Human Resource Management In Contemporary Organisations – An Analysis

Higher Education Provider

Discuss about the Human Resource Management in Contemporary Organisations.

Various distinct external phenomenal plays substantive roles in shaping human resource management (HRM) in contemporary organisations. These distinct environmental factors, depending on their magnitude, may have negative or positive impacts on the management policies, the underlying principles, and strategies of the organisation. This paper focuses on this inherent environmental aspect and –subsequently- their impacts on the human resource policies. An analogy with reference to Sydney University is employed to analyse how the discussed characters shapes organisations. The paper also critically discusses the responsibilities of the HRM in an organisation.

This chapter succinctly reviews the services, vision, and mission of Sidney University. University of Sydney is a higher education institution that delivers tertiary training to the students. The university principles are entrenched in fostering progressive thinking and improving the world through breaking the status quo. It is the first Australian University and today it boasts of manufacturing leaders that have contributed positively in transforming Australia and global community. Driven by freethinkers, pioneers and philanthropists, they were the first to admit female students.

The vision of Sydney University, in brief, speaks equality and inclusion. The vision is “Leading to improve the world around us.” The university also has a strategy, “To create place where best researchers and most promising students can realize their potential. The 2016-20 Sydney University strategy was drafted after wide consultation with students, staff, and key stakeholders. The strategy vests on the trajectory that was started 170 years ago with the aim of realizing excellence and public service. The mission lays emphasis on investing in research, being influential in national and global community. The strategy also aims at producing graduates that will be instrumental in transforming the world. In addition, the University seek to create an environment where students and staff can realize their individual opportunity.

Various distinct external phenomenal aspects encompass HRM. The first aspect is based on the legal, social, and the political milieu. In the event of conforming to the regulatory and legal, mandate in the HRM, political and social concerns such as promulgation, implementation of the Congress Act, tax reforms and executive orders (Jackson and Schuler 1995). Jackson and Schuler (1995) observe that the expansion of corporation always invite additional ordinance concern, for instance, such corporations are bound by the law to appropriate funds for training and development. In addition, assimilating external personnel and immigrant workers have an impact on the staffing decisions. Jackson and Schuler also notes that global corporation experience are always confronted with political and social realities such as civil wars and religious cultures that shape the context of HRM in those counties. Resource dependence theory and institutional theory emphasizes on how socio-political and legal obligations shapes HRM (Jackson and Schuler 1992).

External environmental factors presented in Jackson and Schuler HRM Model

The second external phenomenal aspect is the unionization. Lawler and Mohman (1987) agree that unionized employees have earned approximately 33% more wages than their non-union counterparts. Unions charge workers to be instrumental in demanding better working conditions, collective bargaining, secure health, and retirement benefits (Jackson and Schuler 1995). However, in the recent past, union activities have dramatically moved to the downward trajectory contingent on the emerging concerns like shift to service economy and international competition. In the contemporary outfit, unions playing substantive role in the management context such as firm location and design concerns, work-team design, team-focused pay plan hiring procedures and participatory roles in electing the board of directors (Jackson and Schuler 1995). As the outgrowth of globalisation blossoms, multinational enterprise (MNEs) and unions endorse the idea of the need to understand the divergent concept of collective bargaining and union-management relations operations.

The next phenomenal external factor is the labour-market conditions. Labour-market structure, unemployment trajectory, labour diversity features underpin the concept of the labour-market conditions. Surging unemployment levels indicates that there is excess supply of labour more than the businesses or firms can absorb. Research conducted in the United States implies that when the level of unemployment reduces, profits drop as the wages and cost rise. Consequently, these conditions underscore reduction in demand for labour Levine & Tyson 1990). However, rise in unemployment dramatically leads to decrease in cases of absenteeism and turnover rates (Kerr 1954). Besides, the cases of employee discontentment are seldom (Carsten & Spector 1987). In line with transaction cost theory, hiring schemes seem to vary the level of unemployment. According to Hanssens and Levien et al, when there is tight labour supply, firms employ intensive and expensive hiring methods (1983). Under tight labour supply, organisations also to improve wages and benefits as well as improved working conditions to retain and attract employees .Such aspects may have detrimental implications on the human resource practices. For instance, lower recruitment standards necessitate additional training (Jackson and Schuler 1995).

Still on the external aspects that influence HRM decisions, there are industry characteristics. Based on the scope of production, manufacturing organisations are different from service-oriented organisations. Since in the service sector both employee and the customer cooperate to harness service production and delivery process, they depict partial-employees who subject the HRM (Jackson and Schuler 1995). Concisely, sharp differences in the management of the manufacturing organisation and service-delivery organisation have substantive implications on the HRM systems such as hiring, training, selection, stress-management, and upholding a healthy organizational climate (Davis-Blake & Uzzi 1993). Industry characteristics such as national cultures may have a broad impact on HRM especially on the effectiveness reality.

Analysis of external factors affecting HRM in the University of Sydney

Finally, HRM decisions are affected by the national culture. Towers Perrin argues that the evolution of MNEs and the globalization of the national economies attributed to creating awareness of different systems of human resource management in different countries (1992). Since countries embrace different cultural values, it is paramount that the MNEs understand the local customs in which they operate. Such approach will enhance effective human resource management. Hofestede (1980) developed a framework that aids in comparing different cultures. The approach is based on four cultural dimensions: power distance, individualism, masculinity, and uncertainty avoidance. Generally, scholars have compared divergent HRMs in different countries agree that cultural norms is what underpin such differences. Organisational characteristic, according to Hofstede, may be more significant in determining the HRM than national culture (1991). Hofstede’s argument endorses the notion that some HRM approaches can be employed across the countries that are culturally dissimilar. 

In this part, we analyse how external aspects, using Jackson and Schuler model affects Sydney University. The first aspect is legal, social-political environment. As the population of students in the Sydney University increases, the management is compelled to hire more professors in order to contain the situation. With the rapid growth of technology, professors have to adopt to the underlying changes to perform their duties effectively. With increased level of plagiarism cases in learning institutions, professors, for instance have adopted employed software approaches to curb the menace in the university.

Unionization of professors has also affected service delivery in Sydney University. On April 2013, the National Tertiary Education Union (NTEU) led by Sydney staff Union organized a strike to trumpet for better working conditions and implementation of collective bargain agreement ( World Socialist Website 2013). Such strike undermines learning in the university. However, today the unionized staffs in the university are engaged in designing work plan with the management and are involved in selecting the board of directors in the university.

On the aspect of industry characteristic, it is worth noting that Sydney University is a service delivery oriented organisation. To realize effective management, students and staff have been involved in management process. Students also participate in performance appraisal to aid improvement of the services delivered.

National cultures have also shaped the operation and performance in the Sydney University. Driven with a culture that consistently demands excellence, Sydney University has drafted their visions and strategies that conform to the expectations of the society in manufacturing leaders that add value to the society. Furthermore, the performance in the university has been colossally driven and spawned by up surging competition in the education sector.

Human resource (HR) performs various significant functions in an organisation. The first function is planning. Human Resource planning is the formulation of strategies to meet the ultimate organisational human resource objective. The planning encompasses the forecasting the available number of employees and projecting the number of employees needed in future. However, human resource planning must conform to the business strategy. Business strategy is the activity that is undertaken to realize organisational objectives. To realize efficiency in organisation, HR must draft a strategy to forecast future demand and supply of employees. HR management need to monitor – consistently- the qualifications, the skills, and the knowledge needed to undertake a given duty.

Human resource management also performs the function of recruiting. Recruitment is the process of seeking qualified job applicant from which to pick the most suitable applicant to undertake the job. Recruitment may be internal or external depending on where the organisation decides to hire its staff. Internal recruitment involves choosing the applicant from the existing employees to undertake the job. The process is suitable if the organisation is substantially large enough. Internal recruitment is advantageous in that it is less costly to the organisation, and in addition, the selected employee is ostensibly familiar with the organisation. On the other hand, external recruitment entails selecting the suitable applicant from outside environment. This method employs various approaches, depending on the size of the organisation to hire the suitable candidate: media advertisement, university, colleges, and recruitment agencies.

The next responsibility of human resource management is remuneration. Remuneration involves financial settlement to the employees in the return of their duties. The entitlement may be in form of wage or salary. Wages are often settled weekly or hourly whereas salary is paid monthly. Employees should be paid fairly because their morale and the quality of the output implicitly depend on the remuneration. In most countries, the minimum wage paid to the employees is under regulation by national minimum wage. However, depending on the financial muscle of the organisation, some organisation also incurs on-cost (non-wage) benefit on employees. They include holiday leave, occupational safety, maternity leave study leave, sick leave, and superannuation. While employee’s performance is subject to many factors, adequate salary is important in motivating them.

Human resource management also performs orientation or induction process. This process entails familiarising the employee with the organisation and the nature of work that he is about to undertake ( Komoche 2001). It is during this process that the employee is exposed to the organisational history, objectives, career paths, training and policies. Induction process plays a vital role in curtailing anxiety that may be associated with performing the new job, building employee’s confidence in the job and creating safety awareness in the job.

Furthermore, human resource management aids in training and development of employees. Training and development is significant in improving the employee’s skills as well as improve their output. Training process is advancing the staff’s knowledge and skills perform their tasks effectively and efficiently ( Mondy 2014). On the other hand, development is the systematic method of grooming the staff to undertake more responsibilities that are aligned in the future through impacting them with better skills to acquire more experience in a specific field. Training process sharpens employees’ skills in long-term and in turn improving their performance. Training of employees is remains crucial in organisations today due to dramatic changes that come with technology. However much training of employees may be expensive, its importance is far-reaching benefits than cost. Training enhances developing an employee to carry out future tasks. Concisely, developing employee depends on organisational needs as well as the career stage of the employee.

In addition, human resource management performs recognition and reward programs. It entails acknowledging the employee when he has performed an impeccable and great job. It is done by giving out cash, merchandise, or travel allowance (Mondy 2014). The aim is to motivate and retain employees. Rewards may be intrinsic, that is, those that the employee derive from work itself or extrinsic-those that are gained from the outside job. At times, organisation may adopt a profit sharing approach to reward employees, for instance, performance payment or annual bonuses (Martin 2009). Reward approach should aim at motivating staff, cost-effective, relevant, transparent, and consistent. Most organisations use reward matrix approach to reward appropriately. Conversely, performance-focused rewards are detrimental among the employees such as increased competition and fall in cooperation.

Finally, human resource management is tasked with the performance management. Performance management aids in improving individual performance and organisational operation by evaluating the organisational performance target with the employee’s performance target. Performance objective are always drafted with the aim of pursuing overall objective in an organisation. It is designed scrutinize whether the right employees with the appropriate skills were selected to undertake the prescribed duty (Cadrey 2010). This act of managing employees’ performance is known as performance appraisal. Performance appraisal is critical in identifying the relevant skills that employees need to learn. It also helps in monitoring employee selection. Performance appraisal aids in conveying feedback from the organisation to the employees concerning their performance. Besides performance management is a blueprint in improving future performance. However, if the employees perform below the set targets, organisation may be compelled to change hiring process and introduce training process.

External environmental factors may have an impact on human resource management on various ways. For instance, change in technology. According to Palmer (1995), development in science and technology aids in establishing a suitable organisation structure. Technological changes have positively been embraced in Sydney University by both staff and the students. Professors; performance can be evaluated online. Professors can also issue assignments online. Human resource in Sidney University will need to hire employees that are comfortable with technological skills to be effective.

In addition, the action of the union has played significant role in improving the working conditions of the staff. Unions have solid impact on shaping the wages, compensation, and physical condition of the employees (Bingol 2006). Actions of organisations in terms of HRM are realized under union results. Unions, according to Bingol, limit management flexibility when implementing HR policies. Staff union in Sydney University has also been instrumental in advocating for improved working conditions of employees.

Furthermore, the action of potential competitors may also shapes the HR practices in an organisation. Employers are implicitly attracted to higher wages and if the rival firm gives a raise, it may work to the detriment of the company that maintains its wages (Cardrey 2010). HRM at Sydney University has adopted performance appraisal schemes to motivate their staff and retain those whose performance are robust. This is a way of improving its organisational output against its potential competitors.

Moreover, the general rules and regulations also have a significance impact on the HR policies. The organisations have to uphold the labour standards and labour Acts. Sidney University Human Resource policies, in need to enforce efficiency and quality performance, have also shaped by such regulations. Such regulations, however, poses a threat on human resource practices when there is need for flexibility within the organisation.

Conclusion

Indeed external environmental factors play substantive roles in influencing the human resource plans and objectives. Organisations should adopt strategies in addressing such realities. For, instance the organisation should engage employees in decision-making. The management should be sincere with the employees to instil trust within the organisation. The management is dynamic and the organisation should always ensure the employees have relevant skills to improve their performance.

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