There are pressures in today’s organization from several directions like increase in globalization, tough competition, rapid change in technology, new structures, organizational changes including change in hierarchies, organizational alliances, new ways of work assignment. Thus, within these conditions, organizations need the human resource department to function in a proper way which will help and assist the organization to move through the transitions swiftly. The role of the human resource is evolving recently due to the shift from the personnel to the human resources. Also, the human resources (HR) professionals play a key role in helping companies to achieve the objectives of the corporate social responsibility. Involvement of the human resource management in to the changing scenarios is a powerful tool that bring success to the organization. the world of business is persistently changing and it is bringing the with it the external and the internal changes that impact the business (Paillé et al. 2014). The study is based on the assessing the evolving the role of the human resource in the contemporary business world.
Key forces that shape the HR agenda
The Human resource leader worldwide have accepted that there are top five areas that influence their human resource agendas. These five areas involve process improvement, talent acquisition, organizational culture, employee engagement, talent development.
Process improvement- how the human resource professionals deliver the services to the organization? each and every concern related to the human resource can be managed by building efficient processes. Information, benefits and programs should be delivered seamlessly. Improving the processes will efficiently improve the overall functioning of the organization and at the same time enhance the employee engagement. To gain efficiency, enhanced relationship among the leaders across several businesses and better communication throughout the enterprise, a review of the internal processes is necessary. The important aspect is the implementation of the better automation along with the better human resource technology. The human resource management system or the human resource information system facilitates information technology and the human resources that are vital for the processes existing in an organization (Armstrong and Taylor 2014).
Talent acquisition- acquisition of the right people for the daunting tasks when there is a shortage of the skill workforce and the market gaining the competitive edge can be very challenging. The human resource department worldwide are shifting towards a transition of a more strategic approach which includes the talent procurement, talent forecasting and workforce planning, strategic talent management and talent pipelining. The other challenges of the human resource management are to not only gather people that are eager to learn, but also to engage them and fit them into the organizational culture. A stronger understanding of the needs of the various managers that hire individuals is also important (Alagaraja 2013).
Organizational culture- the more the employees of a company engage and begin to understand the needs of a company’s target, the more it leads to an increase in culture. Culture is considered to be organic in nature, and thus requires not just the leadership approach, however a holistic feeling is also required on how an organization functions or operates. This also includes the missions and the goals. An individual can lead an organization to a specific culture, however this cannot be forced. If a culture is enforced upon the employees, then there is an increased chance of employees leaving the company. the chief responsibility of the human resources manager or professionals is to make sure that the employees understand the work culture, the direction where the company wants to head and the company will achieve that position. At the it is equally important that the leaders of the company communicate the vital visions so that the culture can evolve within the company (Bolman and Deal 2017).
Employee engagement- employee engagement is one of the most vital part for any organization or company. Employee like when they are being heard and thus ideas prop up from people from which it is least expected. Here, the human resource management plays a major role in closing the gap between the leader and the employees and facilitate to provide a channel so that the voice and the ideas of the employees are listened properly. the top leader of any company can go lunch and have talk with the most talented employees so that there is a chance of hearing the voice of the employees. This kind of the activities can be organized by the human resource management and it provides the employees an opportunity to ask question, give suggestions and improvements to the top officials of the company. While at the same time, the employees also get the idea of future plans of the company or the organization (Albrecht et al. 2015).
Talent development- After the selection of the abled individuals that seek to work in the company, the human resource management’s next job is to provide friendly atmosphere where the employees can grow through the opportunities and promotion that are provided by the company. These employees not just want the paycheck, but also will search for the opportunities to get promoted. This talent development and the employee growth exist in different forms. The main goals of the human resource management are to identify the opportunities that exist within the talent development, and then create an effective strategy that will promote the development of the company. talent development programs consist of the conferences, learning events, training programs and at the same time the mentoring programs as well. These programs are easy to set up within the premises of the company and cost less money to operate. The more a company will invest in its employee, the more the employee of the company will be involved and engaged and at the same time will increase the retention rates (Garavan, Carbery and Rock 2012).
Change management- most of the organization fail to function properly due to the miscommunication, inadequate preparation and employee resistance. Studies have shown that change initiatives have shown to twice more likely to fail due to the organizational resistance and less of the operational or technical issues. it id found that of the change is not conveyed to the employees, it leads to the loss of the business opportunities, duplicated efforts, inefficiencies and disasters. Companies that are able to gain an advantage over their market competitors lead to increased success. When the change in management is executed efficiently, it reduces uncertainty among the employees, reduces the negative impacts on the productivity and employee workforce. There are certain aspects which a human resource management has to keep in mind while overcoming resistance. Overcoming the resistance can attribute to the employee resistance which is common when an organization is undergoing organizational changes. The key strategies undertaken by the human resource managers are: consistent and clear communication of the change, assist the employees to understand the need to change, ensuring that the team of change management includes a change champion, provide a support constantly changing environment (Hayes 2014).
Ethics- the importance of ethics in the workplace has gained a lot of acclamation. Different kinds of organization have stressed a lot of importance to the occurrence of misconduct. Although companies employ ethics officer that implement and champion the different facets of ethics and the roles of monitoring the ethical standards are divided equally among the human resource officer, risk officer, compliance officer, company secretary, ethics officer. However, even though there are several other top officials that promote ethics in a company, important role of human resource cannot be nullified. The three important factors that contribute to the promotion of ethics are: ethical awareness, ethical standards and operational ethics (Armstrong and Taylor 2014).
David Ulrich Human resource model- the model emphasizes on the organization of the functions of the human resources. The model creates a unified structure that delivers value, clearly defines the role of the human resource management, creation of a competitive edge for the company, measuring the performance of the company. the model emphasizes on defining the roles, responsibilities of the human resources management and the framing the job profiles of the individual employees. Although the implementation of the model arises some complexities, but it has been found through studies that the model brings positive results from the employee satisfaction index, positive feedbacks from the managers regarding the job of human resource management (Bratton and Gold 2012).
Strategic human resource management- it is a practice that emphasize on the retaining employees, rewarding, developing and attracting by the human resource strategies which will benefit both the employee and the organization. human resource managers or officials that work in an organization do not work in independently, rather interacts with the other departments and understands their goals and realigns the goals so that they can benefit the organization on the long run. Thus, it can be inferred that the goals of the Human resource management align with the goals of the company. strategic human resource has been found to be a partner of able partner in organizational success. Strategic human resource creates the opportunities so that the other departments can work effectively to make a strong work horse all together (Daley 2012).
Comparison of tools for analyzing the business environment
SWOT analysis- SWOT is an acronym and it stands for strengths, weakness, opportunities, threats. SWOT analysis can be described as list that assess the strengths, weakness, opportunities, threats of a business. This tool provides an insight of the of the changing environment and provides an option to act proactively. It is vital to determine the strengths of a business, whereas possible threats can be possible threats from the unstable economy and the market competition, lowered purchasing capability of the people. The companies and the organizations must plan to eliminate the threats (Sevkli et al. 2012).
PESTLE- PESTLE analysis is also called the PEST analysis. It is a concept used in marketing. Moreover, this tool is used to analyze the new product/project/service launch and is also used to track the environment in the country is operating. PESTLE is an acronym which when expanded stands for the political, economic, social, technological, legal and environmental. This tool provides a top view of the entire environment from the different angles of a specific subject which needs to contemplated upon. The political factors provide an insight that the political situation must be considered when framing the strategies. The political situation can be attributed to the government leadership and the ongoing government tariffs, custom laws, tax laws which are necessary during the formulation of the business policies. Economic factors can be attributed to the foreign exchange rates, fiscal policies, monetary policies, inflation rates. Social factors can be attributed to the culture and the mindsets of the people of the different countries. Other aspects include the social lifestyles, cultural implications and gender. These must be kept in mind when framing the organizational policies. Technological factors refer to the digital advancements and the consumer feedback accordingly. Legal factors contribute to the laws and regulations that the companies must keep in mind during framing of business policies. While the environmental factors include the climatic factors, geographical location of a country. Thus, these are the vital factors that the organizations must consider before framing the business policies (Zalengera et al. 2014).
Porter’s 5 forces- This is an effective tool which is framed by Michael Porter, a Harvard Business School professor. It is important tool that helps to analyze the and understand the internal and the external forces that shape competition in an industry. This tool is helpful in adjusting the strategies according to the business environment and the make changes to increase the profit margin. This tool work on the five main forces that affects competition. Supplier power: the capability of the suppliers to drive the prices of the inputs. Buyer power: the effectiveness of the customers in controlling the prices. competitive rivalry- the strength of the competition existing in an industry. Threat of substitution- the degree or the extent to which a product can be used in place of another. Threat of new entry- the ease with which a new product enters the market and make good profit (Lee, Kim and Park 2012).
PESTLE analysis is perfect for the such companies that want to conduct research on market that are based on products and industry. The porter’s five forces are applicable when assessing the market competition and establishing its relation with the profitability. Pestle analysis assists the experts to find out the factors that help in the decision-making process. Pestle analysis consists of the several factors like the technological, social, political, economic factors which influences the normal functioning of the organization. the tools are efficient in finding the present condition and at the same time predict the future concerns of a company. Whereas the SWOT tool helps to bring the opportunities and the possible weakness in front of the analysis. It is important and vital for the company to determine the advantages related to the business like the quality products, quality of the manpower, cost of the resources, unique selling proposition to stay ahead in competition to the remaining competitors in the market. The strengths are considered from the perspectives of the customer and the internal to a specific company (Buller and McEvoy 2012). The identification of the weakness is necessary so that the correct strategies can be implemented for the improvement of the business. The various weaknesses can be sorted like outdated market research, infrequent cash flow, insufficient record keeping, high rental costs of office, pending work burden, missed deadlines. The opportunities of a certain type of business consist of the high demand of the same type of merchandise, high demand of the seasonal products, loyal customer base, a uniform trend of product sell. The companies that find the opportunities to be open can build upon it a can deal with the threats by emphasizing on the strategies taken by the rival companies in their product line (Raluca 2013).
Through the PESTLE analysis the microenvironment of an organization can be analyzed. This particular tool helps the managers to make a thorough analysis of the present situation and at the same time make certain predictions of future position of the company. this analysis in particular consist of the several components that are denoted by each letter of the acronym PESTLE, this acts as an influencing factor of the industry. The results from the PESTLE analysis tool helps a company to plan its future. Whereas, in comparison to the SWOT, the PESTLE model is more robust and provides an overall macro environment through an overall analysis. The analysis helps in attaining a smooth functioning of a specific organization. the Porter’s five forces is a special model that can be utilized to find out a competitive assessment of an organization. this tool helps to find out the viability of a particular product, service or even future expansion. Whereas, SWOT is more of a generalized assessment of a business company (Muhammad Siddique 2015).
Factors that impact an organization and its HR functions
Both the internal and the external factors play a major role in in affecting business of an organization along with the human resource functions. The different types of factors that contribute to the impact are as follows:
Government regulations- New regulation and government policies and laws are constantly being formed on a regular basis that affects the functioning of the human resource department, such as the human resource policies, compensation, termination, training, recruitment. Accordingly, a company policy must comply with the rules of termination of an employee which is already framed by the government. Whereas, if such procedures are not followed then heavy fines can be imposed on such companies. This can have a detrimental impact on the image of the company. There are several companies, who wrere affected after the Donald Trump government of USA shifted the government regulation about cyber security. Several companies had to change their security tools ans aspects to comply with the newer security norms of the USA. Further, thousands of workers had to leave their job as the Visa renewal service was stopped (Terrill 2017). It is an excellent example of an external factor (Naff, Riccucci and Freyss 2017).
Technological advancements- technology is considered as one of the external factors, which is changing in a rapid fashion and at the same time is influencing an organization largely. There is a huge pressure upon the companies to integrate the latest technological advancements into their systems. Then there comes an important aspect that adopting the newer technologies can make the usage of the human manpower a bit redundant. Thus, it will result in HR department taking extra effort to terminate the employees because their share of work is executed by the new technology, which is integrated into the system (Knowles, Holton and Swanson 2014). According to Forbes (2017), three Indian companies reach the heights of success by simply implementing clean technology into the system. The companies are Tessol, Altigreen Propulsion Labs and Cleaning bug technology. They mainly used renewable energy system and implemented in their organization to gain the business.
Economic conditions- The biggest and the most important external factor that impact an organization to a large extent than any other factor is the economic conditions prevailing in a country and the same world over. Economic conditions impact both the talent pool and the hiring strategies framed by an organization. Organization and companies must have the effective strategies to shield themselves from downturn in the global economies. For example, during the economic downturn, organization reduce the recruitment drives so that the costs can be reduced (Aswathappa 2013). There are more than 600 workers, who were sacked by the company Wipro in the year 2017, due to their economic loss. Those employees recorded that the company first reduced their pay scale and after few months fired them without any solid reason (The Economic Times 2017).
Workforce demographics- This is one of the vital internal factors that impacts both the organizational and the human resource management functions. This factor typically deals with the population of retiring employees and the several methods of hiring employed by the companies or the organizations. There are different types of recruitment strategies and the companies must look and employ such strategies that suits the organization. After a proper recruitment strategy comes the next big thing called the compensation or remuneration. Proper and efficient remuneration must be designed for the various sections of the employee. For example, if employees of an organization is about to retire then there is a big responsibility of both the organization and the HR department to hunt for the new employees (Bratton and Gold 2012). The best example of managing diversity and demographics at the workplace is Google Inc. The company has managed to work with diverse and different people and by implementing such change in their organizational human resource related department they have achieved success (Forbes 2018).
Key stages in the strategy formulation
The human resource strategies are the various steps that needs to be employed and followed. The steps are vital because it gets translated in to a strategy that an organization follows to achieve the desired organizational objectives and the goals. It is important to note that the human resource professionals are deeply involved in each of the steps (Karami 2012). The steps are as follows:
- Determination of the objectives of the organization
- Evaluating the environment existing in an organization.
- Framing of the qualitative goals and objectives.
- Proper and effective communication with the departmental plans.
- Performance analysis and as well as analysis of the performance gap.
- Selection of effective strategy
- Developing an organizational framework for the effective implementation of the strategy successfully.
- Distribution of the sufficient amount of funds and resources for the vital activities.
- Policy creation which will be in accordance with the important activities.
- Constant framing of programs and policies which will lead to improvement is organizational functioning.
- Creation of proper link between the accomplishment of the results and the reward structures.
- Efficient and effective utilization of the efficient leadership (Reitzig and Sorenson 2013).
The strategic human resource consists of the two different types of processes which are known as the horizontal and the vertical processes. The horizontal integration involves the coordination of the different types of the human resource practices. This horizontal integration also deals with the allocation of the resources. While the vertical integration includes the alignment of the organizational objectives with the human resource practices. This is a sort of a contingency or emergency approach which is designed to work in accordance with the organizational goals. The basic idea behind this strategy is to create a flexible and fit organization, while the main motive is to efficiently and effectively coordinate and manage the dynamic environment existing within the organization. The best practices of the of an organization include the training of employees, compensation packages, decentralization, selection of the employees. It is important to note that formulation of the strategies and the implementation of the same are the main objectives of HR team (Armstrong and Taylor 2014).
Strategy formulation- The main stages in strategy formulation are the functional strategy, business strategy, corporate strategy and strategic choice. Strategic choice speaks of the alternatives that are work for the betterment of the organization. The corporate level strategy involves the overall goal and the philosophy of the organization that it employs to attain the goal. HR takes the initiatives of utilizing the various resources into the corporate space of the organization, performance improvement of the employee and managing the workforce diversity (Reitzig and Sorenson 2013).
Strategy formulation and implementation models- there are 2 models that highlight the strategy formulation and implementation. The models are resource based and control based. Resource based model emphasize on the employer-employee exchange and as well as employee behaviors. The control-based model speaks the fact that the organization thoroughly evaluates and monitors the activities and performances of its employees. The model is based of the degree of workplace control and the managerial behaviors (Bratton and Gold 2012).
Business performance evaluation
The employees of human resource play a vital role in the formulation of business strategy. HR should work to imbibe new skills into the workforce and hire new employees that will suit the organizational needs and goals. At the same time HR also has the responsibility for formulating the training methodology and suitable skills. The structure of the performance management of the employees is devised by the human resource department. For the purpose of evaluating the business performance, it is necessary to evaluate in accordance with the modern as well as the traditional indicators. The traditional indicators are capable enough to show the performance of the employees with respect to the organizational goals and objectives. Traditional indicators only show the average results. Whereas the modern indicators can consider all the important aspects of the employee activity within the business processes. The evaluation process depends on the value-based management system that includes the cultural goals, analytics, processes, system, strategies of the concerned company. Examples of traditional indicators includes the performance evaluation of an employee with the organizational goals. Example of modern indicator include the 360-degree analysis of the performance of an employee (Köseoglu, Yazici and Okumus 2017).
Assessment of the different data sources
There are different types of data used by the HR professionals. These are both qualitative and quantitative data sources. Balanced scorecard is used by the HR managers to make an alignment of the business activities with the goals of the company. Evaluate the performance of the organization and improve communication. This scorecard was devised by Norton and Kaplan. Another model called the AMO-black box model is used to analyze the employee performance. The AMO depicts the Ability, Mobility, Opportunity. The back box depicts the relation of the performance management with the HR. HR professionals also use the Cotter’s stage model to analyze the change management system within an organization. HR managers also uses the various types of internal data for the formulation of the decision-making strategies and also for planning. That different data used are the financial data, sales data, policy related data, performance data and marketing data. There are external data like the technological advancement data, environmental analysis data, governmental data. HR managers utilizes both the internal and the external data and devises strategies for the smooth functioning of the organization (Amin et al. 2014).
Within the business environment, there exists both the internal and the external factors that affect the decision making of the HR professionals. HR managers plays a avital roe in balancing the internal and the external factors. HR is essential for the regulation of the processes in business and implement the policies and strategies that are beneficial for the organization. This study report is beneficial both in understanding the organizational and HR strategies, also helping the HR to act proactively to the changes occurring in the external environment.
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