Group Assignment

Human Resource Management

Submitted To: Sir Hamayun Naeem

Submitted By: Shumaila Latif
Faiza Ahmed
Mohsin Nadeem
Submitted On: Nov 24, 2009
INTRODUCTION

People are the assets on which competitive advantage is built, whether in the public or
private sector, whether in the corporate world or in the world of education. In the
words of the latest theory on human resource management, people are an
“inimitable” asset. People and their skills are the one thing that competitor
organisations cannot imitate. So human resource management and the practices
associated with it have become accepted by managers in all forms of organisations as
one of the most important strategic levers to ensure continuing success. With the
increase in competition, locally or globally, organizations must become more
adaptable, resilient, agile, and customer-focused to succeed through the strategic
deployment of a highly committed and capable workforce using an array of cultural,
structural and personnel techniques.

Modern HRM

In the 1980s, the concept of human resource management began to gain ground at the
expense of personnel management (Storey, 2001). At the root of the new thinking about
the management of people in organisations was the perception of the increasing
competitiveness of the global economy (Best, 1990). The success of large Japanese
corporations in export markets for traditional western products such as cars and electronic
goods in the 1970s and 80s took many western corporations by surprise. Studies of
Japanese corporations emphasised the importance of effective people management in the
competitive strategies of these organisations (Ouchi, 1982). The studies showed that
Japanese employers performed far better than their western competitors in terms of
labour productivity and in process innovation. The key to this success lay in the human
resource management practices adopted by Japanese corporations such as Toyota and
Matsushita. These practices became evident in western countries as Japanese
corporations established manufacturing plants throughout Europe and North America.
The human resource management practices which had been so successful in Japan were
transplanted with great success to these overseas transplants (Wickens, 1987).

Traditional Vs Modern HRM

Traditional HRM

• selection and recruitment

• training and development
• pay and conditions
• industrial relations
• employee welfare
• occupational health and safety

Modern HRM

• strict and rigorous selection and recruitment .

 • high level of training, especially induction training and on the job training.
• multi skilling.
• better management-worker communications.
• encouragement of employee suggestions and innovation.
• single status symbols such as common canteens and corporate uniforms.

Challenges To Modern HRM

1. Globalisation

Nowadays firms are compelled to think globally,something which is difficult for

managers who were accustomed to operate in such markets with minimal or no
competition either from domestic or foreign firms.The firms need to adopt strategies such
as decentralized authoritative style and outsourcing to expand globally..

2. Changed Employee Expectations

Employees demand empowerment and expect equality with the management.They expect
new methods of training,hiring, remunerating and motivating employees alongwith
giving way to employee influence,involvement and upward communication.
3. Outsourcing HR Activities

The trends towards outsourcing have been caused by several strategic and operational
motives.Outsourcing has been used to help reduce bureaucracy and to encourage a more
responsive culture by introducing external market forces into the firm.

4. BPO and Call Centers

Business process outsourcing (BPO) is a broad term referring to outsourcing in all fields.
Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive
business processes to an external provider that in turn owns, administers and manages the
selected process based on defined and measurable performance criteria.

Different types of services being offered by BPO include Customer Support Services
Technical Support Services and Telemarketing Services.Call center employees should be
assigned responsibilities to work in groups, to enable them to foster individual ownership,
team work and improve overall performance. Empowering employees to approve product
or shipment returns.

5. Changing Workforce Diversity

This includes basically to decline the number of blue-collar employees who are giving
way to white collar employees and increase awareness and education among workers.

6. Balancing Worklife

A programme aiming at balancing work-life of working husband and wife is required and
is supposed to include childcare at or near the workplace,training supervisors to respond
to work and family needs of employees,flexible work scheduling,etc

7. Making HR Activities Ethical

Hiring ethical strong employees is only the beginning.The need to institute mechanisms
to ensure ethical conduct of employees is increased a lot with the passage of time.The HR
manager needs to carefully screen applications for jobs,hire those who can build a value
driven organization.

8. Organizational Restructuring

Many big companies have reduced their number of management grades,elimination of

layers and re-drawing reporting lines within their organization.This is of need to keep
people with and working effectively and efficiently.

9. Managing Diversity
Its value is becoming more important issue because of:

Increase in the number of young workers in the work-force,Increase in the number of

women joining the workforce,increase in mobility of the workforce.Organizations that
can manage diversity better,tend to be more flexible,open-minded and having less
standardized operating methods.

10. Attitude Towards Union

Unionization is very beneficial to the organization .It provides a mean for workers to
express before the management conditions prevailing in the workplace.Srings of the
union are required to be checked time to time for better performance in the firm.Unions
deal with the pay issues,promotions and other benefits of the workers.

Models Governing Shift of Management Styles

Walton (1985) who described how modern organisations were moving their management
styles from one based on control, to one based on commitment. Walton elaborated
his control to commitment model in a table that juxtaposed the two models (Figure
1).

Management practice Control Commitment

Job design Focused on the individual Focused on the team
Performance management Measured standards for Higher “stretch” objectives
minimum performance
Management structure Top down and hierarchical. Flat organisation structure.
Emphasis on management Minimum status differentials
symbols
Compensation Individual pay linked to job Pay linked to skills and
evaluation mastery
Employment Employees viewed as Assurances that participation
variable cost will not result in job losses
Employee voice Employee input allowed on Employee participation
a narrow agenda. enacted on a wide range of
issues
Labour management Adversarial labour relations Mutuality with joint
relations planning and problem
solving

Figure 1
Walton’s Control to Commitment Model
(Source: adapted from Walton (1985))

In Walton’s commitment model we can see many of the elements that have become
familiar in the modern practice of human resource management including teamworking,
flat organisation structures, pay linked to skills and employee involvement.
 David Guest, a noted British scholar in the human resource management debate, devised
his normative model of human resource management a few years after Walton’s foray
into commitment strategies. Guest (1987) defined four outcomes for human resource
management – strategic integration, commitment, flexibility and quality. In Guest’s view
these human resource management outcomes would lead to higher levels of job
performance, higher levels of innovation and change whilst lowering turnover, absence
and employee grievance rates. This veritable nirvana of human resource management has
remained one of the most influential models in discussions about human resource
management to this day (Figure 2).

Human resource Human resource Organisational outcomes

management policies management outcomes
Organisation and job design. Strategic integration High job performance
Management of change
Recruitment, selection and Commitment High problem solving,
socialization change and innovation
Appraisal, training and Flexibility/adaptability High cost-effectiveness
development
Reward systems Quality Employee satisfaction,
Communication motivation and recognition

Figure 2
Guest’s normative model of human resource management
(Source: adapted from Guest (1987))

Guest’s model of human resource management is very useful in that it defines the modern
lexicon of human resource management. Gone are the references to the functional areas
of personnel management described earlier. Human resource management clearly
encompasses these older regulatory hangovers, but goes much further in embracing the
management of change, job design, socialisation and appraisal as the key levers to
achieve organisational success. Guest’s model also sets the agenda for what human
resource management is trying to achieve – integration with the business strategy of the
organisation, employee commitment, flexibility and quality. These are still very much the
aims of human resource management. Taking commitment as a major element of human
resource management Storey (1995:5) came up with one of the best original definitions
of human resource management:

Example

Head of Wal-Mart HR Emphasizes New and Modern HR Practices

New York — A key objective for Wal-Mart in 2005 is to make the company an even
better place to work. To do this, Wal-Mart is combining its founding principles of
employee and store level empowerment with new technologies and a number of
employee development programs.

Today, all supervisors receive training on diversity issues. The retailer also conducts
women in leadership and mentoring programs to help employees further their careers. In
stores, it is increasing the frequency of employee surveys.

On the technology side, cash registers are now programmed to automatically shut down
so that an employee must take his or her break. Technology is also used to monitor
notations to timecard so that workers are paid properly for every minute they work.
Human resource services are available to field managers on a 24/7 basis. Wal-Mart
operates many 24-hour locations.

Latest Techniques In The Field of Human Resource

• Employees for Lease

For many small and medium businesses, the cost of handling administrative duties is so
overwhelming that they need to seek outside alternatives for handling such matters. One
great way to do so is to lease employees. If you are a business owner considering this
option, here are the steps you need to take to get started.

Step 1
Find a local professional employer organization (PEO) to help you. A PEO will offer
you the opportunity to lease employees to handle tasks like payroll, taxes, and
bookkeeping.
Step 2
Go online to find places to help you lease employees. There are 2 great places to help
you with this task: Staff Market and Employee Leasing. (See resources below.)
Step 3
Do your research. Employee-leasing organizations vary considerably; so you need to
make sure you find the right fit for your business.
Step 4
Ask for a quote. Explain what you need to the leasing organization and get a specific
price for their services.
Step 5
Let the leasing organization do the work for you. Free yourself from the burden of
administrative tasks. Lease employees and get rid of the hassles of employing non-
income-producing parties. This will allow you to set your sights on the business of
doing business.
• Moonlighting by Employees

A substantial number of employees do in fact work for more than one organization. In
some instances they seek outside employment to supplement their income. In others,
they’re testing the waters to go out on their own. In any case, it gives you, the
employer, a little something to think about. Your first reaction may be to ban outside
employment altogether. This is probably not the best way to deal with the situation,
however, because it can cause retention problems and lead to poor employee relations.
Instead, you might want to adopt a moonlighting policy that simply discourages outside
employment or restricts it based on business-related criteria.

• Flexi-time & Flexi-work

Flextime is a variable work schedule, in contrast to traditional work arrangements

requiring employees to work a standard 9am to 5pm day. Its invention is usually
credited to William Henning. Under flextime, there is typically a core period (of
approximately 50% of total working time/working day) of the day when employees
are expected to be at work (for example, between 11 am and 3pm), while the rest of
the working day is "flexitime", in which employees can choose when they work,
subject to achieving total daily, weekly or monthly hours in the region of what the
employer expects, and subject to the necessary work being done

• Non-smoking policy

To protect and enhance our indoor air quality and to contribute to the health and well-
being of all employees, the (Company Name) shall be entirely smoke free effective
(date). Additionally, effective (date), the use of all tobacco products, including chewing
tobacco, is banned from the (Company) workplace, except as designated in this policy.

Smoking is prohibited in all of the enclosed areas within the (Company) worksites,
without exception. This includes common work areas, the manufacturing facilities,
classrooms, conference and meeting rooms, private offices, hallways, the lunchrooms,
stairs, restrooms, employer owned or leased vehicles, and all other enclosed facilities.

The only designated smoking area in (Company) is outdoors, on the far west end of the
building, within the fenced-in area. No one may smoke along any path way or walk
way leading to or from the designated smoking area, nor may employees smoke at the
picnic tables nor outdoors in any of the grassy areas or the parking lots.

• Collective Bargaining

In organized labor, collective bargaining is the method whereby workers organize

together (usually in unions) to meet, converse, and negotiate upon the work
 conditions with their employers normally resulting in a written contract setting forth
the wages, hours, and other conditions to be observed for a stipulated period. It is the
practice in which union and company representatives meet to negotiate a new labor
contract. In various national labor and employment law contexts, the term collective
bargaining takes on a more specific legal meaning. In a broad sense, however, it is
the coming together of workers to negotiate their employment.

• Collaborative management.

The management style in which every member of the team needs to contribute
his/her perspective and expertise about ways to improve the business's quality,
output, costs, sales and customer satisfaction.

Human Resource Management Systems in Pakistan

The development of HRM systems in Pakistan is mostly attributable to multinational

companies that have contributed a lot in this field. These organizations introduced
globally tried modern concepts of HRM. Same local organizations are also following
multinational practices. Due to increasing competitiveness and greater emphasis on
profits the local organizations are under tremendous pressure to improve their
productivity managements of most major corporation recognizes that it is not physical
capital that makes the real difference; instead it is human resource that can lead to the
development of a real competitive edge. Therefore, many leading companies are
compelled to implement modern HR concepts. As a result of the introduction of their
systems, there is more trust established between employers and employees. HRM
systems are becoming more refined and concepts like Compensation management,
remuneration programs, workplace diversity, gain-sharing

Trends in Compensation Management

Traditionally, compensation has been viewed as a financial cost to the organizations.

However, progressive organizations have contrary to the traditional view, regarded
compensation is a powerful tool that can boost performance and profits. Professional HR
managers endeavor to establish a total compensation strategy within the organization’s
internal as well external environment keeping in mind factor like:
• Developing a total compensation strategy that is in line with the organization’s
goals and is consistent with the legal, regulatory, taxation and community
framework.
• Identifying potential sources and markets in which the organization competes for
qualified candidates.
• Ensure that it is consistent with the objectives of attracting, motivating and
retaining qualified people required in attaining the organizational goals.
• Monitor the competitiveness of the total compensation strategy on an ongoing
basis.
Compensation management in Pakistan has passed through several stages. Government
organizations and Private firms have been following different compensation strategies.
The Government organizations have established scales for their employees. The
employees are entitled for a level of pay and benefits depending on the scales. The
benefits include cash payment as well as other fringe benefits like subsidized housing,
medical treatment, pension gratuity, paid leave etc. The extent of benefit varies from
organization to organization

Remuneration programs
The HR managers develop and administer remuneration programs that include a mix of
elements such as base pay, variable pay, profit and gain sharing, incentive pay, stock
options etc. The programs are designed to be sufficiently competitive to attract and retain
the required quality of human resources. External and internal equity is an important
element the HR managers cannot ignore while developing the compensation and
remuneration packages.

Workplace Diversity

According to Thomas (1992), dimensions of workplace diversity include, but are not
limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual
orientation, educational background, geographic location, income, marital status, military
experience, religious beliefs, parental status, and work experience.

The Challenges of Workplace Diversity

The future success of any organizations relies on the ability to manage a diverse body of
talent that can bring innovative ideas, perspectives and views to their work. With the
mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an
organization can respond to business opportunities more rapidly and creatively,
especially in the global arena (Cox, 1993), which must be one of the important
organisational goals to be attained. More importantly, if the organizational environment
does not support diversity broadly, one risks losing talent to competitors.

The Management of Workplace Diversity

In order to effectively manage workplace diversity, Cox (1993) suggests that a HR

Manager needs to change from an ethnocentric view ("our way is the best way") to a
culturally relative perspective ("let's take the best of a variety of ways"). This shift in
philosophy has to be ingrained in the managerial framework of the HR Manager in
his/her planning, organizing, leading and controlling of organizational resources.

Gain-sharing:
Gain-sharing programs generally refer to incentive plans that involve employees in a
common effort to improve organizational performance, and are based on the concept that
the resulting incremental economic gains are shared among employees and the company.

In most cases, workers voluntarily participate in management to accept responsibility for

major reforms. This type of pay is based on factors directly under a worker’s control (i.e.,
productivity or costs). Gains are measured and distributions are made frequently through
a predetermined formula. Because this pay is only implemented when gains are achieved,
gain-sharing plans do not adversely affect company costs (Paulsen, 1991).

Future of HRM

• Retention: One survey estimated that it can cost as much as 1.5 times the
employees annual salary to recruit and train a replacement.
• Project based work: Hire people on project based work gives optimal utilization.
• Work from home: Offers employees to work within a flexible environment.

Conclusion

The role of the HR manager must parallel the needs of the changing organization.
Successful organizations are becoming more adaptable, resilient, quick to change
directions, and customer-centered. Within this environment, the HR professional must
learn how to manage effectively through planning, organizing, leading and controlling
the human resource and be knowledgeable of emerging trends in training and employee
development.