For the smooth functioning of an organisation, services as well as assets that produce benefit are necessary; these resources act as a supply from which value is produced by that given organization. And it is the effective and efficient use as well as access to resources that shapes and determines not only the industry an organization will belong to but also the level of its success. According to McConnell, C., Brue, S. and Flynn, S. (2012), resources are defined as services or assets used to produce goods and services that meet human needs and wants. Resources are categorised into land, labour, entrepreneurship and capital and for the purpose of this report, emphasis will be on labour, which consists human effort provided in the creation of products and its rewards is wages. Regardless of the current technological advances that have shifted the world economy from the “industrial age” labour intensive means that from production to automation and the use of machines, human resources are still an integral part of an organization and the nerve centre of their core existence as well as their survival. The workforce of an organization, economy or business sector require efficient and effective management thus the need of human resource management, a professional discipline as well as business function that ensure the proper exploitation, acquisition, maintenance and management of an organization’s human resources. F. Holton III, E. and W. Trott Jr, J. (1996), illustrate that under human resource management, employees are seen as assets of the organization whose value is enhanced through development.
The important of Human Resources in an organization cannot be ignored and it includes a strong set of professionals with extensive human resource experience. They are meant to perform some ideal functions such as recruitment, selection, training the employees as well as carrying out their performance appraisals as and when required. One of the primary important roles played by them is the recruitment and selection of the right set of employees. They are also responsible for setting up the job description for any specific job post within an organization. In addition, they are also responsible for setting up any specific obligation of a given set of employees. Performance appraisal is yet another crucial factor for them as they are able to find out whether they are on the right track or not and if not then what changes they can make to overcome the lacking that are inherent within their organization.
Human resource management and strategy formulation involves setting of objectives and later translating those objectives into programs, policies and procedures as well as to ensure an effective and efficient work force (Ernst Kossek, E., A. Lobel, S. and Brown, J. 2005). This is achieved through the following;
- Meeting a moral imperative i.e. doing the right thing, here on top of ensuring the recruitment process, highlights the firm's objectives clearly, formal and informal mentoring programs out to be implemented to encourage network and support group areas as well as potential skill-building opportunities.
- Reduction of labour costs through transparent promotion opportunities as well effective employee remuneration. In addition, a conducive working environment do increase the number of employees the stay with the firm thus greatly reducing its potential expenses on recruitment and training.
- Reduction legal costs associated with lawsuits and grievances. This is achieved through stringent monitoring of the hiring, compensation and promotion process for compliance and equity as well as implementation of proper mechanisms for employees to communicate their grievances. Proper policies and procedures that ensure employee well-being prevent harassment and bullying at work are also necessary.
- Enhance organization reputation through these processes.
- Organization should have policies and programs that are responsive to the changing demography profile of employees working for them.
- Attract and retain a wider pool of talent for the wider benefit of the business organization.
- Encourage cultural change consistent with program and policy changes
- Ensure the effectiveness and efficiency of business strategies.
- Enable innovation and invention thus proper utilization of the diverse perspectives.
- Ensure proper and better services as well as marketing for a diverse customer base.
- Streamlined awareness and understanding of challenges thus efficient problem solving. This also results in improved job satisfaction and better performance of individuals.
Human resource processes
Recruitment and selection
Recruitment and selection refers to the process of attracting individuals on a timely basis, in sufficient number and with appropriate application to apply for jobs with an organization (L. Gusford, M. 2008). This process occurs in numerous forms like contingent labour, outsourcing, promotion as well as hiring of employees on a long-term basis. Human resource managers ought to carefully consider the above-mentioned means of acquiring labour in relation to the length of time the labour will be needed given the recruitment and selection process is costly and laying-off workers is tricky. Thus in cases where the vacancy is above entry level, it is better to promote an existing employee. This is not only cheaper but also an effective motivation and reward tool that ensure retention of existing employees. More to that, when employees see their counterparts being promoted, they become more aware of their own carrier opportunities. It is prudent that the recruitment and selection process is transparent in to prevent issues of nepotism from arising, where members hire close friends and relatives thus creating an informal organization with in the organization that can result into informal organizational culture and its associated ills. A transparent recruitment and selection process also ensure that the organization acquires only competent staff thus increasing its efficiency and effectiveness in the end.
It is worth noting that influences on the recruitment and selection process are not limited internal aspects but are also influenced by the external factors of the organization’s operating environment, labour market conditions significantly determine the organization’s ability to attract and retain top-level employees (L. Gusford, M. 2008). These conditions further affect the compensation and benefits incentives in relation to the quality of applicants sought and their availability. In circumstances where they are scarce, the organization has to offer higher compensation and benefits in order to attract the high level of skills it is seeking. Although this might increase the organization competitive advantage in relation to labour, it increases its costs of production thus lowering the profit margin. Labour market conditions strongly affect non managerial and supervisory positions, and depending on the organization's industry, global considerations may affect its labour market for professional and technical applicants (L. Gusford, M. 2008).
The compensation scale is also an important factor. Payment structures in an organization are crucial as a component of effective compensation that assists in ensuring the level of pay for certain jobs remains competitive. This competition can occur both internally and externally with the presence of equity. Pay structures with proper designing allow for rewarding by management in regards to skill and performance development while the overall base pay remains under control (Martocchio, 2010).
Well as globalization and equal rights have created unprecedented economic opportunities, the have also deepened social inequality thus diversity in workplace (Ernst Kossek, E., A. Lobel, S. and Brown, J. 2005). Hence proper diversity management of human resource is now necessary. Given diverse hiring not only improves the organization’s image but also business. In order to attract a more diverse workforce human resource managers ensure they factor in the social/economic inequalities that the minorities face in order to put them at an equal footing with the majorities during the recruitment and selection process. Through human resource diversity management strategies like setting objective and then translating those objective into policies and procedures a positive relationship between emphasizing employee development and promotion as well as representation of the minorities is achieved (Ernst Kossek, E., A. Lobel, S. and Brown, J. 2005).
According to Brief, A. and Barsky, A. (2001), achieving proper balance of diversity is tricky, considering that, some schools of thought insist that women and minorities are using unfair tactics to demand workplace advantage, which they do not deserve on merit. Thus, some firms find it discomforting to deal with the minorities, plus the fear of fellow worker being perceived discriminative results in avoidance, which reduces the majority members' commitment to the diverse group and organization (Ernst Kossek, E., A. Lobel, S. and Brown, J. 2005). On the other hand, numerous studies show that employees have more favourable attitudes towards diversity initiatives when their work groups are more diverse.
Change management involves the application of a set of ideas, skills and strategies in order to implement change effectively (Hrweb.mit.edu 2013). Organizational changes take on numerous forms that include but are not limited to creation of new departments or implementation of new technologies. Change management can be either specific and particular or generic. Generic level of change management involves methods that are targeted at understanding the human response to change and creating effective strategies for engaging people to archive change while specific action involves establishing and communicating the reason for the change, building on-going relationships, communication to and training affected staff, redesigning the business process and sustaining groups to manage the project (Hrweb.mit.edu 2013). Change needs to be done under informed knowledge, involvement of all the affected stakeholders, exhaustive training and proper communication of the trade-offs and benefits of the change. By doing so, resistances are discussed thus neutralized if possible or alternatively the changes are improved to address those resistances. Thus the human resource management ought to be actively involved in the change exploiting their positions and relationships to act as a map for guiding the change and ensuring it is effectively and efficiently implemented.
Competitive advantage in relation to human resources is driven by various factors that include but are not limited to participatory work and increase in wages. A strong competitive advantage can give an organization an edge over the rest of the competitors available in the market. Work systems and employment models seen as supportive of high performance imply a mix of key practices like rigorous selection, better training systems to increase ability levels, more comprehensive incentives (such as employee bonuses and internal career ladders) to enhance motivation and participative structures (such as self-managing teams and quality circles) that improve opportunity to contribute(Appelbaum, E. 2000).After many years of domination by manufacturing studies in HRM and industrial relations (IR), more scholars are beginning to analyse the links between competitive strategy and human resource strategy in services. Human resource advantage occurswhere a firm builds and sustains competitive advantage through the quality of its human capital and organization process. Hence, in certain parts of manufacturing employers seek to complement high investment in physical capital with high investment in human capital in order to enhance total factor productivity.
Given human resource strategy is closely connected to competitive differentiation services, firms oriented to efficiency of standard solution to familiar problems in an efficient way while firms oriented to expertise promote an individual professional's ability to offer new, client-specific solutions to new, unusual problems (Doorewaard, H. and Meihuizen, H. 2000).In addition, competitive leadership is important aspects of competitive strategy, given firms differentiate in various ways depending on their cost or proximity parity (Porter, M. 1985). Although these differentiations do not necessarily lead to sustained competitive advantage, they enable major business outcomes like viability and sustained competitive advantage (Boxall, P. and Steeneveld, M. 1999). However, sustainable competitive advantage only occurs where there is a sustained source of superior profitability, despite the best efforts to imitate or outflank it (Barney, J. 1991).
Regardless of the significant debate on about particular mix of high-performance practices, one key argument running in human resource literature is that the relevant practices work much better when bundled together (Ichniowski, C., Shaw, K. and Prennushi, G. 1997). Productivity is best served by the systematic interactions among the practices thus high and consistent investment in human resource is necessary in order to reap greater benefits in the productivity and possibly the agility of the firm (Boxall, P. 2003).Expertise driven firms tend to hire highly specialized intelligent free spirits and retain through challenging, high-discretion work, while those oriented to efficiency have a more bureaucratic model of human resource management. In highly competitive markets, firms need to be able to offer the relevant bundle of service at adequate quality, but costs are always in competition. Thus service firms in mass markets need to pay the market-clearing wage for the labour they employ, but are unlikely to pay much more than this because labour costs constitute such a significant proportion of total costs (Batt, R. 2000).
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