Contemporary issues in HRM

CHAPTER 1

INTRODUCTION
Human Resource refer to the individuals or personnel or workforce within an organisation
responsible for performing the tasks given to them for the purpose of achievement of goals
and objectives of the organisation which is possible only through proper recruitment and
selection, providing proper orientation an induction, training, skill developments, proper
assessment of employees (performance appraisal), providing appropriate compensation and
benefits, maintaining proper labour relations and ultimately maintaining safety, welfare and
health concern of employees, which is process of the human resource management.

The success of any organisation depends on the quality of its human resources. Human
resources are the most important and valuable assets, every organisation has in the form of its
employees. Dynamic, competent and motivated human resources build dynamic organisation
and enable organisation to achieve its goals. An organisations performance and resulting
productivity are directly proportional to quantity and quality of its human resources. In the
management of four M s-men, machines, materials and money, the most important is M
for management of men or human resources. therefore an organisation should continuously
ensure that the dynamism, competency, motivation and effectiveness of its human resources
remain at high level, which requires sound human resources management. In fact one of the
fundamental activity areas of management is the management of human resources.

The concept of HRM emerged in the mid-1980s against the background of the works of
famous writers on management, like Pascale and Athos (1981) and Peters and Waterman
(1982), who produced lists of the attributes that they claimed characterized successful
companies.

The American Society for Training & development (ASTD) has developed a Human
Resources Wheel in 1982 highlighting different functions of HRM leading to quality of work
life, productivity and readiness for change.
 Human Resource Wheels, Source: ASTD, 1983

Training & Development Focus: Identifying, assessing and through planned learning-
helping develop the key competencies which enable individuals to perform current or future
jobs.

Organization/ Job Design focus: Assuring healthy inter and intra-personal relationships and
helping group initiate and manage change.

Human Resource Planning focus: Determining the organizations major HR needs,

strategies and philosophies.

Selection and Staffing: Matching people and their career needs and capabilities with job and
career paths.

Personnel research and information systems: Assuring a personnel information base.

Compensation /benefits focus: Assuring compensation and benefits fairness and

consistency.

Employee assistance focus: Providing counselling to individual employees, for personal

problem-solving.

Union /Labour relations focus: Assuring healthy union/organization relationships.

Human Resource Management is the process of recruitment and selection of employee,

providing proper orientation and induction, proper training and the developing skills,
assessment of employees performance, providing proper compensation and benefits,
motivating, maintaining proper relations with employees and with trade unions, maintaining
employee safety, welfare and health by complying with labour laws of concern state or
country.
Altogether, human resource management is the process of proper and maximise utilisation of
available limited skilled workforce. The main purpose of the human resource management is
to make best efficient use of existing human resource in the organisation.
Every organisation desires to have skilled and competent people to make their organisation
more effective than their competitors. Humans are the most important assets for the
organisation even over land and buildings, as without employees no activity in the
organisation can be done. Machines are meant to produce goods with good quality but they
will get operated by the human force only.

HRM refers to the application of management principles to management of people in an

organization. HRM comprises the following:

HRM consists of people related functions as hiring, training and development,

performance evaluation, compensation, safety and health, etc. More important
functions of HRM are the building of human capital. Human capital refers to the stock
of employee skills, knowledge and capabilities that may not show in a balance sheet
but have a major impact on a firms performance.
HRM aligns HR policies and practices with the organizations strategies. By matching
HR practices and policies with strategies, the HR executive helps formulate and
implement business strategies.
HRM assumes that it is the people of the organization that are capable of generating
value and making addition to the competitive advantage to the organization.
HR functions are applicable not only to business organizations but also extended to
non-business organization too. Eg: health, education, etc.

Human resources managers face a myriad challenges with todays workforce. There
are issues concerning the diverse workforce, legislation affecting the workplace and
technology matters that rise to the top of the list of challenges. Human resources
managers who encounter these challenges use their leadership skills and expertise to
avert issues that might arise from these challenges.

Issues in Human Resource Management:

Outsourcing HR activities

BPO and call centres

Changing workforce demographics

New organizational forms

Managing diversity

Economic busts and HR

HR professional as change agent

Make HR activities ethical

Globalization

HRM in high performance organizations

HR manager as strategist

Feminising workforce

HRM in M&As

Attitude towards unions

Knowledge management

CHAPTER 2
 REVIEW OF LITERATURE
1. Singh Balwinder. Dhawan Seema(2013): They discussed about the various challenges
faced by HR Managers in Contemporary Business Environment in their paper. They also
wrote about various tasks and function of HR managers. They concluded in their study that
the challenge does not stop with recruiting the right person but with how the HR
professionals are going to manage the performance of the employees. The real challenge
would be to create a performance culture where in opportunities are provided for enhanced
performance and where giving out optimum performance becomes a way of life. The future
role of HR professional will change from a less administrative role to more of a strategic role.
HR managers will continually be examined and required to prove their effectiveness and their
existence in the organization.

2. Ansari Zaid Ahmed, Sajjad Syed Rumaiya, Qureshi Mohammed Owais(2013): They
conducted the research to find out the contemporary issues of Human Resource Management
in the retail sector of Saudi Arabia. In their study, contemporary issues of human resource
management in the retail sector of Saudi Arabia, the researchers critically examined
contemporary developments in human resource, like new challenges in the recruitment and
selection of human resource, developing human resource skills and capabilities in the retail
sector. They confidently concluded that the human resource management activities had
significantly evolved in this new age of intense global competition. The study also concluded
that because of the growth of retail sector, human resource management has also become
more eminent in relation to other managerial initiatives.

3. Muiswinke W.J Van(2012): This paper talked about the Workshop on Human Resources
Management and Training that was held in Budapest, Hungary in September 2012. The paper
studied Strategic personnel planning, Knowledge management, Training programme, E-
learning, Management development, Human resource management which were discussed in
the above mentioned workshop.

4. Budhwar & Mellahi, (2006): They discussed the various human resource operations and
concluded that planning is a vital aspect in the human resource operations. Human resource
management uses planning to scrutinize the present as it focuses on the future.

5. Sharma(2009): His study concluded that retail human resource managers have to consider
the current and future concerns of the human resource to avoid assumptions and mismatch of
interests.

CHAPTER 3
 RESEARCH METHODOLOGY
NEED AND SIGNIFICANCE

Humans are the most important assets for the organisation as without employees no activity
in the organisation can be done. Also humans are the most complicated and diverse resource
of the organization. Hence to obtain proper results, the human resource must be managed
effectively. Therefore human resource management plays an important role in the success of
the organization. With time the political, social and technological environment have changed
tremendously. This gave rise to various issues in Human resource management. Hence, this
study aims at defining and studying various contemporary issues in Human Resource
Management and also how these issues can be solved.

OBJECTIVE:

1. To define various contemporary issues in HRM.

2. To study the various contemporary issues in HRM.

CHAPTER 4
 DATA ANALYSIS
Challenges faced by HR Managers Because of continuous changing socio-economic,
technological and political conditions, the human resource managers of the future shall have
to face more problems in the management of labor. The human resource managers of today
may find themselves obsolete in the future due to changes in environment if they do not
update themselves some of the important challenges which might be faced by the managers in
the management of people in business and industry [5, 10]. Some of the challenges are as
follows:

1.HR Collaboration with Line Managers: HRM function is a joint responsibility for all
managers within the enterprise i.e. both HR or staff and line managers must be involved. HR
professionals should become a partner with senior and line managers in strategy execution,
helping to move planning from the conference room to the market place (Ulrich, 1998).

2. HR Exhibition of Expertise in the Organization of Work: As trained administrators, the HR

professionals will have to explore and design means of carrying out HR functions in a better,
faster and cheaper ways to reduce costs. Beside cost reduction, efficiency and quality have to
be maintained in service delivery.

3. HR as vanguard of Employees Welfare: The HR professionals will be held accountable for

ensuring that employees show commitment and add value to the business of the organization
irrespective of attending to their social needs.

4. HR as an Innovative Agent: The HR professionals must work towards initiating change

that are focussed on creating high performing teams, reduce cycle time for innovation or
implementing new technology.

5. Upgrading the Skills of HR Professional: To be able to cope with the global challenges and
be relevant in the current century, the quality of HR staff need to be improved. The enterprise
need people who know the business, understand the theory and practice of HR.

6. HR Creating Value in the Organization: To meet the increased expectations of the

organisation, the HR professionals must articulate their role in terms of creating value. They
must measure their effectiveness in terms of business competitiveness and success rather than
employee comfort or satisfaction.

7. Business Challenges and Globalization: Due to globalization, enterprise now face business
challenges which require the organization to build new capabilities. This innovation has
created opportunity for the HR professionals to play leadership role in assisting the
organization to meet the competitive challenges.

8. The Effect of Information Technology in Workplaces: Information technology has made

the world smaller and faster through internet. Ideas and large amount of information now
move freely and constantly. The challenge for the HR Managers is to make good use of what
information technology offers and to make it to be a viable productive part of work setting
and tool.
9. The Challenge of Privatization and Liberalization: The privatization of government
companies involves the divestment of public holdings in these enterprises for the benefit of
single or multiple private shareholders or owners. The exercise will usher in a lot of changes
within the privatized organization and the HR professionals must brace up to the challenges
posed by the exercise as it relates to HR planning and management.

10. HR and Political Process: With the democratic changes occurring all the world over, the
populace in which the work community is inclusive must internalize democracy and
discharge their civic duties to the country.

11. Multi-Skilling Process: The pace of change in the HR environment in this era of
globalization will require the HR professionals to be multi-skilled. They must devote more
attention to core strategic issues in HR management and be facilitator or change initiators and
internal consultant to the organization.

The contemporary issues of Human Resource Management:

Outsourcing HR activities
BPO and call centres
Changing workforce demographics
New organizational forms
Managing diversity
Economic busts and HR
HR professional as change agent
Make HR activities ethical
Globalization
HRM in high performance organizations
HR manager as strategist
Feminising workforce
HRM in M&As
Attitude towards unions
Knowledge Management

OUTSOURCING HR ACTIVITIES

Many large firms are getting their HR activities done by outside suppliers and contractors.
Employee hiring, training and development and maintenance of statutory records are the
usual functions contracted out to outsiders. The trend towards outsourcing has been caused by
several strategic and operational motives. From a strategic perspective, HR departments are
divesting themselves from mundane activities to focus more on strategic role.

Outsourcing has its negative side. The relevance of HR departments is at stake. If HR

functions are outsourced then the very existence of HR departments is questioned. For this
sake firms only have skeleton HR departments. Now, HR departments are no more job givers.
It is a big challenge before the HR manager to prove that his/her department is as important
as any other function in the organization.
BPO AND CALL CENTRES

If an external company develops the software for a company, if someone else does
advertising for the companys products and if some other firm administers benefits for the
companys employees, it is BPO (business process outsourcing). Similarly, if some other
company makes calls to the companys customers or receives their calls, it is call centre
business, also called voice business- a part of BPO itself.

The challenges before the HR manager:

First, attrition rate tends to be high. Employees in call centres are known for organizational
root-lessness. A typical employee in a call centre is prepared to job-hop provided he/she is
offered a few hundreds more by a competitor. The nature of job itself permits high attrition
among these employees.

Second, Logistics becomes a problem for HR manager. Employees need to be picked up and
dropped at their respective homes. Arranging cabs is a problem. Providing safety to the boys
who are required to stand at strategic points late in the nights before they are picked up by
cabs is an additional responsibility. Girls need extra safety measures when they are working
during night shifts.

Third, and the biggest challenge before the HR manager is to answer and be accountable to
the following:

How long these and boys and girls continue to work in call-centres? Can a call
centre job be a preferred choice for an individual to pick up, join, work and retire?
How to de-stress these young men and women and prevent them from getting burnt
out by the time they reach their forties?
How to protect these youngsters from becoming drug addicts?
How to restore values in them?
How to prevent them from getting dehumanized?

MAKING HR ACTIVITIES ETHICAL

The HR managers role in building an ethical climate in the organization is significant. The
Hr manager needs to carefully screen applications for jobs, weed out those who are prone to
indulge in misdemeanours and hire those who build a value driven organization. The HR
manager needs to institute mechanisms to ensure ethical conduct of employees. Whistle
blowing, ethics hotline and ethics committee are some of the ways of ensuring ethical
conduct of employees. Having establish these, the HR manager needs to create an
environment for effective functioning of such mechanisms. The HR manager by
himself/herself should set an example for ethical behaviour.

MANAGING DIVERSITY
Increasingly, organizations find themselves having workforces that have a variety of cultures
and consist of a largely diverse population of men, women, young and old, etc.

Diversity is going to be a challenging task for HR professionals for the following reasons:

The number of young workers in the workforce is increasing.

Organizations are getting increasingly feminized.
Proportion of ethnic minorities in the total workforce is increasing.
Workforce mobility is on the rise.
International careers are becoming common.
International experience is becoming a prerequisite for career progression to many top
level managerial positions.

There are problems associated with diversity. It may cause a lack of cohesion that results
in the firms inability to take concerted action, and directionless. Decisions are delayed
and performance may suffer. When diversity is not managed effectively, consequence will
be conflicts, flight of talent and decrease morale.

FEMINISING WORKFORCE

Organizations are becoming highly feminized and it is a good sign. There are advantages of
this and problems too. There are problems associated with female presence in the workforce.
Extra facilities and benefits need to extended to women. They cannot be put to all kinds of
work. Women lack ambition. When chips are down, their choice is family not career. Their is
psychological problem too. Where women is the boss there is unwillingness to cooperate on
the part of the man and where he is the boss, there is excessive chivalry. Either way,
performance tends to suffer. The HR manager faces another problem- balancing work life.
Balancing work and life assumes relevance when both wife and husband are employed..
Travails of a working housewife are more severe than a working husband.

ATTITUDE TOWARDS UNION

General perception of managers is to avoid unionisation. Contrary to popular perception,

unionisation is beneficial to the organization. Unions provide a means for workers to express
before the management conditions prevailing in the workplace. In situations, where
management is unreceptive to the concerns of individual workers and there is no union to
provide a voice, the only alternative left to the dissatisfied employee is to go and search for
greener pastures elsewhere. Because of the voice mechanism or the instrumentality role,
unionised firms have lower turnover rate and encourage organizations to provide more
rational and professional management. Unionization can have positive impact on a firms
performance under certain labour market conditions. This can occur in situations in which the
employer has monopoly in the labour market. When unions negotiate higher wages under
such conditions, the economically rational response of employers is to add more capital per
worker and enhance the quality of labour. This leads to high productivity. The negative
impact of unionisation is too familiar to all. Strikes, spoiled labour relations, lost production,
lost revenues are the consequences of unionisation. Fearing the dark side of unions, managers
seek to keep their plants union free. Managers need to realize that unions are inevitable part
of organizations.

GLOBALIZATION

As globalization spreads, more foreign firms are entering Indian market and the challenge
before domestic firms is going to be much more in the years to come. Many Indian firms are
compelled to think globally, something which is difficult for managers who were accustomed
to operate in vast sheltered markets with minimal or no competition either from domestic or
foreign firms. Some issues from global sectors are:

World class HR practices have found their application in Indian businesses. Hiring
practices, motivational approaches, compensation packages, training and development
methods and techniques, appraisal systems and capability development now being
practiced by HR managers included ideas and practices followed in US or Japanese
firms.
Indian firms have large number of foreign nationals working here or Indians are being
sent as expatriates to other countries to work in home countries of MNCs. Either way,
the task of HR manager becomes more challenging. Expatriates need to be attracted,
trained, compensated, promoted and motivated differently
MNCs scout around for local firms to form strategic alliances. Joint ventures benefit
MNCs no doubt, but local firms also stand to gain in terms of increased sales,
expanded markets, sharing of technology and professionalization of management. No
MNC ventures to have a partnership agreement with a local firm which is not known
for competence. It is the task of every manger, more so of HR manager to make the
company competent so that it gains attraction of MNCs which are searching for
prospective alliance partners.

HRM IN MERGERS AND ACQUISITIONS

Firms seek growth through any or both of two routes: 1.mergers and 2. acquisitions. Mergers
or acquisition route involves combining with or taking over an existing business. Although
mergers and acquisitions are easy routes for business growth, certain problems associated
with them need to be taken note of. Mergers and acquisition will lessen competition and
consequently oligopoly markets come into being.

Following are the typical tasks of the HR professional:

Composition of new board

Deciding who will occupy which job
Assessing culture
Undertaking human capital audit
Effective communication
Retaining talent
 Aligning performance
Evaluation and reward systems
Managing the tradition

HRM IN HIGH PERFORMING ORGANIZATION

Organizations are getting highly charged nowadays. Globalization and consequent

competition are the compelling reasons why firms are performing better and better. A high
performance organization is the one which has judicious mix of people, structure and
technology to make use of resources and opportunities to reach its goals. The outcome of
high performance are customer delight and employee satisfaction.

Following are the contributions of HRM in high performance organization:

Individual are group share knowledge

Work is performed by teams
Selection system is job related and legal
Organizations encourage continuous learning
Technology reduces time and costs of tasks while preserving quality
Discipline system is progressive

NEW ORGANIZATIONAL FORMS

The practice of HRM is shaped by the organizational forms in which people are employed.
Elsewhere, economies have been going undergoing fundamental changes and the structures
or organizations and the relationships between them have been transformed. Big
organizations have grown bigger in the sense that the world economy is dominated by
transnational organizations. Large production units have become increasingly a thing of the
past, and large companies now tend to consist of business units managed relatively
independently. This trend affects HRM in various ways:

Smaller firms and establishments mean a more personalized style- not necessarily
more progressive, but more face to face.
Smaller units may require less complex and sophisticated systems or HR
management, but may also be less able to sustain them in areas like management
development.
Smaller units are less able to sustain a specialist HR management function.
On the other hand, the business in 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 done, in administering systems for
controlling people.
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. Men or women moving through organizational ranks
to upper level positions need experience in a variety of roles in different organizational units.
Frequently, physical relocation is required. The increase in number of dual career
professionals limits individual flexibility in accepting such assignments and may hinder
organizational flexibility in acquiring and developing talent.

Another change in the workforce demographics relates to the growing number of employees
who are young. Companies which were set up in 1940s and 1950s have employees who are
now superannuating. People who joined to fill up the vacancies are obviously fresh college
graduates or diploma holders. Enterprises which are newly established obviously prefer
young men and women.

CHANGED EMPLOYEE EXPECTATIONS

With changes in workforce demographics, employee expectations and attitudes have also
shifted. Traditional allurements such as job security, attractive remuneration, housing and the
like do not attract and motivate todays workforce. Employees demand empowerment and
expect equality 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 of 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 result
lead to many innovations in HRM. Also, todays average worker demand better treatment,
challenging jobs and career advancement. The HR manager must, therefore, re-draw the
profile of the worker and discover new methods of hiring, training, remunerating and
motivating employees.

HR MANAGER AS STRATEGIST

HR manager is expected to act as a strategist. Business objectives may be stated in severel

ways- as financial targets, balanced score cards, visions, intents, missions, aspirations, or
goals. Regardless of the objectives form or content, an organization must be created to make
it happen. When HR manager acts as a strategic partner, he/she works with line managers to
institute and manage a process that creates an organization to meet business requirement.

CONCLUSION
 The role of HR professional has changed from a less administrative role to more of a
strategic role.

The challenge faced by the HR manager does not stop with recruiting the right person
but with how the performance of our employees is going to be managed.

The basic challenge is to create an atmosphere where in opportunities are provided for
enhanced performance and where giving out optimum performance becomes a way of
life for the employees.