15 – HRM Effectiveness

Introduction

Several significant trends/issues influencing the employment relationship impact how businesses must manage their employees. Some of these trends are related to changes in the organization’s external environment, while others are related to how organisations respond to such changes. The word ‘business environment’ refers to the collection of circumstances, events, and forces surrounding and influencing it. How HRM is done has changed dramatically due to current developments. Technological influence, economic challenges, and worker diversity are all examples of contemporary HRM trends.

15.1 Technology’s Impact on Human Resources Management

Technological advancements can significantly impact an organization’s service markets, suppliers, distributors, competitors, customers, production processes, marketing methods, and competitive position in today’s competitive environment. Technological advancements can create new markets, lead to the proliferation of new and improved products, shift an industry’s relative cost position, and render old products and services obsolete. Technological innovations have the potential to produce new competitive advantages that outperform existing ones. As we all know, computers, lasers, robotics, satellite networks, fibre optics, biometrics, cloning, and other related technology breakthroughs have prepared the way for considerable operational improvements in an organisation. It demonstrates how HRM is evolving.

1. New abilities are required: As new technologies are developed and implemented, staff skills and knowledge must be updated quickly. This necessitates the ongoing modernization and upgrading of employee skill sets and the employment of employees with the necessary skills and certifications. As a result, the HR department is emphasising the continuing recruitment and training process more.
2. Downsizing: New technologies have regularly demolished many lower-level occupations, which is frustrating. Increased automation has resulted in lower personnel headcounts across the board. Many businesses have been forced to go slim due to the pressure to stay cost-effective. Extra fat has been trimmed at every managerial level. In recent years, the wave of merger and acquisition activity has often resulted in new, combined corporations mercilessly downsizing operations.
3. Collaborative Work: As technology advances, hierarchical distinctions are blurring, increasing collaboration between managers, technologists, and analysts on projects. Team-based incentive systems have also made it vital for all levels of staff to operate in close cooperation. E-HRM facilitates teamwork by delegating HR duties to appropriate individuals through networking.
4. Telecommuting: Rapid technological advancements have resulted in work transfer from the office to the home. Telecommuting has become the norm, with employees working from home, usually with computers, and sending letters, data, and completed work to the home office via phones and the Internet.

Revolutions in the Internet and Intranet

In recent years, interns and intranets have been employed in HR to handle services such as training, benefits administration, performance management, and outplacement. The cumulative influence of new technologies is so significant that organisations are modifying their HRM practices on a large scale.

To summarise a long argument, technology is redefining the face of HRM by changing the techniques for gathering employment data, speeding up data processing, and increasing internal and external communication. It’s also impacting how jobs are processed to improve operational efficiency. To reduce costs, increase productivity, and improve customer happiness, businesses should be cautious about introducing new technologies in stages, considering staff concerns. Global competition is forcing most companies to restructure, reengineer work processes, implement complete quality management, and incorporate flexibility into work schedules to be competitive and cost-effective.

15.2 Current Human Resource Management Issues

Human resource management (HRM) brings individuals and organisations together to achieve mutual goals. Nowadays, showing a decent financial or operating report is impossible unless your people connections are in order. Highly skilled and knowledge-based jobs have increased, whereas low-skilled jobs have decreased. This necessitates future skill mapping via effective HRM activities.

As a result of their worldwide alignment, Indian firms are seeing changes in their systems, management cultures, and philosophy. There is a requirement for multi-skilling. HRM’s role is getting increasingly crucial. The following are some of the current issues that are being observed:

1. Increasing the worth of an organization’s labour force as well as the business itself.
2. Manage talent inside your firm – try attracting and retaining talented, hardworking employees.
3. Globalization
4. IT
5. Management of the business
6. Information-workers
7. Info-management.

In addition to the concerns above, the following are also significant:

15.2.1 Critical Skills Shortage

Critical talent shortages are becoming a global phenomenon. While the problem is due mainly to an ageing population in affluent countries, it is primarily due to a lack of sufficient national effort in developing countries like India. Everything that is being done now could have been done a decade ago. As previously said, the skill shortage problem in industrialised countries is primarily due to the ageing population. For India, however, it is due to a lack of national-level planning and implementation. The government created the National Renewal Fund (NRF) specifically for this purpose, with a budgetary allocation and earnings from the disinvestment of PSU shares. NRF’s main goal was to make funds available to organisations on low-interest terms so that they could invest in skill renewal.

15.2.2 Change in Demographics

Another key aspect of HRM that requires attention is the process of demographic change. The problem in rich countries is ageing populations, while in developing countries like India, the situation is precisely the opposite. Our working population is growing at a pace of 1.09 percent per year. By 2015, we will have a larger population in the working age group (15-64 years), accounting for 66.7 per cent of the overall population, compared to 61.2 percent. As a result, we must systematically focus on human resource development, establishing skill requirements as needed. Skilled and knowledge-based jobs have increased, whereas low-skilled jobs have decreased. This necessitates future talent mapping in India through adequate HRM initiatives.

15.2.3 Job Mobility Around the World

Recruiting qualified workers is getting increasingly difficult as global job mobility increases. In India, the problem is more serious. As a result of building an enabling culture, businesses must devise a retention strategy for their existing talented workforce. Companies must combine a remuneration plan with an enabling work culture to recruit talent.

15.2.4 Management Philosophy and Culture, as well as Management Practices

Systems, management culture and ideas, and management practices are all changing in Indian organisations. Apart from economic need, such a transition process results from Indian organisations’ worldwide alignment. We now need a competitive advantage regarding ability and knowledge to keep up with the competition. Fortunately, multi-skill development is quite successful in India, even though it is not particularly successful in other nations and can even be counterproductive in some cases. This is due to its clear roots in our age-old social stratification theory. HRM’s importance has grown in recent years.

15.2.5 Quality Management Standard

The new ISO 9001 and ISO 9004 quality management standards of 2000 emphasised people-centric organisations. We’ll go over some of its characteristics briefly before delving into how it affects HR issues in a company.

Main Characteristics: The updated ISO 9000 standards place a greater emphasis on top management commitment and customer satisfaction, as well as on internal processes and the inclusion of continuous improvement principles.

The modifications to ISO 9001 and 9004 are based on best practices and quality management principles.

These are the guiding principles:

1. A customer-centric organisation
2. Participation of people 3. Leadership
3. Management style based on systems
4. Continual improvement
5. Taking a fact-based approach to decision-making
6. A supplier relationship that benefits both parties.

Among the features are the continuity and compatibility of the old and new versions of the standards. The Quality Management System, as defined by the updated ISO 9001, encompasses an organization’s actions that assure consumers that their needs are met.

15.2.6 Another pressing HR issue is the need to structure organisations by their capability profiles.

Attributes, some professional talents, or a combination of abilities, knowledge, and behaviours make up competencies. Competency models propose that the company’s business plan be integrated with selecting the best person for the job. To put it all together, you’ll need an integrated system of corporate values, vision, mission statement, goals/objectives, action plans, and support systems. A competency is the smallest unit of observable, quantifiable, and changing on-the-job behaviour. The consequences of one’s actions determine one’s behaviour.

Competencies are essential because past performance is the best predictor of future performance; good current performance is built on previous performance, and the more recent the effective behaviour, the better the fit to the job. The organisation must develop an integrated human resources process that considers an employee’s abilities and expertise and the behaviour required for success in any job. As a result, a capability profile is created. A combination of abilities, knowledge, and behaviour is referred to as capability. Once this profile is in place, we can use the behaviours for selection and recruitment, employee development, reward management, performance management, training, succession planning, and career development. Rewards don’t have to be monetary; they can be as basic as acknowledgement, paid time off, or a simple thank you.

Once everything is in place, we can truly empower our people, or make our organisation an enabling organisation, and the organisation will thrive.

15.2.7 Six-sigma Methodologies

To stay ahead of the competition in this uncertain world, businesses are experimenting with one method after another. From achieving overall quality through ‘Conformance to Standards,’ the focus has now changed to adding economic value and practical utility to both the organisation and the client. Realising Customers’ and organisations’ entitlement to value is now the determining factor in business relationships. It has now become a win-win situation for both parties. Customers have a right to expect to acquire high-quality products at a reasonable price, while businesses have a right to create at a profit. In today’s business environment, everyone strives for this kind of synergy. The words “rejection allowance” and “unavoidable rejection” (UR) are now disallowed. Six Sigma as a business process is now helping businesses to enhance their bottom line by developing and monitoring business activities so that wastes and resources are minimised while maintaining customer satisfaction. Total quality management (TQM) programmes are broader than the Six Sigma approach. While TQM focuses on discovering and resolving faults, Six Sigma recreates processes to ensure that defects are never introduced in the first place. It delivers maximum value to organisations in the shape of greater profits, and it provides maximum value to customers in the form of high-quality products and services at competitive prices.

Products with higher Sigma values are of higher quality, while those with lower Sigma values are of lesser quality. Products at the six-sigma level are almost defect-free, with only 3.4 Defects Per Million Opportunities (DPMO).

15.2.8 Creativity and Innovation

Product/services, processes, managerial styles, and even organisational structure are all examples of innovation. It could be a technical push, a demand-pull, or a mix of both. An organization’s research and development (R&D) activities are examples of such innovation. The primary motivation for any organisation to innovate is to stay ahead of the competition. This backward linkage promotes process-centred innovative changes; thus, it must be primarily consumer-focused. Whether it’s just-in-time (JIT) inventory, Supply Chain Management (SCM), Business Process Outsourcing (BPO), Flexible Manufacturing Systems (FMS), Product/Service customisation, strategic backwards or forward integration, synergy through mergers or acquisitions, alliances or collaboration, organisational re-engineering TQM or Six Sigma Practices, new work culture as a facilitator of organisational change, or any R&D initiative for value addition, which broadly encompasses In this competitive world, we need to map customer needs and link them with innovation initiatives. HR practices that are proactive allow innovation. Innovation will be hampered rather than facilitated in an organisation if proactive HR policies are not implemented. Proactive HR practises include, for example, creating a work environment that values creativity, inter-organizational collaboration rather than competition, cross-functional collaboration, productive meetings for innovative results, formal innovation programmes, and, finally, an organization’s openness to new ideas and perspectives. Fostering creativity necessitates a systematic approach. It must be comprehensive in scope, considering leadership, values, and culture. Contextual analysis aids in the formation of necessary innovation teams. The leaders facilitate the teams. Values allow for adopting principles that stimulate innovation, and culture, in turn, creates a level playing field.

It is vital to define creativity at this point because innovation and creativity are frequently used interchangeably in the workplace. “The ability or power to create, to bring into existence, to invest with a new form, to develop by imaginative skill, to manufacture or bring into existence anything new,” according to Webster’s Dictionary. As a result, creativity is the most vital skill. It is the ability of an organization’s workforce. Competitors can copy an organization’s strategies but not its employees’ innovative skills. To stimulate creativity, businesses must create an environment where employees feel comfortable coming up with “stupid” or “crazy” ideas. Creativity is frequently chastised in the workplace, as creative people take longer to prepare for action. They’re also more challenging to keep track of. As a result, organisations frequently regard them as huge time and money wasters, stifling their creative thinking. A review of the literature on creativity can help us capture creative tendencies in the following ways:

1. A creative process requires both imagination and analysis. It entails the generation, analysis, and evaluation of ideas.
2. Unlike what the classical school of thought has long held, creativity does not come from a subconscious process. It is a deliberate endeavour to produce new ideas in a controlled environment to assist an organisation in leapfrogging ahead of the competition. ‘Directed Creativity,’ according to Paul E. Plsek (1997), is a better term. It is the deliberate production of innovative ideas with the seriousness with which they will be implemented whenever they align with organisational needs. Lack of implementation of at least some ideas (those relevant to the goal) will stifle creativity.

The application of creative ideas is referred to as innovation. As a result, creativity is considered a subset of innovation. We use the terms interchangeably here because innovation is such a broad notion.

Competencies, on the other hand, are a collection of behaviours that include skills, knowledge, abilities, and personality traits. Competencies are quantifiable and evolve. According to Hamel and Prahalad (1990), business success is solely dependent on inventive creativity, knowledge resources, and expertise, which together form an organization’s critical potential or core competencies. Quinn (1992), Drucker (1992), Porter (1995), Waterman (1983), Peter (1988), Nonaka and Takeuchi (1955), and Senge (1990) are all proponents of core competencies. Because of their uniqueness, core skills are complex for competitors to copy. As a result, core competencies are crucial success determinants for any business. Despite broad disagreements concerning the components of core competencies and their relationship to employees’ knowledge, skills, abilities, and traits, proponents of the concept agree on how it is formed by combining the organization’s goals, structure, and culture. Employees’ knowledge and skill foundation are supplemented by innovation and creativity, which helps to enhance core capabilities. Directed creativity, the deliberate development of new ideas aligned with organisational needs, is more relevant in this regard.

Innovation, creativity, and skills facilitate organizational transformation. Its imperatives arise primarily from redefining corporate focus, restructuring, and customer orientation—all in the pursuit of competitive advantages.

15.2.9 Supply Chain Management, Business Process Outsourcing, and Human Resource Outsourcing

Supply Chain Management (SCM) is an integrated approach to outsourcing to maximise customer satisfaction while lowering costs. It saves money by lowering costs, reducing inventory, sharing essential demand forecasts with trading partners for mutual benefit, and so on. Even though the original goal of SCM was to combine warehouses and transportation for more effective distribution at lower costs, it has evolved into a strategic instrument for increasing market share and multiplying customer satisfaction over time. SCM is based on the efficient interaction and interdependence of planning, people, and processes, or the three Ps, which collectively reinforce production that satisfies customers, regardless of their geographic dispersion, while increasing market share and productivity. “Outsource everything that isn’t core,” Peter Drucker advises for today’s business. Thanks to the IT interface, SCM has evolved beyond its classic Logistics management approach to many new areas of business outsourcing, including HR activities. To be more exact, business process outsourcing (BPO) is a relatively recent concept and an extension of SCM Philosophy that revolutionises today’s management practises. Take British Telecom, for example. They have changed their strategies eight times in the last 18 months. Or, for that matter, a Deshi company like Reliance had exceeded DuPont and Dow in terms of per-employee profitability while maintaining an HR strategy that was more Eastern and traditional than contemporary. BPO and Human Resource Outsourcing (HRO) have different connotations in these extreme scenarios.

15.2.10 Learning helps to reinforce knowledge; as a result, it’s important to grasp what learning is before we define knowledge.

Learning is the process of gaining new skills or knowledge that leads to a change in behaviour. It can take place in various ways. However, the best approach for businesses to foster learning is through exposure to new experiences. Knowledge is the capacity to apply what you’ve learned to attain personal and organizational goals. As a result, knowledge management is the practice of systematically and actively managing and exploiting an organization’s collection of knowledge.

According to Chakraborty, any knowledge management project should be tested first in the context of available Guna dynamics (1987). It is not because he has contributed to the literature on knowledge management but because he was the first to advocate that knowledge and skills when backed up by values, provide better results. When recreated as a matrix (as shown below) in the light of Indian-psycho-philosophy, his classification of knowledge along three Gunas reveals that mere rajas without the essence of sattwa cannot make knowledge management and, therefore, skill enrichment programme successful in any organisation.

15.3 Human Emotional Intelligence for Effective Management

Although it hasn’t previously been thought of as a branch of cognitive research, it has recently been shown to aid rational decision-making. The most common explanations for emotion involve making judgments, having bodily reactions, or combining the two. Judgments (such as satisfaction from the consequence of hard labour) and physical responses (such as sweating from anxiety about a task or uneasiness) are made based on a person’s interactions or temperament.

Emotion is a pleasant or negative mental state that results from a combination of physiological and cognitive stimuli.

Emotion is not to be confused with mood; it is defined as sustained but not always directed emotion. Instead, emotion is frequently described as affective, short-lived, relatively intense, and interrupting the mental process (Grandey et al). It’s also possible to say that emotions are linked to how stimuli are represented. When a notion is associated with a pleasant feeling, it can elicit a different response than when associated with a negative emotion.

We’ve all heard of IQ (Intelligence Quotient), a test that assesses our mental abilities and is frequently used to predict school achievement. However, even though it may determine as much as 80% of a person’s life success, Emotional Intelligence or Emotional Quotient (EQ) is not as well known or understood. About 20% of a person’s personality is determined by their IQ.

The theory is that EI impacts success in many aspects of life, including performance and productivity. It establishes who excels in any given work and what constitutes exceptional leadership.

EI examines how a person handles himself and his relationships. Negative emotion or discomfort weakens mental capabilities and lowers EI. The amount of time people experience negative emotions at work is one of the most powerful predictors of discontent and the likelihood of quitting; also, dissonance or a lack of harmony in the workplace affects productivity and achievement.

15.3.1 Increasing Professional Effectiveness by Improving EI

Improving your Emotional Intelligence will help you be more effective in your career and have a more fulfilling personal life because it will:

1. Motivate you to do your best
2. Strengthen trust to build productive relationships
3. Build resilience to perform under pressure
4. Increase confidence and courage to make good decisions
5. Build strength to persevere through adversity
6. Clarify your vision to create the future.