Human Resource Management Issues in Contemporary Organizations

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The business environment has become complex in the last few years, with competition for market dominance taking a global outlook. To succeed in this environment, an organization needs to have well managed resources may they be finances, human resources, technology, or even corporate governance. In addition, the organization needs to realize that, out of all the resources it has, human resources remains to be the most important and influential resource. For instance, a company may be endowed with a lot of financial capital or even state-of-the-art technology, but fail in human resources efficiency. Many organizations are facing human resources challenges. The major issues that companies are facing today revolve around recruitment/attraction of competent employees, employee retention, training and development, and performance management among others (Human Resource Leader, 2009).

Stability in the organization is very important and this can only be ensured with a strong, competent and talented work force. However as much as it is a difficult task to attract and recruit talented employees, it is equally a difficult task to retain them. Therefore, sound human resources policies and procedures should be put in place to ensure that the company becomes competitive in the labor market. According to Ciklin (2009) the human resources’ most challenging task is to preserve and nurture the employee’s talent and to develop and implement viable succession plans that incorporate training and career development to ensure employee loyalty. The role that the HR plays in retention of employees is important as it ensures continuity in the company.

The human resources policies should address the necessity to manage the diversity in an organization as well as harmonizing the various personal interests of the employees with the overall organization goals. Diversity management is very important especially for a company that has a leadership role in the market as it enhances the morale of employees who perceive that their social needs of networking are taken care of.

This paper seeks to discuss the Human resources issues faced by contemporary organizations in their operations and the necessary strategies to deal with those issues.

Company Profile – Telstra

Telstra is a communication company based in Australia that “offers mobile phones, internet and fixed line telephone services” (Telstra, 2009). The company was initially a government owned corporation but was privatized in 2006. The company has a well established network of subsidiaries in Europe, Asia and New Zealand. Being one of the largest fixed line telephone providers in Australia, the company boasts of sound financial status and a large workforce that has made the company to expand widely. The company is headed by David Thodey as the CEO. The company has been having human resource issues especially on the relationship between the management and the employees. The CEO announced the intention of the company to negotiate with the employees’ union over the matters affecting the employees in the company (HRM Guide, 2009). According to HRM Guide (2009), the previous CEO had been treating the employees aggressively and with confrontations thus creating disharmony in the company. In the recent years the company’s performance has been declining. For sometime, the employees have been in stand-off with the management due to its failure to address their concerns and high handedness. In addition, the employees refused to sign contracts they presumed to be sub-standard, a move that forced the management to employ divide and rule style of leadership.

Analysis of the company HR issues

The importance of the HR model is to enable the company to manage the human resource issues effectively in order to gain competitive advantage in the market. This advantage can only be realized where the employees are satisfied and motivated. In Telstra, HR structures are not well established. The organization and the HRM in the organization are not proactive, but rather reactive. This can be evidenced by the fact that the management only tended to react when it realized employees were threatening a boycott. According to Human Resource Leader (2009), motivation is one of the key elements of human resource that can boost employee productivity. Denying the employees their rights at the workplace kills their morale and performance. This is lacking since the organization has failed to address the key elements of an employee including career management, personal and skill development which can be effectively managed through proper compensation, diversity management and enhancing legal environment that involves trade unions and social responsibility.

One of the roles of HR is to offer performance counseling and enhance staff performance. However, at Telstra the management dictatorial to an extent of creating a divide and rule system of management. This has made it difficult for the employees to be productive. This shows that there is no leadership in the company and therefore the management has always viewed employees with low importance. According to Ciklin (2009), a company that fails in management of its human resources is bound to lose its position in the market to its competitors. However, there has been a change management witnessed recently aimed at delivering the company from declining business.

The company has been lacking a culture that is applicable to all employees thus creating a lot of division. This has necessitated the employees to seek their authority through declining to sign new contracts and engaging in a stand off with management. Diversity management is one of the key issues that lead to employee satisfaction a conducive atmosphere for HR to manage changes and foster attainment of objectives. Dividing the employees into disconnected groups has eroded teamwork in the company which in turn has affected the performance. By dividing the employees, the management had thought that the employees will stop inciting each other, but this was not to be. Indeed, trying to divide employees not only creates discomfort, but also increases the chances of revolt.

The introduction of the new CEO is one of the ingredients of the HR model that iflunces change management in order to enhance performance. This is timely at Telstra as it has happened when performance is declining. The task of the HR will be to manage talent which the previous management has failed to nurture. According to Sparrow and Cooper (2003:162), human capital theory is important as it indicates that the success of people comes from their intelligence and competence. Therefore managing these competences and intelligence is a crucial task that the management of the company has failed to master.

Implications of the issues

A company’s success in its operations is measured by its ability to gain a competitive advantage over the rival organizations in the market, ability to satisfy the needs of the various stakeholders and the ability to maintain high performance systems. This can be enhanced by having a well elaborate and clearly implemented HR model that addresses all the issues in HR.

At Telstra, the lack of employee harmony has led to poor performance in the organization. This has been caused by the dictatorial nature of management that has eroded the employee’s confidence. The implication of this failed performance will be to cost the company a competitive advantage over its rivals in the market. In order for the company to excel in global competition, the human resources policy should address all the issues touching on employees and give a fair treatment to all without discrimination in terms of position, race or gender.

The HRM has failed to maintain a proper Hr database that enhances employee development. This has led to lack of motivation in the employees causing performance decline. Poor compensation and lack of addressing issues such as diversity and legal issues may also have negative implications such as lack of meeting company’s objectives. These things may seem small, but they tend to prevent the employees exploiting their full potential, leading to the company’s failure to compete effectively with other market players. According to Bohlander and Snell (2009:490), good working conditions and fair wages among other things are very important for employee attraction and retention.

Competitive advantage will be gained when the new management change addresses the issues underlying declining performance. Telstra will gain a competitive advantage when the new CEO and the union strike a deal that will ensure fair treatment of all employees who in turn will improve their performance towards attaining the goals of the company. Bohlander and Snell (2009:491) suggest that the magnet for new and competent employees in an organization is the perception that the potential employees will get benefits from the company. If a company fails to attract talent from the outside, it has already lost the battle for competitive advantage.

Proper communication within the HR system will enhance the participation of all employees in advocating the business of the company to the existing and potential market. This will be an effective way of the company to gain a competitive advantage. According to Smith and Mazin (2004), “communication in the organization affects the employee’s morale, focus and commitment”. In addition, coordination in the system will enhance adoption of new technology and management changes thus aiding the company’s competitiveness in the market.


In order to return to its high performance, the company should bank heavily on leadership. A company without leadership is destined to fail as it always lacks direction. Without direction, the organization’s operations will be unstructured and there will be no coordination of operations. In fact leadership has been considered as the most effective function of management in attracting and retaining employees. Human resource information system may come in handy to address leadership problem by offering assistance in talent identification and nurturing. According to Storey (2007:110), leadership improves social capital efficiency by allowing people to network and commit themselves to processes.

A company wishing to compete effectively in the market must have the right and competent staff with talent. Without leadership, this talent can never be identified, leave alone nurtured. Losey, Meisinger and Ulrich (2005:135) view the success of leadership in improving company performance by indicating the need for management to embrace policy implementation and cultural diversity management.

Motivation of employees is a key factor in performance of any organization. Staff gets motivated when they feel their concerns are being addressed. There are various ways that a human resource can motivate staff some of which are; providing a conducive working environment, providing adequate compensation, and providing an opportunity for career growth and development. This can be achieved where a good information system is available which allows smooth flow of information to all employees and at the same time offering them an opportunity to participate in decision making in their areas of operation (Pynes, 2004:58). This improves morale of the employees leading to efficiency in performance. In addition, human beings are social creatures and they build confidence when they can share their concerns and ideas with other people. Thus, creating unity is paramount for a company to thrive. Human resources information system enhances the networking of employees since it eases the flow of information and interactions through such avenues like emails, intranets and conferencing.

Structures should be put in place to address the human resource issues in a diplomatic way rather than using force and intimidation. Designing a human resources management system will create harmony in the organization as it will set the structures for data and report generation on various HR issues as well as enabling the efficiency in change management. Pynes (2004:70) views that the information system improves efficiency in policy implementation as it offers all employees including the management a quicker and reliable access to the company policies and therefore enhancing information congruency and consistency in the organization. With readily available information, the management of communication systems becomes an easy task for the managers and employees.

The management should focus on improving the performance of the organization through resolving the challenges in employees’ productivity. Since the company’s performance is in declining trend, human resource information systems should be put in place to monitor performance and also to create a link between the management and other employees. A good information system should be able to accommodate all the relevant human resource and performance issues such as career tracking and development, employee incentive and compensation plans and performance tracking programs (Losey, Meisinger and Ulrich, 2005:166).

Strategic decision making should be made with rationality and efficiency. The worst scenario in an organization is when there is disharmony within the workforce and at the same time the performance on the company is declining. Storey (2007:245) is in the view that human resource information systems provide management with decision making tools which are crucial in enhancing their credibility in implementation of change management as well as resolving human resource issues that affect the performance of the organization as a whole. Moreover, change management is important especially when the performance of the company is on the downward trend. This will enhance the shifting of leaders’ way of thinking and foster to drive the company to the fulfillment of its vision and mission. Change management should be a continuous process since it gives the company a new life and tends to satisfy the expectations of the employees as they see the future of the company being bright.

Training and development is a powerful tool in ensuring the success of the company as it will help to improve the capabilities of the staff in the company. For effective performance, the employees’ career needs a continuous improvement through training and refresher courses.


Human resource management is a crucial function in the company’s management setup as it serves as the conduit through which all the resources and operations in the company are being coordinated. The impact of good human resources policies is the improved performance of the company. In contemporary organizations, the major human resource challenges experienced are attracting the best talent into the company, retaining the employees in the company and enhancing career growth and development.

Uncoordinated and dissatisfied employees can adversely affect the performance of a company especially because their morale will be low and they may not carry out their duties effectively. Where a company is having human resources challenges, the management should step in with speed to arrest the situation through addressing the issues with a mentality of win-win rather that intimidation and force. Unity in the organization is important as it ensures that all efforts are directed towards achieving the goals of the organization.

The importance of human resource information systems in the company can not be underestimated. A well designed information system can boost the performance of the company as it allows ease of collecting, analyzing and communicating all the relevant human resource information in the company.


Bohlander, George W. and Snell, Scott (2009) Managing Human Resources. Fifth Edition. Andover Cengage Learning.

Ciklin, A. (2009) HR Challenges. (Online). Web.

HRM Guide (2009) Telstra to Negotiate with Unions. (Online). Web.

Human Resources Leader (2009) HR’s Burning Issues. Human Resources Leader. (Online). Web.

Losey, Michsael R et al (2005) The future of human resource management: 64 thought leaders explore the critical HR issues of today and tomorrow. John Wiley and Sons.

Pynes, J. (2004) Human resources management for public and nonprofit organizations. John Wiley and Sons.

Smith, Shawn A. and Mazin, Rebecca A. (2004) The HR answer book: an indispensable guide for managers and human resources professionals. AMACOM Div American Mgmt Assn.

Sparrow, Paul and Cooper, Cary L. (2003) The employment relationship: key challenges for HR. Butterworth-Heinemann.

Storey, J. (2007) Human Resource Management: A Critical Text. Andover, Cengage Learning EMEA.

Telstra (2009) Telstra. (Online). Web.

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