NOV- 27-28, 2009 BY RAJ KUMAR KUNWAR,VIPIN KUMAR ,AMAN KUKREJA JAMIA HAMDARD, NEW DELHI 1 A NEW VISION FOR HUMAN RESOURCES (AUTHOR-Kunwar Raj Kumar, Kumar Vipin and Kukreja Aman) MBA (Pharmaceutical Management) 1st Year, Faculty of Management Studies Jamia Hamdard University New Delhi Abstract Human resource management is a process of bringing people and organizations together so that the goals of each other are met and this editorial aims at providing information about emerging trends in Human Resource Management -its impact and significance. The main theme is to understand the organizational effectiveness from recent developments in human resource. HUMAN RESOURCE MANAGEMENT AN OVERVIEW If we see in practical situation the above definition its just one side of a coin which has limited HRM involvement but HRM today is a different story, it have changed the way we work, and also it helps an organization to survive in recessionary period. Managing and attracting the human resource in today’s time is very difficult task. The role of HR manager has changed a lot (Dancing differently on changing tunes of life) from being protector and screener to the role of Savior who acts as planner and change agent affecting bottom of the pyramid where it is blue collar workers & at the Top & Middle level executives. The trends in human resource industry are dynamic in nature which contributes towards to achievement of organization goals. Over the years, highly skilled and knowledge based jobs have increased while low skilled jobs are decreasing. This calls for Skill mapping through proper HRM initiative. Change is inevitable as said and that’s what Indian organizations are witnessing in management cultures, systems and working style. Alignment with global companies has forced Indian organization accept and incorporate change in every day life which makes role of HRM all more important. New trends of HR (A) International Human Resource Management (IHRM) 1. Ethnocentric approach 2. Polycentric approach 3. Geocentric approach. (B) Human Resource Outsourcing: It consists of three types: 1. Application Service Provider 2. Business Process Outsourcing 3. Total HR Outsourcing (C)Human Resource Information System (HRIS) has three types 1. Strategic HRIS 2. Transformational HRIS 3. Tactical HRIS (D) Use of SIX SIGMA in HR 2 THE ROLE OF HR IN ORGANIZATIONS • • • • Boosting Productivity Preparing the Organization for Change Building Employee Commitment and Morale Involvement in Determining and Implementing the Strategic Direction of the Organization HR IN THE 21ST CENTURY • • • • • • • • • • • • Becoming the employer of choice Winning the war for talent Contributing to the organization as a strategic business partner Cultivating leadership through e-learning and development Recognizing the workforce as a profit center Thinking globally while complying locally Incorporating flexibility and adaptability into the organization Embracing technology as the underlying facilitator The policies of many companies have become people centric Attracting and retaining of human resource has become difficult as loyalty factor is losing its shine, Human Resource Outsourcing is the new name in the industry to replace the redundant traditional HR department. With the increase of global job mobility, recruiting competent people is also Increasingly becoming difficult, especially in India. COMPETENCIES FOR 21ST CENTURY HR PROFESSIONALS • • • • • • • • • • • • Developing Effective Reward and Recognition Systems Creating and Becoming Transformational Leaders Engaging the Workforce in Continuous Change and Innovation Collaborating in Resolving of Strategic Problems Partnering with Community Groups and Business Organizations Encouraging Real Employee Involvement Coaching and Counseling Individuals and High Performance Teams Empowering and Facilitating Learning, Change, and Decision-making Creating the "Learning" Organization Designing Organizations, Processes, and Performance Systems Keeping Up-to-Date on Technological Advances in HR Applications Maintaining a Global Business Perspective 3 HR Managers today are focusing attention on the following a) Policies- HR policies based on trust, openness, equity and consensus. b) Motivation- Create conditions in which people are willing to work with zeal, initiative and enthusiasm; make people feel like winners. c) Relations- Fair treatment of people and prompt redress of grievances would pave the way for healthy work-place relations. d) Change agent- Prepare workers to accept technological changes by clarifying doubts. e) Quality Consciousness- Commitment to quality in all aspects of personnel administration will ensure success. HUMAN RESOURCE MANAGEMENT IN A CENTURY OF GLOBALIZATION (IHRM) APPROACHES TO MANAGING AND STAFFING SUBSIDIARIES 1. 2. Ethnocentric. The home country practice prevails with this approach. Headquarters from the home country makes key decisions, employees from the home country hold important jobs, and the subsidiaries follow the home country resource management practice. 3. Polycentric. Each subsidiary manages on a local basis. A local employee heads a subsidiary because headquarters’ managers are not considered to have adequate local knowledge. Subsidiaries usually develop human resource management practices locally. 4. Geocentric or global. The company that applies the global integrated business strategy manages and staffs employees on a global basis. For example, Electrolux (the vacuum cleaner company) has for many years attempted to recruit and develop a group of international managers from diverse countries. These people constitute a mobile base of managers who are used in a variety of facilities as the need arises. In the ethnocentric approach, the cultural values and business practices of the home country are predominant. Headquarters develops a managing and staffing approach and consistently applies it throughout the world. Companies following the ethnocentric approach assume the home country approach is best and that employees from other parts of the world can and should follow it. MAJOR FUNCTIONS OF INTERNATIONAL HUMAN RESOURCE MANAGEMENT RECRUITMENT AND SELECTION Recruitment and selection are the processes through which an organization takes in new members. Recruitment involves attracting a pool of qualified applicants for the positions available. Selection requires choosing from this pool the candidate whose qualifications most closely match the job requirements. In companies that function in a global environment we have to distinguish different types of employees. Traditionally, they are classified as one of the three types: 4 1. Parent country national. The employee’s nationality is the same as the organizations. 2. Host country national. The employee’s nationality is the same as the location of the subsidiary. 3. Third country national. The employee’s nationality is neither that of the organization nor that of the location of the subsidiary. DEVELOPMENT AND TRAINING The overall aim of the development function is to provide that adequately trained personnel in a company are capable to fulfill their goals, as well as to contribute to better performance and growth with their work Creation and transfer of international human resource development programs may be carried out in two ways: 1.Centralized 2.Decentralized With a centralized approach, training originates at the headquarters and corporate trainers travel to subsidiaries, often adapting to local situations. This fits the ethnocentric model. A geocentric approach is also centralized, but the training develops through input from both headquarters and subsidiaries staff. Trainers could be sent from various positions. In a decentralized approach, training is on a local basis, following a polycentric model. When training is decentralized, the cultural backgrounds of the trainers and trainees are usually similar. Local people develop training materials and techniques for use in their own area. PERFORMANCE EVALUATION In companies, the performance evaluation is most frequently carried out for administration or development intentions REMUNERATION AND BENEFITS Remuneration of employees has a key role in acquiring new employees and is important for employees as well as for the employers. Pay is the basic resource of living of the employees, while benefits cover better health care, the possibility of spending holidays in the company’s holiday facilities at a favorable price and also other advantages MANAGEMENT OF EXPATRIATES One of the most challenging tasks for any company operating internationally is to manage its expatriates. The statistics showing their efficiency on that matter are not encouraging. For example, the failure of U.S. expatriates (the percentage who return prematurely, without completing their assignment) is to be in the 20 – 40% range. In Japan, the failure rate is less than 5% for their expatriates. One of the reasons for the difference is that Japanese expatriates receive far more orientation and language instruction than U.S. expatriates do. 5 1. The reasons for expatriate failure In international companies, it is important to understand the reasons behind expatriates’ high failure rates so that preventive measures can be taken. Six factors account for most failures, although their relative importance varies by firm.These are: career blockage, culture shock, lack of cross-cultural training, an overemphasis on technical qualifications, a tendency to use international assignments as a way to get rid of problem employees, and family problems. 2. Cross-cultural adjustment Expatriates and their families need time to become familiar with their new environment and to become comfortable living there 3. Expatriate reentry After the expatriate completes his assignment and returns home, he must adjust in the same way as when going abroad.. The disorientation experienced by a returning expatriate is known as reverse culture shock. 4. Selection of expatriates To choose the best employee for the job, management should: Emphasize cultural sensivity as a selection criterion Establish a selection board of expatriates Required previous international experience Explore the possibility of hiring foreign-born employees who can serve as “expatriates” at a future date Screen candidates’ spouses and families 5. Expatriate training expatriates are more successful when their organizations train them to prepare for their life and work abroad. Lack of training is a major cause of expatriate failure. 6.Expatriate evaluation and remuneration The performance evaluation of expatriate managers is particularly difficult. The job a person does abroad can include much more than what he does at home. A manager often steps into the role of counselor, trainer, troubleshooter, or diplomat, in addition to his assigned job responsibilities. With the need for adapting to a new culture, a different way of doing business, and often a new language, many factors influence expatriate performance. An organization’s general policy influences expatriate remuneration. Three common approaches are: a home-based policy, a host-based policy and a region-based policy.With a home-based policy, emloyees’ remuneration follows the scale of their home countries. The host-based policy sets salaries at the level of the host country, with benefits usually tied to the home country. Finally, region determines the third approach. Remuneration for employees working outside their home countries reflects whether their relocation is within their home region or in another region. HUMAN RESOURCE MANAGEMENT OUTSOURCING The use of outside bussiness to perform necessary business activities and process in lieu of internal capabilities. Outsourcing basic human resource services can be the key to achieving a more influential and strategic role for the HR function. 6 Advantages of outsourcing Reducing costs: Key determinator in many outsourcing decisions, but should not to be considered in isolation from other costs/ benefits; Increasing effectiveness of HR delivery: Experienced outsourcing providers can often deal with HR processes more effectively. For example, recruitment may be undertaken more quickly, reducing employee turnover costs and speeding up the pace of growth; Providing greater expertise: External providers may offer greater levels of specialist knowledge or experience than affordably available in-house; Moving HR up the value chain: Outsourcing human resource administration can lead to a shift in HR focus towards policy and decision making; To aid organizational growth: Fast-growing organizations can lack the HR capacity to deliver business objectives, making HR outsourcing an attractive solution. HUMAN RESOURCE INFORMATION SYSTEMS With the changing world and constant new technology that is available, managers need to be aware of the technology that will increase effectiveness in their company. Human resource information systems (HRIS) have increasingly transformed since it was first introduced at General Electric in the 1950s. HRIS has gone from a basic process to convert manual information keeping systems into computerized systems, to the HRIS systems that are used today. Human resource professionals began to see the possibility of new applications for the computer. The idea was to integrate many of the different human resource functions. The result was the third generation of the computerized HRIS, a feature-rich, broad-based, self-contained HRIS. The third generation took systems far beyond being mere data repositories and created tools with which human resource professionals could do much more. Applications of HRIS The efficiency of HRIS, the systems are able to produce more effective and faster outcomes than can be done on paper. Some of the many applications of HRIS are\ Clerical applications, applicant search expenditures, risk management, training management, training experiences, financial planning, turnover analysis, succession planning, flexible-benefits administration, compliance with government regulations, attendance reporting and analysis, human resource planning, accident reporting and prevention and strategic planning. With the many different applications of HRIS, it is difficult to understand how the programs benefit companies without looking at companies that have already benefited from such programs. Human Resources Information Systems (HRIS) is an integration of HRM and Information Systems (IS). HRIS or Human resource Information system helps HR managers perform HR functions in a more effective and systematic way using technology. It is the system used to acquire, store, manipulate, analyze, retrieve, and distribute pertinent information regarding an organization's human resources. The HRIS system is usually a part of the organization's larger management information system (MIS) HRIS can be applied in the following areas of HRM • HR planning 7 • • • • • • • • • • • • • • • • Succession planning Work force planning Work force dynamics analysis Staffing Applicant recruitment and tracking Employee data base development Performance management Learning and development Compensation and benefits Pay roll Job evaluation Salary survey International compensation Benefits management Develop innovative Org. Structure Develop IT Barriers to the success of an HRIS: • Lack of management commitment • Satisfaction with the status quo • No or poorly done needs analysis • Failure to include key people • Failure to keep project team intact • Politics / hidden agendas • Failure to involve / consult significant groups • Lack of communication • Bad timing (time of year and duration SIX SIGMA IN HRM Six Sigma is a logical and methodical approach to achieving continuous improvements in areas critical to the success of any manufacturing or service-oriented business. This process improvement methodology was developed in the 1980s in Motorola's high-volume manufacturing environment. This has contributed to the creation of the general opinion that Six Sigma is only applicable to high-volume, manufacturing processes. Actually, Six Sigma is applicable to both manufacturing and service industries, and to both high- and low-volume production environments. The Six Sigma HR team was established, involving HR process owners, facilitator (Six Sigma Black Belt) and mentor (HR Director). Internal customers were identified as critical stakeholders and their participation was secured through their direct/indirect representation or through feedback communication. The analysis started with the development of HR process maps, which effectively revealed shortcomings in the processes with immediate remedies and benefits. Communication, resourcing, rewarding and development were selected as the first process. 8 Use of SIX SIGMA Improve Development and implementation of improvement solutions followed identification of vital input parameters that affect selected process measures of performance (MOPs). Monitoring of improvement actions is realized through implemented HR database. Vital process inputs and process results were monitored and correlation verified. The focus has gradually shifted from monitoring MOPs to measuring and controlling inputs that control MOPs and reporting MPOs Trends. . Control The key control objective is to sustain and get a continuous improvement process embedded into HR processes. A quarterly HR review report is developed and issued and presented by HR. It contained process analysis results (control charts, histograms, trends and other monitoring charts), conclusions, observations and improvement actions to be completed by the next review and a Six Sigma score chart. FINDINGS OF PAPER The Emerging trends could play a crucial role in • Selection of employees requires careful evaluation of the personal characteristics of the candidate and his/her spouse. • Training and development extends beyond information and orientation training to include sensitivity training and field experiences that will enable the manager to understand cultural differences better. Managers need to be protected from career development risks, re-entry problems and culture shock. • To balance the pros and cons of home country and host country evaluations, performance evaluations should combine the two sources of appraisal information. • Compensation systems should support the overall strategic intent of the organization but should be customized for local conditions. • Six- sigma uses rigorous analytical tools with leadership from the top and develops a method for sustainable improvement. • Human resource outsourcing is a new accession that makes a traditional HR department redundant in an organization. • Organizations are also required to work out a retention strategy for the existing skilled manpower by enabling culture organization 9 RECCOMENDATION • IHRM could be used to improve workforce skills and abilities in order to exploit environmental opportunities and neutralize threats. • Indulge in continuous quality improvement through TQM and HR contributions like training, development, counseling, etc with the use of SIX-SIGMA . • Outsourcing results into cost effective Human Resource activities and utilization of people with distinctive capabilities to create unsurpassed competence in an area. • HRIS is used to decentralize operations and rely on self-managed teams to deliver goods in difficult times e.g. Motorola is famous for short product development cycles. It has quickly commercialized ideas from its research labs. • Lay off and retrenchment of workers in a smooth way explaining facts to unions, workers and other affected groups. • The most important skills for 21st century HR managers are conceptual and interpersonal, rather than technical. CONCLUSION Human resource management (HRM) will be a key area of focus in 21ST century as companies and government organizations put in place strategies to cope with the economic crisis and recovery. The so called "war for talent" is on the backburner as the focus shifts to hiring freezes, benefits and compensation cost management, and workforce reductions in the hardest-hit segments. HRM technology solutions can help savvy human resources (HR) professionals strategically manage through the crisis and prepare as the climate shifts to the upside. Trends that we will follow in 21st include managing and developing talent, embracing HRM analytics, Web 2.0 adoption, and HR technology strategy. 10