1. Explain how organisational and HR strategies and practices are shaped and developed and explain the purpose and key objectives of human resources management and the HR function within a contemporary business environment.
2. Identify the purpose and key objectives of the HR function in contemporary organisations and be able to demonstrate the process of evaluating current and future human resource needs within the business environment; both in terms of numbers of people and skills and competencies.
3. Appraise the relationship between organisational performance and effective HR management and development. Know how to identify and respond to short-term changes in the business and external contexts and provide solutions to address them.
4. Explain the significance of employment legislation to an organisation’s HR practices and evaluate how to harness effective HR practices in a global marketplace in terms of adding value and positive contribution to sustained organisation performance.
Human resource management – meaning and importance
The present day business world is complex and the competition amongst businesses has reached a global level. It has become very difficult for businesses to survive the market competition and retain their competencies on the basis of operations and resources because they can be easily replicated. In such conditions, businesses are largely relying upon their human resources to help them in achieving market competencies and their strategic goals and are investing billions of dollars for the development of their human resources.
Companies, such as Palermo Safe Storage, who talk about their human resources in their mission and vision statements but do not actually do anything for them, can also face a number of problems sooner or later because even the leaders of the organisation have no understanding about the positives of proper human resource management and providing better work conditions to the workforce.
Human resource management is an approach that aims at managing the workforce of a company and optimising the performance of the workforce by performing functions, such as performance management, career planning, training and development, compensation and benefits, etc., which help in improving the working conditions and the relations between the employees and the employer.
Human resource management has been gaining a lot of importance in the past few years because of the benefits that it can have from a business point of view. it has been rightly said that a business cannot run without the presence of human resources and business organisations have to build efficient and a proper workforce of talented people, which cannot be possible without good human resource management (Michael Armstrong, 2009).
Firstly, human resource management helps business organisations in recruiting and training their staff for the future (Torrington, et al., 2011). Businesses require workforce and the workforce can only be recruited when the human resource departments carry out recruitment and selection process based upon the workforce analysis i.e. the human resource demand and supply of an organisation. Secondly, human resource management helps in optimising the performance of the workforce by designing performance and potential appraisal programs (Heathfield, 2016). Under these programs, the management can continuously assess the performance of its employees and based upon these assessments, the management can provide rewards and benefits to those people who contribute towards the achievement of organisational goals and objectives. This can further help the management in keeping its employees motivated (Anon., 2017). Thirdly, human resource management helps in promoting a positive work place environment along with effective relations between the employees and the employer so that there are less conflicts and an increase in the overall performance of the organisation (Claydon, et al., 2012).
Human resource management is considered to be one of the most important departments because it helps businesses in achieving their organisational goals and objectives by ensuring proper management of its workforce and by designing the human resource functions in such a way that the organisational strategies are achieved.
Human resource planning is a continuous process of forecasting the future human resource demands and coming up with ways to fulfil the demand using the existing human resources or by conducting selection and recruitment processes. To some extent, the concept of human resource planning is just like the demand and supply concept of economics with a difference that it related to the human resource capacity of an organisation. (Anon., n.d.).
Human resource planning
The purpose of human resource planning is discussed below:
- To analyse the human resource demands of the organisation and to figure out ways that can help the organisation in fulfilling the demand identified
- To ensure that there is neither any surplus nor any shortage at any point of time in the organisation
- To ensure that the organisation is able to recruit and retain the human resources which it requires in terms of skills, technicalities, personality, etc.
- To continuously analyse the employee turnover rates and to undertake measures that can help in bringing down the same (Anon., 2011).
- To forecast the impact that technology can have on the working of an organisation
- To design recruitment and selection plans and to assess various methods of recruitment, such as internal recruitment and external recruitment.
- To keep a track of the cost of human resources of an organisation
One of the main objectives of human resource management is to have the right people working at the right place and at the right time so that business organisations can perform their best with their contributions. Human resource planning also aims at helping an organisation in identifying the right people for the right job by analysing the human resource demands of the organisation, skills & technicalities required in candidates, etc. and then designing the selection and recruitment criterions based on the gathered information. With workforce planning, an organisation is also able to identify whether the skills or technicalities required for a job profile can be fulfilled by recruiting someone from within the organisation by promotion, redeployment, etc. or by hiring new candidates from outside (Sullivan, 2002). Human resource planning also involved preparation of job profiles and job description of job profiles which are most likely to become vacant in the near future. Thus, when an organisation has an efficient set of job description and job specifications, its chances of recruiting the right people at the right time increase considerably.
Training and development is defined as a process where the technical skills enhancement or the overall development of an employee takes place with the help of specialised programs. A major difference between training and development is that training is job oriented and targets some specific skills whereas development relates to the overall development of a person and can target areas other than the job related skills too.
In the present day world, the business environment is constantly changing and market changes are taking place every day. With so many changes coming up, the human resources are becoming more advances and are learning new technicalities that can help them in contributing more towards the achievement of organisational goals and objectives. Thus, in order to ensure that the workforce remains competitive, business organisations have to design and implement training and development programs for them (Anon., 2012).
There are a number of ways in which training and development can contribute towards the overall success and performance of an organisation. First of all, training and development programs are designed with the primary objective of increasing the knowledge and skills of the workforce so that they can perform better because of the new things that they learn and the competencies that they gain. Secondly, it is believed that training and development can actually help in retaining employees and to keep them motivated because increasing their skills through training and development programs helps them in developing their career options in future. Thus, an organisation with motivated employees and low employee turnover rates will obviously perform well. Thirdly, to design training and development programs, human resource management has to perform a training need assessment, which helps it in identifying the skills or the competencies that the employees lack. Thus, by implementing training and development programs, the employees can learn the skills or the competencies that they lack and can perform better at the workplace (Shaw, n.d.). Lastly, a management that is concerned about the training and development needs of the employees is able to foster a positive work environment and ensure better job satisfaction and organisational commitment levels amongst the employees.
Training and development
As discussed above, the modern day business world is complex and competitive. Due to the increase complexity and competition, business organisations have become vulnerable to a number of internal and external environmental factors that can change in real time and can have a huge impact on their industries within no time. Global external environment, such as legal, political, social, technological, economic, etc. can have a huge impact on businesses that are operating on a global scale. As a result, business organisations have to continuously introduce changes so that they can cope up with the market trends and the changing environmental factors.
Introducing changes in a workplace is way difficult than it sounds. For most of the organisations, implementing a change management program in their workplaces is just like a nightmare and many organisations have failed miserably in managing change programs. If business organisations have the right zeal and intent to implement a change that can improve the performance of the organisation, they can choose from a number of change management models that can assist companies in bringing about changes and increasing the chances of success. Some of the famous change management models that are valid and effective till date are the three stage change model by Kurt Lewin and the 8 step change model by Kotter.
The simpler of the two models is the change model given by Kurt Lewin that comprises of three stages – unfreeze, change and refreeze. In the first stage or the unfreeze stage, an organisation can start with the change program by preparing the workplace for a change. In this stage, the management has to bring it into the notice of the stakeholders that there is an urgent need of a change in the organisation along with the reasons. In the second stage or the change stage, the actual changing of things takes place (Connelly, 2016). In this stage, the organisation starts to make a shift from its earlier position to a new position. In this stage, the stakeholders start accepting the change and look for new ways of doing things. In the last stage or the refreeze stage, the organisation starts to reinforce the changes that it has been able to implement so far by sharing its success and rewarding those who have accepted the change. This model suggested by Kurt Lewin has high efficiency and can also help in dealing with situations where the stakeholders start to provide resistance to the change program.
Human resource legislation is a legal binding that protects human resources from any kind of discrimination based on caste, colour, creed, sex, origin, culture, etc. and ensures equal treatment regardless of certain identified characteristics (Anon., n.d.). Business organisations have to strictly abide by the human resource legislation when dealing with human resource policies because a failure to do so can invite legal problems for them. Therefore, it becomes an important role of the human resource management to formulate policies and practices that adhere to the human resource legislation
The human resource managers of business organisations can take a number of actions that can help them in complying with the human resource legislation. First of all, all business organisations should have a legal advisor who has complete knowledge about the human resource legislation and can help the company in drafting its human resource policies and practices. Secondly, during policy making and development, the human resource managers should involve the legal advisor into the process. All the policies should be reviewed by the legal advisor and should only be implemented after being approved by the legal advisor (Anon., n.d.). Thirdly, the organisation should be well aware about the various sections of the human resource legislation that adheres to compensation & benefits, working hours, annual leaves, etc. as decided by the government of the country. it is also important for the organisation to be equal to all its employees and not discriminate amongst them on any basis. Fourthly, the senior level employees and managers of the company should be adequately trained and educated in the area of human resource laws and regulations so that they can act carefully. Fifthly, the management can also prepare an employee or a company handbook in which it can list all of its policies and procedures and how the business of the company will run. In this handbook, the management can also include all the legal guidelines that govern the different policies of the company. Lastly, organisations can also arrange for regular human resource audits that can help in conducting a review about all the human resource functions that the company executes. This will help in identifying problems that can result into legal troubles for the company because non-compliance of any kind can cause financial and reputational risks for the company (DAVIS & CARNOVALI, 2010). Thus, by scheduling regular human resource audits, a company can reduce the risk of getting into legal issues.
Globalisation is the process through which business organisations have started developing international relations and have also started to expand their own business operations into different countries. Globalisation has not only made the business world a smaller place but has also increased the competition in all industries. As more and more business business organizations are expanding their businesses into foreign lands, they are adding more value to their business and are increasing the level of local as well as global competition.
Palermo Safe Storage can also add a great deal of value to its business by making use of globalisation. First of all, globalisation can help the company in entering new markets which are still not tapped by the competitors and can still offer a huge potential and growth to the company in terms of demand for products and services. Secondly, the company can make use of globalisation and can develop relations with other business organisations in the world to increase its business or to discover new business possibilities and opportunities. Thirdly, the company can make use of globalisation and can set up business units in different countries in order to take advantage of economies of scale. For example, expanding into developing countries or outsourcing products or services from developing countries can allow the company to bring down its operational or production cost because of less labour costs and due to availability of cheap resources in abundance (Rasel, 2014). Fourthly, the company can also benefit due to globalisation by expanding into different markets and availing resources that are not available in its home country. Sixthly, different countries have different laws and regulations and expanding into different countries can help the company in receiving tax benefits and increasing its profit margins. Lastly, the company will be able to add a lot of value to its business through globalisation because it will help the company in increasing its customer base and reducing its vulnerability to local demand and supply factors.
In the present day world, the customers are becoming smart and want to get into business with those companies who have an ethical behaviour towards its stakeholders and have strong mission and vision statements. In such conditions, the negligence of the company towards its human resources even when it gives it so much importance in its mission and vision statements demonstrates an unethical behaviour of the company, which can lead to defamation and loss of market reputation. Therefore, it is important that the company should start taking the management of its human resources seriously and should ensure proper functions so that it can foster a positive work environment, gain market reputation and become an employer of choice.
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