Organizing Work and Managing Human Resources

The Role of Human Resource Management

The Human Resource Management which is defined as a system of management is responsible of selecting, training, developing individual for their work, ensuring prompt payment, adhering to employment laws and maintaining relation encouragement between management and employees. It plays an important role in any organizations by implementing the practices and policies in order to fulfill the organization’s requirement towards its people throughout their working lives and provides a safety & healthy environment.

As a business grows from a regional crossing the border, the Human Resource Management role must take on a new and broader perspective. As a national organization expands overseas, initial with a sales operation followed by the production facilities and fully expanded operations or to international joint ventures, the human resources role must adapt to a changing and far more complex environment.

All the basic functions of domestic Human Resources Management or HRM are more complex when the organization's employees are located around the world, and additional HRM activities are often necessary that would be considered invasions of employee privacy in domestic operations. This is necessary partially because of the increased vulnerability and risk of terrorism sometimes experienced by many employees while working abroad.

When an organization plans to send its employees overseas, the management should take on responsibilities which will add to the basic of HRM functions. For example, the staffing, and training and development functions take on greater emphasis. Not only the organization concerned about selecting the best employee for the job but to be aware of the entire employee’s family's needs. This is vital important for the management’s consideration because many individuals who take international assignments fail because their spouses or family just can't adjust to the new environment. Furthermore, the relocation and orientation process before departure may take months of foreign language training to be included for the employee and his or her entire family. Details such as work visas, travel, and household moving arrangements, and family issues such as the children's schooling, medical care, and housing all must be provided for. Administrative services for the expatriate employees also must be available once they are placed in their overseas posts. All these additional functions make international HRM a very costly undertaking.

Globalization has various aspects which affect the world in several different ways such as:

· Industrial - emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies.

· Financial - emergence of worldwide financial markets and better access to external financing for corporate, national and subnational borrowers.

· Economic - realization of a global common market, based on the freedom of exchange of goods and capital.

· Political - political globalization is the creation of a world government which regulates the relationships among nations and guarantees the rights arising from social and economic globalization. (Stipo, Francesco. World Federalist Manifesto. Guide to Political Globalization, ISBN 978-0-9794679-2-9)

· Informational - increase in information flows between geographically remote locations.

· Cultural - growth of cross-cultural contacts;

· Ecological- the advent of global environmental challenges that can not be solved without international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species.

· Social - increased circulation by people of all nations traveling around the world.

· International cultural exchange

o Spreading of multiculturalism, and better individual access to cultural diversity such as the export of Hollywood and Bollywood movies.

o Greater immigration including illegal immigration started to flood in every country in the world.

o Spread of local consumer products such as food etc to other countries often adapted to their culture including genetically modified organisms.

o World-wide fads and pop culture such as Pokémon, YouTube, and MySpace.

o World-wide sporting events such as FIFA World Cup and the Olympic Games.

· Technical

o Development of a global telecommunications infrastructure and greater transborder data flow such as the Internet, communication satellites etc.

o Increase in the number of standards applied globally such as copyright laws, patents etc.

· Legal/Ethical

o The creation of the international criminal court and international justice movements.

o Crime importation and raising awareness of global crime-fighting efforts and cooperation.

o Sexual awareness –Globalization may also have social effects such changes in sexual inequality.

o Increasing concentration of wealth - Globalization was responsible for the largest sovereign debt default in world history, bankrupting the entire nation of Argentina in 2002.

· Countries are more economically interdependent than before, particularly in view of foreign direct investment interlocking economies, as well as increased free trade.

· Governments are increasingly less able to control the flow of capital, information and technology across borders.

· There has been de-regulation of financial and other markets, and the integration of markets for goods, services and capital such as the European Community.

· Production of goods and services acceptable to the global market, and the convergence, to a great extent, of customer tastes across borders determined by quality.

· The need to achieve competitiveness and to remain competitive in respect of attracting investment, goods and services.

Managing Change

The economic crisis and downsizing has given a profound impact in HRM for example in Korean firms. After the economic crisis, many Korean firms have been forced to reduce their workforce: 66% of listed companies are reported to lay-off their workforce. (Korea Labor Institute, 2000).

Therefore, the organization should take positive safety measures to secure the flexibility in managing their workforce and prevent a huge loop occur for employees to have any opportunity to hop to other companies or organizations. Looking from these changes in both sides has given a strong shock to the traditional HRM system, based on long-time employment and seniority-based compensation. For example, Korean companies are creating task to develop and motivate core workforce under the generalized job insecurity and distrust among employees.

The global economy led acceleration of workplace change puts different demands on the HRM with the suggestion of workplace change is impacting at least five key areas as follows:

1. Work and working life (travel, longer working hours, etc),

2. Structure of jobs (continually changing work demands, less prescriptive jobs, projects, etc);

3. Communication and information demands;

4. Work life balance issues; and

5. Education requirements.

Therefore, the demands of the global economy impact the HRM role and change the priorities of HRDM. The knowledge workplace requires workers who are flexible, embrace and encourage change and able to navigate information effectively and efficiently. They need to be more mobile both within organizations, intra-industry, between industries, and globally. Staff turnover in global economies tends to be far higher as a result. The HRM managers need to be team players, and be adapted at project work as this is the way most work will be done – and teams may be formally organized, or could be self-forming, and changing continually. Hence the ability to work in different teams, with different mixes of capabilities will be a requirement for employment success.

Managers will also need to be creative problem solvers as they will need to develop new ways to solve old problems and develop creative solutions to new problems. Need to develop functions and capabilities of as technical ability to complement the creativity and innovation; and more generalist staff will need to develop greater analytical capability. (Dr Helen Lange Associate Professor of Finance and Director of MBA Program Universitas 21 Global, Singapore)

Changes in IR practices such as increased in collective bargaining, flexibility in relation to forms of employment as well as in relation to working time and job functions have occurred as a result of such factors as heightened competition, rapid changes in products and processes and the increasing importance of skills, quality and productivity. These factors have also had an impact on HRM policies and practices. In managing change, the key elements include employee involvement in effecting change, greater customer orientation, and ensuring that the skills of employees are appropriate to the production of goods and the provision of services acceptable to the global market. As such, managing people in a way so as to motivate them to be productive is one important objective of HRM.

The management should include in its goals improved quality and productivity, greater flexibility, continuous innovation, and the ability to change to respond rapidly to market needs and demands. Effective HRM is vital for the attainment of these goals where improved quality and productivity linked to motivation can be achieved through training, employee involvement, commitment, team work and rewards.

From a purely HRM perspective, the following factors should be considered to increase interest in HRM practices:

a. Improving or utilizing human resources for better achieving in competitive advantage.

b. Declination of trade union can influence the way of focusing on more individual issues.

c. The emergence of better educated workforces with higher individual expectations, changes in technology and the need for more flexible jobs have, in turn, created the need to incorporate HRM into central management policy.

d. Many important aspects of HRM such as commitment and motivation emanate from the area of organizational behaviour, and place emphasis on management strategy. This has provided an opportunity to link HRM with organizational behaviour and management strategy. (http://www.ilo.org/public/english/dialogue/actemp/papers/1998/srshrm.htm#c1 25th May 2008 2150)

Developing human capital

A Human capital is defined as the knowledge, skills, abilities and capacity to develop and innovate possessed by people in an organization has been recognized as an asset and it is clearly important for the organization to quantify the value of this asset. This is vital for informed decision making about how to manage, and maximize the return on investment.

In order to be effective, the organization must be able to understand the relationships between these different forms of capital. People have to be motivated and managed by the use of good HR practice and given the opportunity to develop and use their skills to create goods and services which can be sold. If the knowledge they are creating cannot be embedded in goods and services that are in demand, then this human capital will have no value to the business.

According to De Geus (1988), learning is important, not only for organizational survival, but also because the ability to learn faster than competitors may be the only sustainable competitive advantage.

Employees develop skills of expression and communication that spill over into their personal lives. They not only become more effective in their present responsibilities, but help transform the nature of work in which they are engaged creating new work practices and forms of production. Therefore, it is vital importance of that learning in organizational settings should be continuous, if both the economic and social goals of enhanced participation in learning are to be realized. (Boud & Garrick 1999, p. 1).

Therefore, the management should identify and design human capital development with the aims of proving the value of people by assessing the impact of human resource management practices and the contribution of people to bottom-line performance. This development should include the influence of customer satisfaction, innovation, service delivery and numerous other contextual factors.

Outsourcing

The organization management should consider of practicing the outsourcing strategy which has clearly proved that many companies outsource successfully will be positioned to focus on their core competencies, and those functions remaining within the company will contribute increased value-add to the organization.

For companies with international operations, the practice of outsourcing will enable consistency across the organization. Larger companies will be able to leverage long-term contracts with human resource outsourcing companies (HROs).This trend is contributing to the growth of mega-HROs such as Hewitt, Ernst &Young, and others. The first human resource functions to be outsourced include recruiting, benefits, compensation and require managing the continuous improvement process.

Adapted from 'Organizing Work and Managing Human Resources' by Capt Muhd Ismail Mohd Noor