondary and primary education so as to help increase the literacy rate.

2. Periodic analysis of the jobs that are offered to the employees

Peters and Waterman, (1982) demonstrate that this enables the organisation to identify the areas that need change and incorporate the change and with the change in the type of workers where most of the employees are multi-skilled this enables an organisation to be able to have fewer and more efficient workers and hence a competitive advantage. This is done by through job analysis which entails a formal and detailed study of jobs. Job analysis focuses on the task performed, tools and equipment used, working conditions and minimum qualifications needed for the job.

The aim is to determine whether all employees have the capacity to deliver on the assignments that are given to them. This is a very important practice because in some organizations employees are assigned duties that they are incapable of performing. This lead to poor performance and lack of motivation for such employees. The same employees often have areas where they can perform very well. Job analysis is aimed at identifying such employees and attempting to shift them to those areas where they can perform.

3. Forecasting the needs of the employees

This refers to finding out the needs of employees in terms what additional skills they need in order to perform their jobs better, and then finding out how to address those needs either through internal or external training. Forecasting the needs of the employees can be done by through a study of the trends in the employees profiles and be able to tell their ambitions and also developing a career path for the employees and helping them follow their plan through different kinds of training and promotions when there are opportunities.

(People aged between twenty five and fifty four) that is moving through the work force. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

Companies such as AT&T ³, Bank America Corporation ⁴, Sun Company ⁵, and Eastman Kodak Company ⁶ are trying to gain this flexibility and skill currency by offering attractive early retirement packages for carefully selected groups of employees. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

Staffing

4. Graduate recruitment

Armstrong and Baron (2002) define graduate recruitment as recruiting of fresh graduates who are top of their class. Companies which apply this method normally go for students with the best grades in the graduating class. They then employ such graduates as management trainees and even offer them opportunities to further their education while working for the company.

This is one of the practices that is done by most corporations like uni-lever ⁷.

Armstrong and Baron (2002) demonstrate that this practice enables the corporations to have the best and fresh graduates who are enthusiastic and also up to date with the changing technology and ideas in the industry.

5. Internal promotion

Powers and Vickey, (1997) define internal promotion as the process of filling vacant positions within the organization by interviewing employees who have the required skills, rather than advertising the positions to external candidates in the job market. This can also be similar with job posting. Diana (2006) defines job posting as an internal recruitment whereby available positions are offered to existing staff before exploring outside source. It includes simplified job description, citing the department, location, excemption status, salary grade and work schedule, requirements, primary duties and responsibility is posted on the organisations intranet.

Job posting has been viewed to be more cost effective since the organisation sources from within and there is also some hidden skills that are discovered in the employees. This also increases the morale of the employee making hence increase in profitability.

The Baltimore Orioles ⁸ is one company which attains differentiation through their staffing practices. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

6. Careful selection

This is done to ensure that the organization only appoints people who fit its requirements, by subjecting all applicants to an interview with every partner in the organization. Goldman Sachs ⁹ is one of the companies which apply this method. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

It is very important to take great care during the selection process so as to bring only the right people into the organization. This is done through taking the potential through different kinds of interviews and tests that test if the potential candidate has all the skills and character needed in the organisation. For example proctor and Gamble take applicants through a standardized assessment of the person’s personal background, experiences, interests and work related attitudes. This assessment is commonly referred to as a success driver’s assessment. Reasoning screening that helps to identify the candidates particular qualifications, and finally the in person assessment that helps them to identify who the candidate really is.

7. Socialization

This is a way that exposes new employees to the culture and practices of the company that they have just joined. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

Successful socialization produces highly dedicated employees whose loyalty to the company cannot be doubted. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

IBM ¹⁰, Proctor & Gamble ¹¹, and Morgan Guaranty Trust ¹² are some of the companies that have perfected the socialization process. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

Performance appraisal

Steven, (2008) defines performance appraisal as reviewing the performance of employees over a given period of time, against goals that had been agreed upon by the employee and the supervisor at the beginning of the period under review. The main purpose is to see if the employee is working towards the goals or if there are some variations, with the aim of correcting any unfavourable variations.

8. Correcting poor performance

Correcting poor performance leads to improved performance and better efficiency.

For example Emery Air Freight’s ¹³ employees on the airport loading docks were shipping small packages separately, leading to a loss of one million dollars to the company annually. If they had placed packages with the same destination in one container, those would be carried at lower rates by air carriers, saving the company that loss. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

By taking this records and correcting the poor performers, the profits of the organisation increased tremendously.

Compensation

Armstrong, (2003) states that compensation involves rewarding employees for their contribution to the organisation.

Armstrong, (2003) demonstrates that for an effective compensation system, the organisation should develop a pay system that ensures that there is fair and transparent.

9. Linking Compensation Directly to Performance

Steven, (2008) defines this as rewarding employees for good performance by defining a percentage that they would receive from the income they earn for the company. A good example is offering commissions on sales.

Plevel, (1994) demonstrates that Linking compensation to performance gives the employees the morale to work hard in and hence the organisation will have a competitive and fair way of compensation without others feeling that others are compensated for what they don t work for.

10. Non – Financial rewards

Peters and Waterman, (1982) state that non- financial rewards are ways of recognizing employees efforts by offering those rewards that cannot be quantified in monetary terms.

Peters and Waterman, (1982) also demonstrate that not all employees are motivated by money and so giving other non – financial rewards like more responsibility and power makes the employees feel motivated and this will give in to more productivity hence competitive advantage.

Training and development

11. Training of employees

Armstrong and Baron (2002) defines this as giving employees an opportunity to acquire more skills either by organizing in house training for them, or sponsoring them to go for external courses at institutions.

Skinner, (1981) demonstrates that every employee wants to feel like they are developing and not just working and therefore training employees gives an organisation a competitive advantage because the employees will be motivated and at the same time have the relevant skills since the change in technology is very dynamic.

McDonald’s ¹⁴ increases the efficiency of its franchisees and distributors by taking them through an intensive training program at Hamburger University. This gives McDonald’s competitive advantage over its competitors. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

In order for training to result in competitive advantage, the levels of efficiency achieved as a result of the training should be evident so as to justify the cost of training. Gaining Competitive Advantage through Human Resource Management Practices (Anon, n. d).

12. Coaching

According to Hellen, (2008) coaching is supporting another person to achieve their goals, with goal setting, encouragement and questions. This when done in an organisation will lead to career development for the employee and at the sametime, the employee becomes more efficient in their work. Coaching helps the employees to be focused because of the goals that they set because this keeps them on toes.

13. On the Job Training

On the job training is another form of training that can give a lot of competitive advantage to an organisation. William and kazan (2004), defined on the job training as planned instructions occurring on the job and during the week centered around the workers need to know or do to perform competitively.

This kind of training gives an organisation competitive advantage because it incurs less cost on training and the employee still does his work at the same time as he is being trained. This kind of training brings out efficient employees because they not only learn how to do the job but also learn the organisation culture making them feel part of the organisation.

14. Career management

Steven, (2008) demonstrates that career management involves planning and helping employees to develop along their career path trough training, promotion and even sponsoring them with their education.

Powers and Vickey, (1997) demonstrate that employees’ career development is important for the company because employee developing in their career means the organisation will have more competent workers and so the productivity and efficiency will be high, leading to higher income.

Employee relationship managment

15. Fostering job security

Mayer, (2008) demonstrates that every employee wants to be assured that they can wake up the next morning and they have their jobs and therefore organisations should ensure that they have clearly spelt out contracts that are adhered to and that make the employees feel secure, this way the organisation avoids high turnover that is costly and also the employee will be motivated. When employees feel that their jobs are not secure, they are not able to concentrate since all the time they would be thinking of where to get alternative employment. This would eventually affect their performance, leading to loss of income for the company.

16Co – operative labour relations

Schuler, (1984) demonstrates that fostering good relations between the employees and the management increases employee efficiency and also loyalty to the company. “Ford Motor Company ¹⁵ has engaged in a program of more worker in-involvement and more cooperative labour relations with the UAW. The results of this program are higher product quality than its competitors and a marketing campaign centred around “quality of Job 1.”

Schuler, (1984) also demonstrates that as with the two – tiered wage systems, this program of more worker involvement gains competitive advantage through cost reductions and improved efficiencies” (Schuler and Macmillan,)

17. Open communication

Randall et al., (2007) demonstrate that open communication refers to a work environment where management encourages employees to express their views freely without any fear of victimization. In organizations where open communication is practiced, employees feel free to talk to any manager about their problems and suggestions.

Randall et al., (2007) also demonstrate that open communication with the employees helps to foster openness, trust and loyalty as all the employees will feel like members of a family this give s a competitive advantage because it will eliminate fear in the employees and so there will be room for innovation. This also leads to motivation and leads to more productivity, efficiency and very low employee turn over.

18. Benefits

Benefits-benefits are the indirect financial and non-financial payment which may include:

• Pay for time not worked
• Benefits for employees whom are released through no fault of their own
• Severance pay which is given to an employee who is being terminated for public relations reasons.

Giving direct benefits to employees-according to beam and Fadden (2001) defined benefits as the employer-provided benefits for deaths, accidents, sickness retirement or unemployment. this are add on to the basic pay and they help to motivate the employee, make the employee have job security and also the employee.they also help to keep the employees and avoid employee turn over which is costly to an organisation. This is also beneficial in reducing tax liability of an organisation. According to John (2002), can also be given through add on that include paid holiday leave, employee funded superannuation, fringe benefits such as company car and even mobile phones

Conclusion

Armstrong, (2000) demonstrates that the change in the external environment of an organisation is largely dependent on the human resource of that organisation, and therefore the human resource manager must be involved in the strategic planning and implementation of the organisation’s way to competitive advantage.

Although there are many ways by which companies can gain a competitive advantage, as MacMillan (1983) has suggested, one way often overlooked is through their human resource management practices.

Schuler, (1984) demonstrates that human resource management practices enable companies to gain a competitive advantage in two major ways: One is by helping themselves and the other is by helping others. The company helps itself in that when the workforce is empowered, the quality of their work improves, and this results in increased income for the company. The company helps others because by developing the workers, they acquire new skills which they are able to use even in future. Some workers even become more competitive in the job market as a result, and are able to secure better employment.

Schuler, (1984) also demonstrates that as a result, there appears to be a significant benefit from having human resource management considerations represented in the strategy formulation stage rather than only the implementation stage.

Reference List

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