19 May 2006

Emerging challenges in Human Resource Management

If we want to understand the emerging challenges in the human resources management, it is perhaps necessary to develop a perspective of the new situation which organizations might have to face in future. Some of these changes are clearly discernible, while others show clear evidence of their probable occurrence.

Approaches to Human Resources Management are not static, in the sense that they are made one time and hold good forever, on the other hand, they are dynamic. They undergo systematic changes to meet the requirements that crop up in the future. The techniques that worked well in the past may not work well in the present and those which are operationally effective currently may need realignment to cope with future needs.

Anticipating possible changes and new requirements of the future and making prior preparations are always better strategy than waiting for the changes to catch us unaware, or remaining in complacency or involving in what is termed as ‘fire fighting’. Thus in the area of human resources management the practitioners should have futuristic-orientation as in the case of other functional areas, such as technology forecast, investment decisions, market analysis etc.

The fact that future may pose totally new problems due to different kind of changes and pressures in the business environment and that the current strategies may prove inadequate, bring us to the awareness of so called ‘Emerging challenges in Human Resource Management’.

Emerging challenges assume the form of the need to deal with emerging problems in the area of Personal Management and Industrial Relations in the coming decade. In order to understand the emerging challenges in the management of Human Resources, it is perhaps necessary to survey, understand and predict changes in the following sub-environments of the total environment within which Business and Industry operate, adopting ‘Systems Approach’

Technological Developments (Technological Revolution)
This includes growth in size and complexities of organizations and automation, including computerization. It is necessary to examine (a) how technological developments affects the design of jobs in terms of changing pattern of educational skill requirements, organizational structure performance control, etc, and the implication of these on techniques like personnel recruitment, selection, job analysis, job evaluation, developing compensation plans, developing appraisal systems and task structuring and (b) the strategies in the introduction and management of technological changes to secure the vital employee acceptance of the programme and productivity of the enterprise.

Changes in the Economic Environment

This includes examination of the impact of a number of factors on production. Some of the key factors are the scarcity of raw materials and other inputs including power and electricity, encouragement of the culture of consumerism, increasing consumer awareness and demand for quality products, continuing upward trend in the inflationary pressures with decrease in the purchasing power of rupee and its spiraling effects in the ever increasing aspirations of workers for higher wages and other material benefits and mounting costs on the employee welfare and other benefits.

In an inflationary economy, the resources tend to become scarce and the costs of machine, materials and labour multiply. These push up the capital and running costs.

The import of foreign technology experiences heavy constrains due to adverse balance of payments and this generates further pressure in developing indigenous technology.

The escalation in the cost of production per unit which is expected to continue at much faster rate in the coming decade than it is today may keep the managers under tremendous pressure to utilize the human resources in judicious combination with other physical resources, particularly when the human factor is singularly potent in making the other inputs work. It is known that at the end of all the technological innovations, the factors that make or mar productivity are the human factors and hence in any productivity programme it assumes greater importance.

Changes in the Legal Environment

It includes Industrial Relations and Employee Welfare Polices of our Government, which are enforced through a plethora of legislative measures.

Changes in the Socio-Cultural expectations of the work force

These include changes in the compositions of work force in terms of their education, social background, roots in urban setting and exposure to larger democratic culture of our country, all of which bring about changes in their expectations, attitudes and value-orientations which have bearing on the approaches to Human Resources Management.

Technological Revolution :

Strong winds of changing technology in several fields are clearly noticeable with the advent of the so called ‘Electronic Revolution’. The electronic wonder-the ‘microchip’ is indeed creating quiet but sweeping changes. Computers have become smaller and smaller. The personnel computers have started invading executive desks Micro Processor-based controls are increasingly being introduced in industry in regulating processes for ensuing quality and productivity.

Numerically controlled precision machine tools are fast replacing the traditional type of human operations and the conventional machine tools. Computers are introduced in offices and industrial organizations for several purposes, like production planning, control, marketing, financial analysis and so on. Robots are entering industry in a big way due to Japanese lead. The use of communication satellites have opened up a new international communication order. One of the latest developments in communication technology which is now available to our executives is ‘Tele Conference’. With the help of this facility executives in different organizations from far away can convene conference and exchange ideas without having to move from their personal executive environs and without wasting time and energy in jet travel. Office systems, like word processors are fast replacing the conventional equipments and styles of work. This view is also, shared by another Management Expert Thomas W.Gill. He says machines will soon take over all the routine clerical work, acting as clerical steam shovels…, keeping records will be done once. Personnel information will be recorded and stored in machines and print-outs from the machines will satisfy all the reporting needs.
What are the impact of these changes on the organization, its structure and jobs and in turn the patern of skill requirements, style of management and new conduct and discipline on the part of employees? Some of tose are;

Upgrading of the Skills at Lower Levels :

The technology brings in its wake the need for correspondingly higher human skills to handle them. For instance, there is need for higher skills and intelligence to operate a numerically controlled machine than is required to man a conventional one.

The need for increasing degree of mental application :

Developing a sense of urgency and sense of reciprocal understanding or roles and the need for increased team spirit and technical-orientation becomes a necessity.

Referring to the consequences of technological changes in the form of computerization ‘Peter Ducker comments, “Old fears that automation would result in large scale unemployment have universally been disproved. Few companies that installed computer to reduce employment of clerks have realized their false expectations. Most computer users have now found that they need more and more expensive clerks, though they call them operator or programmers. All automation might do is to shift employment from fairly low paid manual jobs to much paid or professional work”. With increase in technological complexities due to anticipated technological revolution, the number of specialized jobs or staff positions may increase as opposed to line positions. The traditional pyramidal type of organization design (fraternal or centralized type) may increase as flatten at its base. In cases of R&D organizations, it may even turn into a matrix structure. In the new structure, there will be more positions, at the junior and middle level requiring specialist skills than positions, requiring standardized routine work. Again, more self responsibility, originality, innovativeness, better appreciation of time, more personal dynamism, better imagination, zest for excellence etc., will be on demand. Because of increasing number of the so-called (to use Peter Ducker’s terminology)’ ‘Knowledge workers’ and the need to operate the systems at high speed, accuracy and in unison, coordinative or collaborative efforts could also assume additional importance.

At every level, more time and energy will have to be devoted for communication with people at next lower level, involving them, showing a sense of mutual trust, confidence and respect, providing challenge and partnership and developing perceptions of common goals of organization.

Are the current personnel systems and practices adequate to meet some of the emerging demands in the management of Human Resources, as a result of the technological changes? What are the emerging challenges?

It is possible to conceive some of the new challenges. These are:
1. Identifying more precisely, than is done now, the duties, responsibilities, skills, aptitudes and work ethics that make up new jobs, by applying scientific job analysis techniques.2

Currently, jobs are not analyzed scientifically and job descriptions are not systematically developed. Many management scholars2 who studied Indian organizations have come to this conclusion. Thus, there is lot of ambiguity and conflict which are personally frustrating to employees and also organizationally unhealthy. In the new technological environment, the job incumbents will look for much more job clarity than is made available now.

2. The need to rationalize selection and recruitment procedures and employee training.
The organization will be under greater pressure to locate people with required aptitudes and skills. This is so because in a complex technology, human error is more costly than in the case of traditional technological set up. The axiom of ‘fixing the round peg in the round hole rather than ‘fixing the square peg in the round hole’ should assume added significance. Once the persons are selected carefully they also should be placed properly and should be given continuing training to update their knowledge and skills and to save them from obsolescence. Thus, proper identification of training needs and selection and development of training methodologies assume added importance. Gaps in training will immediately reflect in production, as knowledge and skills are more critical factors underlying performance.

3. The need to establish a more clear-cut link between employee performance and administration of rewards by instituting objective performance appraisal system :
The knowledge workers would expect a clearly perceivable link between their efforts (performance) and administration of rewards (salary and other monetary and non-monetary ones). In other words, they look for recognition of their efforts, in addition to clarity of goals and performance standards and operational freedom. This can be achieved through the use of scientifically developed system of Performance Appraisal. Currently, the Practice of Appraisal used in many Indian organizations require improvement. In many organizations, the discredited system of C.R. (Confidential Records) is still in vogue. As the information from systematic appraisal is not use in salary administration, the salary differentials do not generally reflect differentials in responsibilities, skills etc., with the result that salary administration, which is one of the potent tools in the hands of management for motivating employees, does not serve its motivating function. It will be a new challenge for the personnel people to develop objective criteria of performance, particularly in the case of supervisory and executive jobs and, devise appropriate methodology for assessment, and orient all line Managers to appraise the performance of their subordinates in such a way that they are willing to improve their performance.3

4. Assisting the organization to introduce new technological changes:
To choose a new technology may be much easier than its introduction in an organization, because of possible employee-resistance. We know the cases of many industrial and business organizations in our country which met stiff opposition from the employees, when they tried to introduce computers. The resistance, top management can expect not only from the side of workers and their trade unions, but also from supervisors and executives.

The personnel functionary might have to shoulder this new responsibility of assisting the organizations in the introduction of technological changes by helping the organization in instituting a decentralized and participative set up. In such a set up, the employees should be involved in planning and introduction of technological changes, which ensures their commitment. An all India study of Personnel functions by Joseph4 reveals that legal and administrative duties of labour administration constitute larger part of personnel functions in Indian organizations today. Of course, the administrative and legal duties may demand considerable part of the time and efforts of Personnel functionaries. In addition, the future will make demand on them for exercising their professional skills in other areas most relevant from the point of Human Resource utilization. They will have to help different Management levels o shift their value- orientations from “Authoritarianism” and “Bureaucracy”, which are rather deep rooted in our Industrial culture to “Equalitarianism” and train middle and lower level employees to take full advantage of permissiveness with achievement – orientation, efficiency consciousness and accountability. They will have to plan new strategies for keeping employee ‘morale’ and ‘motivation’ relatively high, continuously monitor their levels and do systematic human asset accounting. In future, share holders and even the enlightened general public might expect statements from the Top Managements what they did to appreciate the value of human capital not only in terms of upgrading technical skills but also in terms of fostering supportive and motivational climate, as a part of their Annual Budget Statements.

With the complexities in technology, the human will and potential assume more importance. Realization of this spirit is found in the so called ‘Japanese Style” of Management. Organizations rely heavily on the potentialities of their employees and give them the highest place in production. They do not consider them as just factors in production. They provide them with an environment conducive for production. They provide them with an environment conducive for productivity and enriching quality of work experience. Many of their personnel practices such as ‘Team Approach to work’, ‘Informal Task-related Interaction’, ‘Emphasis on Productivity goals’, ‘organisation’s extended interest in the family of employees’ are and reflections of psychological and sociological principles of effective group functioning .In others words Japanese have developed a social technology matching with scientific technology.

Thus, Personnel functions are going to be all pervasive and touch upon all levels of human interaction such as at the shop floor level, union management level and within and between groups. Wherever people work together for a common goal, the personnel people will have to play a role in cementing human relationships. The personnel people in discharging their functions may have to do a ‘tight rope walking’, because they have to convince their top bosses about the need for changeover of the organizational culture from pyramidal to one of participation. This in the short run appear to erode their privilege to manage, and hence they may not be hostile to the idea. Sometimes, the Personnel Managers may have to incur their wrath unless the situations are handled wisely.

Again, democratizing the work culture is not a ‘panacea’ for all organizational evils. De-centralisation of the internal structure in response to external pressure for democratization may not be economically productive. It can even be counter productive. Thus, along with democratization, there is need to develop a sense of accountability, and productivity and quality consciousness by introducing appropriate practices such as goal setting, work planning, review, etc., These can often pose additional challenges.

Changes in the Economic and Legal Environments:

The cost of production goes up due to increase in the cost of inputs and wage bills, both of which are due to inflationary pressures in the economy. The expenditure on wages and other welfare benefits have been going up over the last several years, due to new concessions granted by the Government to the workmen and also due to increase in the bargaining power of the unions supported by labour-oriented polices of Government.

Jagadeesh, former N.I.P.M. President in his address at Mysore pointed out that “unions are getting more and more benefits like employment security, employment to their family members, wage increases, free lunch, free shoes, free polish, more and more number of holidays etc. with no proportionate return in the form of increased productivity.” He joked “Unions are always worried as to what to ask?” It is true. To check this money culture, the supervisors can perhaps involve the shop floor workers for better understanding and handling of the situations, in the sense that many of the external forces working in the minds of the workers such as shortages, inflation, etc., will have to be emphasized so that the workers start appreciating the realities and make healthy compromise. Again, the employees have absolute security of employment. The Management cannot take the workers into task easily when they neglect their work, Mr. Jagadesh in this address referred to above, quoted the case of an employee in one of the leading South Indian Banks in Calcutta who stood stark naked before his officers when he was interrogated for his misconduct. Assaulting superior officers by their subordinate staff for initiating action against gross indiscipline is not uncommon. Even the disciplinary procedures at the officer’s level are so legally involved that these officers enjoy absolute security of their positions. The senior author knows a situation in which a middle level executive gheraoed his immediate superior. The Managing Director had to intervene as a peacemaker and well wisher of both parties and patch up the differences. It may be true that it is easier for a manager to get rid of ‘his wife’ than to get of ‘his problem employee’.
The above trends may continue in future, perhaps with added momentum. These changes may have the following implications :

The Management cannot easily take punitive disciplinary action against workers for misconduct or to get from them a fair day’s work.

Because of mounting costs of production, the Managers will be under pressure to realize employee productivity.

The Management cannot expect much support from the Government either in conciliation or in arbitration to settle the disputes in their favour, because of its pro-labour oriented polices. These conditions will force the Management to re-orient itself in regard to industrial relations. They may have to avoid confrontational and legalistic approach to Industrial relations, accept and practice an approach characterized by ethics of collaboration, openness and trust between the two parties. Collective bargaining would no longer be looked upon as an arena to test the strength of the parties. Again, Industrial relations and personnel functions should not be narrowed down to the process of distributing monitory concessions across the bargaining table via union leaders. Thus, it will be one of future challenges for the personnel people to enable the organization to take a more comprehensive view (the so called ‘process view’) of Industrial Relations. Industrial Relations setting will have to be considered as opportunity no longer to be looked upon as an arena for testing the bargaining strength of the two parites. It should be viewed as an occasion for resolving conflicts and developing a sense of collaboration, mutual trust and reciprocity between the two parties. The relationships should be developed at every focal point of interaction such as shop floor participation, Participatory Forums like ‘Work Committees’, and J.M.Cs, Grievance Machinery’, collective bargaining, Disciplinary Procedures, etc. When the Management cannot relay on the external agencies for support in conflict resolution, they have to depend upon their own internal resources to resolve the conflicts constructively. The managements will be under greater pressure to run joint councils including collective bargaining effectively and solve the disputes internally without referring to a third party and also to use those forums for developing a sense of employee commitment to organizational goals. If the mechanism of collective bargaining fails, government’s intervention either in the form of conciliation or arbitration will assume greater importance, detrimental to the interests of the Management. Developing new knowledge and skills regarding the group processes necessary to run joint forums and training non-personnel people and line executives in those skills are going to be new challenges in future. There is enough documentary evidence to show that the past history of the functioning of those joint forums has been far from satisfactory.

Changes in Socio-Cultural Environment:

Since independence, there has been gradual but steady changes in the Socio-cultural background of the work force. These changes have affected people both at operative and executive levels. The gap between the Socio-cultural expectations of employees and organizational opportunities for fulfillment has resulted in mounting frustrations among them. A manifestation of this frustration at the junior and middle Management levels, which we find today, is their tendency to organize for collective action. Recent years have been witnessing the growth and proliferation of ‘Unions’ among Managers. Due to certain legal constraints and also for want of legal protection under Industrial Relations legislation, these organizations exist under the cover as Guilds, Associations, Federations etc., otherwise as ‘Karnik’ points out ‘they are new unions’. These Associations have assumed the feature of conventional unions such as their bargaining character, allegiance to other sub-groups than to their total organization, seeking environmental and political support, confronting attitudes towards their top managements, lack of cooperation among organizational members, lack of commitment to work and so on. The contesting behaviour between Top Management and the Managerial Associations have precipitated several problems in many public undertakings in India. In certain undertakings the relationships between Top Management and Associations have assumed the form of open conflict. The Top Managements in public undertakings are now faced with the problem of evolving a policy in dealing with Managerial Associations. Examination of certain current practices reveal that ‘adhocism’ prevails in dealing with Managerial Associations.6

The discontent among the employees is expressed in their work behaviour characterized by apathy, lack of result-orientation, lack of responsibility, sense of alienation, rigidity, excessive rule-orientation, resistance to change and unreasonable demands.

One could expect that the tendency on the part of higher level staff for collective action will gain momentum in times to come. It will be a new challenge on the part of the management to deal with this problem. The personnel functionaries may have to share larger responsibility in the management of managerial unions as also to revitalize the internal organizational environment in such a way that it provides a kind of satisfaction the executives are looking for and are currently lacking.

In conclusions, as one could see from the previous discussions, the new challenges in the area of personnel functions will largely be of two types: (1) Expansion of Role Boundaries of Personnel Functions and (2) Enriched professionalism.

Expansion of Role Boundaries

Pre-occupation with the administrative and legalistic duties of Personnel function will progressively give way to more in-depth professional work, intervention and application in such areas as scientific selection, placement, training, job analysis and work design, institutionalization of participatory forums and compensation plans with special reference to linking rewards to productivity. Other productivity oriented techniques in demand would be those like M.B.O., Zero defect, Quality circles, introduction of Scientific Performance Appraisal System, revitalization of internal structure and processes, new strategies of Conflict Resolution and other organizational development efforts.

In other words, Personnel Management will have a role in influencing the total organizational behaviour, taking into consideration the needs of both organization and human system.

Enriched Professionalism:

In order to meet the emerging challenges, the personnel People have to equip themselves better with skills in dealing with the human side of the enterprise. Instead of taking decisions based on manifest issues, they should be able to delve into the process level. Once they are equipped with the above skills and orientation, they will be able to develop a professional identity of their own and they would be able to go in for management applications based on Behavioural Science and Technology, which requires greater professional preparedness and attitudes conducive for continuous acquisition of new knowledge and techniques available in the field.

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References
1. Peter Drucker, Management in Turbulent Times – His New Guide for Managers Today. Pan Business Management Books – 1982.
2. See A.Sreekumar Menon, Job Analysis and its application, Management in Government, Vol IV No.2, July-Sept.1972; Mc Cormick, E.J., Jeanneret, R .P. and Macham, R.C.Position Analysis Questionnaire, Purdue Research Foundation, U.S.A.1969; A. Sreekumar Menon, “Organisational Climate and work Motivation” in Motivation and Organisational Effectiveness, ed.S.K.Roy and A.Sreekumar Menon, New Delhi, Shri Ram Centre for Industrial Relations, 1973, p.173-203.; Kahn, Katz and Rosenthal, Study of Organisational Ambiguity and Conflict.; Mayer, H.H.Making supervision Humane and productive in Meltzer, H.Nord, W.dD.(Eds) Making organizations Humane and productive, John Wiley, 1981,p.121; Roy, S.K., Bhargav.K, Sreekumar Menon A, Communication and Industrial Relations, unpublished consultancy Report, New Delhi, Shri Ram Centre for Industrial Relations: A.Sreekumar Menon. Leadership and Effective Performance. New Delhi, Shri Centre for Industrial Relations, 1975.
3. To get more comprehensive view of how performance appraisal affects human resource utilization, see the article Performance
Appraisal by A.Sree Kumar Menon published in the Souvenir of the Mysore Chapter of N.I.P.M.1982.
4. K.K.Joseph. Personnel Management in Indian-A survey.
5. Karnik, V.B.-Unions of salaried and professional employees”, in “Indian Labour Problems and prospects. New Delhi, March, 1974.
6. For more detailed discussions of ‘Managerial Unions’, see A.Sreekumar Menon Managerial Unions in Indian Business and Industry, and its Management, Lok Udyog, Mar.1975. A.Sreekumar Menon. Managerial Unionism in Indian Industry, A case In Suri G.K. & Bhargav, K. Case problems in Industrial Relations, New Delhi, Shri Ram Centre for Industrial Relations, 1975; Sharu S. Ranganekar, Middle management in search of an identity-paper published in the proceedings of the conference-cum-seminar of Officers Organisation. Bombay, June, 1973. Dayal Ishwar and Sharma, Baldev. Strike of supervisory staff in State Bank of India. Progressive corporation, 1971. Roy, S.K. and Sreekumar Menon, A. (eds) Motivation and Organisational Effectiveness, New Delhi, Shri Ram Centre for Industrial Relations. 1974.
7. For a detailed discussion of O.D. Techniques see: Wendell L.French and Cecil H; Bell J.R. organizational Development – Behavioral science intervensions for organization improvement. Prentice Hall, 1978,; (2) Dayal, Ishwar, Bennis Warren and De, Nitish. Readings in Group Development.
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3 comments:

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    Jonathan.

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