At the turn of the 21st century, many organizations and corporations have adopted new working practices and policies that have drastically changed the work environment operations and employment relationships. These practices and policies largely deal with an organization’s plan in terms of the working hours, work-family reconciliation, location, part-time working, and workers’ rights among others.
According to Leach (2008), in order to accommodate the transformations, most employers introduce flexible practices in the work place. This is apparent in the way it allows them to access a more valuable workforce. This workforce attends in a better manner and very effective in the eventual planning process in the human resource department. It calls for a greater workforce where most individuals will not yearn to leave. The development of flexible workplace policies and practices are aimed at providing a platform on which an organization can adequately demonstrate its commitment to employee welfare, rights and responsibilities.
Organizational Practices, Policies and Their Impacts on Employees
Industrialized countries have legislated statutory regulations and laws that make it flexible for employees to adjust their working hours in relation to undertaking studies, further training and even retirement. Hegewisch (2009) argues that just like in the United Kingdom, other countries have adopted flexible working geared towards encouraging mothers to join the labor force in order to address labor shortages. In Germany and France, these laws encourage work sharing in the active labor market and are enacted to address the high rates of unemployment.
Dex and Scheibl (2002) claim that the flexible working arrangements are means of easing the pressures of juggling paid work and family responsibilities without compromising productivity. In the developed countries, apart from the Nordic countries and Holland, these statutes pertaining to flexible working conditions do not primarily look into gender equality, where taxation and benefit policies plus a comprehensive childcare plans have been put in place to encourage mothers to return to full-time basis working arrangements.
The work-family balance is recognized as the most sought-after target for flexible working policies and practices in most organizations. Statutes in developed countries however reflect a number of objectives; return to education and lifelong learning, sharing of work to encounter unemployment levels, gradual retirement plans and normalization of work-life scales across the life cycle.
Some statutes like the UK Right to Request are meant to address rights to be enjoyed in regard to certain specific activities, like parent’s responsibility towards their children and paid employment. Universally working schedules of time statutes that also provide identical rights to all the employees wishing to change the working hours without priority to a specific reason have been in place in several countries like France, Belgium, Netherlands, Finland and Germany. The right to reduced hours will depend on the employment of other unemployed individuals to help cover the lost hours.
Other innovations address the issues of lack of flexibility among disadvantaged groups of workers such as the disabled and mothers and offers alternative way to work arrangements. Other working flexible rights include a right to be able to reduce working hours, seen as an alternative to parental leave. The right of workers to work flexibly confers inalienable privileges to parents to get alternative employment opportunities with full benefits to cover any lost earnings due to reduced working hours. Employers are faced with unskilled manpower and skill gaps; the provision of flexible working practices becomes imperative for organizational operations. Leach (2008) states that the implementation of flexible working arrangements has become integral practice in many modern organizations, especially in multi-national operations with a wide market niche and employee base.
Flexible working practices in terms of time and space means that work is becoming less time and location dependent. To have a competitive edge in today’s business environment, organizations must continuously be innovative in their input (labor and capital) and output (goods and services) processes. Adoption of these practices and policies works well for employers, employees and clients, and what matters is the type of flexible working arrangements that is geared towards productivity. Working in a flexible working environment can lead to high productivity and performance, increased efficiency savings and employee retention. From the employee perspective, this can lead to better management of work-life balance and increased morale and motivation.
Human Resource Management versus Personnel Management
Human Resource Management deals purely with management of individuals in organizations. Human capital is the most important resource of any business and therefore, the proper management of this asset is of great importance to most organizations that aim to possess a competitive advantage in the business environment. Human Resource Management (HRM) is in charge of staff recruitment, staff training and development, performance appraisals, employee motivation, workplace safety and welfare administration, payroll and tax administration, risk management services, regulatory and government compliance. Meanwhile personnel management encompasses undertakings that are geared towards managing the workforce rather than the resources. As such, personnel management is more concerned with administrative tasks, immediate employee matters and mediating between employees and management. Human Resource Management (2013) states that HRM has brought about numerous beneficial effects that are cost effective to any organization. Among these functions are: staff recruitment and training, performance monitoring, human resource planning, and development of public relations strategies.
Staff Recruitment and Training
The Human Resource Team in any organization is responsible for hiring competent staff. They recruit talented people based on laid down criteria for particular jobs with specific job descriptions and mandate in the company. By training employees within the organization, the management ensure that the best and qualified members of staff are retained hence reducing the rate of employee turnover and redundancy.
HRM is in charge of the performance appraisals that are aimed at staff development and giving feedback for further improvement. This ensures that employees work according to the terms of employment and goes beyond the borders to make sure that company objectives are meet within stipulated time.
Human Resource Planning
Human Resource Management is responsible for developing the strategies that are aimed at forecasting the future needs of an organization. Effective Human Resource Planning is important to any organization that aims to retain the best employees, ensure that training programmes are implemented accordingly and organizational goals and objectives are met.
Development of Public Relations Strategies
Good public relations ensure good working relationship between an organization and other stakeholders to enable smooth business operations. HR is also involved in the preparation of business and marketing plans in cooperation with the relevant departments.
Finally, HR practice contributes to business performance in three ways:
“Best Practice” – a set of Human Resources practices are identified. This improves the overall business performance, when implemented.
Contingencies: a business performance is improved when the ‘golden middle’ in relations between several business strategies and Human Resource practices is achieved.
“Bundles” – specific bundles of HR practices can be identified that will generate higher performance in organizations; the most effective composition of these “bundles” will vary in different organizational contexts.
‘Universal model’ of HRM
The universal model of HRM has raised questions as to its effectiveness in achieving organizational goals and whether it should be adopted by every organization in managing people. Informal organizations have undertaken significant steps in implementing HR policies and successful organizations need not to have used ‘best practices’ HRM. However, there seem to be a growing consensus on the importance of the universal HRM. Syed and Jamal claim that researchers have established certain HR practices to have profound impacts on performance. For instance, comprehensive selection and staff training are directly linked to productivity and organizational performance. Syed and Jamal argue that the logic between the two universal Human Resource practices (i.e., comprehensive training, selective staffing, cross utilization and job rotation) and the firm’s performance will be naturally supported and appealing by the theoretical arguments from several disciplines.
Certain HRM practices are crucial in determining employee and organizational performance in any business sector. The identification and enactment of these Human Resource best practices will result in the effectiveness of the organization. According to Pfeffer (1998) there are six practices considered to be ‘universalistic HR practices’. They include; Recruitment, selection, Compensation, Participation, Internal labour market and Training.
Recruitment and Selection of Staff
Any organization that embarks on achieving its objectives must find, evaluate and assign individuals to work using valid selection tests. Effective selection ensures only competent staff is hired hence reducing organizational uncertainty and bringing a sense of elitism, increasing performance expectations and their importance to the organization. Poor recruitment practices can lead to poor performance by employees and consequently organizational survival in a competitive business environment. Best practices in employee recruitment ensures that the best and qualified staff are hired which will translate into better company performance and profitability.
An advanced compensation system for employees leads to competitive advantage for an organization by ensuring that it attracts and retains competent staff thus reducing staff turnover. Delaney and Huselid (1996) say that compensation based on excellence leads to increased employee performance.
This deals with an employee’s level of influence in an organization’s decision making process. This leads to increased performance and consequently improves morale and productivity of employees. Huselid argues that profit-sharing programs become effective when combined with employee involvement in management. Employees feel that the company belongs to them and hence will do anything within their powers to ensure its survival and more over, profitability.
Internal Labour Market
Pfeffer (1998) states that horizontal and vertical employee mobility in organizations improves performance directly through knowledge, experience and satisfaction; and indirectly through decrease in recruitment, selection and training costs. Internal career opportunities improve organizational performance and motivation (Delery & Doty 1996; Delaney & Huselid 1996).
Staff training influences performance through improvement of skills and abilities of employees and increasing employees’ satisfaction in their jobs and workplace. Syed and Jamal (2012) say that ‘Findings indicate that training influences organizational commitment, participant knowledge, and organizational based self-esteem’.
The National Context and Employee Management
Gerhart (2009) argues that multinational corporations must consider the differences in countries when making decisions to localize their human resource management (HRM) ‘strategies and cultures of organization that fits to the host country or in other words standardize Human Resource Management strategies and cultures of an organization across several countries. Hofstede and Johns indicate that differences between the countries and national cultures are crucial, so that management is culturally dependent.
Human resource management in different countries differ in terms of regulatory (worker participation in firm governance, layoff practices), institutional (labor union strengths and human resource practices) and cultural practices. Gerhart (2009) states that in order to have a better Human Resource Management in several countries, multinationals must properly understand the nature and scope of the differences in these countries.
They would then determine the extent to which the strategy and practice is constrained in specific areas and the extent to which multinational corporations have discretions in some areas. This will help the company to decide whether to localize the HRM strategies to the host country or to standardize a uniform strategic plan to all the countries.
Leat and El-kot (2007) claimed that HRM practices in any country are directly impacted by its culture, religion, history and institutional practices. HR practices that are affected by culture and institutional arrangements include job descriptions, recruitment and selection, training and development, compensation, employment security and performance appraisal. Global forces, international laws, information transfer and technology have led to convergence of HRM.
Institutional arrangements operating in national economies and societies are influential in maintaining dissimilar HRM policies in different countries. Institutional theory indicates that a country’s institutional environment, consisting of regulative, normative and cultural-cognitive aspects will influence the organizing principles and shape the behaviour of stakeholders in an economy and labor market.
HRM in a globalised world can be viewed in a multi-level model; macro context, the meso-organisational context and the micro-individual level. Legislations and market conditions influence employee rights, employment levels and adoption of HRM policies. Cultural dynamics, social practices, religious inclinations and demographics influence national institutions, organizational practices and employee behavior. Ali (2010) says that:
A particular challenge for HRM is posed by cultural factors and national values. For instance, managing employees from a variety of cultural, religious and ethnic backgrounds is central to global HRM. The policy domain of diversity management is therefore critical for global HRM. However, equality between the sexes can have different interpretations in different cultures. For instance, in MMCs, such as Pakistan and Bangladesh, work practices are influenced by cultural factors.
Psychological contract has become an important aspect of the work environment and human behavior and continues to play an important role in aiding define and comprehension of contemporary employment relationships. This concept deals with the relationships between employers and their employees in relation to mutual expectations of inputs and outcomes. Usually viewed from an employee’s perspective, it should be seen from the wider standpoint of both sides.
Archana and Kumar (2010) state that psychological contract offers a framework used in addressing ‘soft’ issues for the management of the performance; it primarily focuses on the people as opposed to technology; and then draws attention towards some paramount shifts in the overall relationship between individuals and organizations. It helps build the people dimension into thinking about organizational strategy. If people are bottom-line business drivers, their capabilities and needs should be fully integrated into the business process and planning.
This concept helps to build trust between employers and their employees because non-fulfillment of perceived obligations diminishes trust by compromising the values of integrity and benevolence which are important building blocks of trust. Enacting the psychological contract, positive development of employment relationships occurs which lead to organizational growth.
Effective HRM practices; staffing, compensation systems, staff training and recruitment among others will play a paramount role in the achievement of organizational goals and being effectively incorporated can lead to economic prosperity of businesses. Informal organizations have undertaken significant steps in implementing HR policies and successful organizations need not to have used ‘best practices’ HRM.
However, there seem to be a growing consensus on the importance of the universal HRM. Syed and Jamal claim that researchers have established that certain HR practices have profound impacts on performance. For instance, comprehensive selection and staff training are directly linked to productivity and organizational performance. Since management is culturally dependent Gerhart believes that in order to have a better Human Resource Management in several countries, multinationals must properly understand the nature and scope of the differences in these countries. Also, every company that aims to improve it’s work should enact the psychological contract wich helps to improve the relations with the employees thus enhance the organizational growth.