A new paradigm shift in Human Resource Management
MNCs continue to evolve and persist with advancement in strategic change. Global corporations are in view of implications of coalesce of both hard and soft model of human resource management. It further entails that both HRM and strategic change management are interwoven in the context of internal and external environment. Organizations are more and more adopting the concept of freedom to change where employees are empowered, assigned responsibilities, provided guidelines and are given flexibility to make decisions.
More importantly emphasis is being given to training and development, ethical and moral values, collaboration, integration and cross-functional approach. In the recent era of advancement intangibles are given more importance as compare to tangible rewards and benefits. More often domestic culture is being preferred over global culture where different functional departments are entwined with IT infrastructure and technological systems. Furthermore government intervention has further enhanced the scope of job creation and organizations are espoused to
Introduction: Change management has brought evolution. MNCs and global corporations have transformed and adjusted business processes, operations, policies, rules and organizational structure. Human Resource Management has undergone major changes and adopted the market requirements. There exist lots of opportunities for the HR personnel to further enhance the productivity of the organization. A New paradigm shift in Human Resource Management:
Farquharson and Baum (2002) acknowledged that change management remains an imperative in the contemporary era and multifaceted organizations are developing strategies to gain competitive advantage and pursue with the dictum. The primary emphasis is given to downsizing, TQM philosophies, technical perspective and the implementation of diverse methods and procedures. Nevertheless these dimensions overlook perceptual, attitudinal and behavioral aspect of change within the organization hence primary stakeholders i. e. employees are disregarded and not given importance during such practices.
Moreover the role of HRM remains a dilemma in change management. The soft model of HRM states that employees must be regarded as valuable assets for the organization which results into commitment, proactive approach, and enhanced skills and outclass performance. The prominent importance is given to leadership, proper communication and motivation. The hard model of HRM considers employees as a source of economy and production hence more emphasis is given to rewards and appraisal system. HRM plays an important role in initiating structural change.
Both HRM and organizational change are interwoven where three factors play crucial role: • Outer context: It focuses on economical, political, legal, social, cultural and technological factors. • Inner context: It highlights the role of individual employees, technology being used, organizational structure, hierarchy, culture, outputs and leadership. • HRM context: The realm analyzes different rules and regulations, policies, management and outputs. MNCs and global corporations identify constraints and opportunities so that HRM can formulate the entire system in accordance with the environmental changes.
There exist an enormous gap between the theoretical and practical perspective of HRM and organizational change management. Pioneering in change management program: BAA (British airport authority) initiated a program by the name of “Freedom to manage” in which they focused on specific skills and brainpower requirements which can enhance customer satisfaction, reduce cost and build up efficiency and effectiveness among internal processes. The key objective stated that employees need to be empowered and they must have the ability to analyze opportunity and contribute at their utmost.
Employees were given major responsibility within their areas of business. The entire framework delivers guidelines and flexibility where managers can assign priorities among different assignments, tasks and projects. It emphasized on two wide dimensions: • HRM endowed with rewards in parallel with training and development where key focus was given to collaboration, integration and two-way communication. • To develop a psychological bond between employees and the organization where specific consideration were given to moral, ethical and emotional conducts.
The corporation developed a specific vision comprising of three important factors: • Process: It was stated that all the business processes need to be streamlined and value addition must be done within support services. RDMP (resource develop and motivate people) program was initiated and as a result individual employees developed proactive approach and started taking responsibilities. • Technology: An integrated system comprising of finance, purchase, marketing, human resource and administration was established along with IT and advanced database infrastructure among front-end facilities.
• People and Organization: The entire task force was provided with updated skills and the organization was transformed into a learning organization. The domestic culture is preferred over global culture. More importantly standardization of processes decreases personnel involvement therefore empowerment is given primary importance. In order to transform into a secure and trustworthy culture employment relationship and teamwork approach is being adopted by MNCs. Reid et al. , (2002) instigated that HRM has dynamically transformed workplace conducts.
Conventionally personnel management and Industrial relations are being considered as a part of HR managers where the skills are utilized at the potential. It is stated that HRM has contributed a lot towards business expansion and diversification. Recently government intervention for the purpose of jobs creation has further enhanced the role of HRM in organizations. More prominently HRM is playing an important role in differentiating between ownership and management. According to one research in U. S.
industries alone about 55% of the operating budget is allocated to workforce management. Furthermore there exist a high correlation between HRM and organizational gross profit. Whittaker (2003) examined that due to continuous evolution of change more and more line-managers are being assigned HR responsibilities. Furthermore both line-managers and HRM employees are operating in partnerships with each other. Buck et al. , (2003) stated that both internal and external disorders have made the organizations to re-think about environmental issues and adjust their strategies.
Two key aspects have been identified: • ‘Adaptational’ school of thought: A paradigm shift in which organizations adopt proactive approach. • ‘Selectional’ school of though: Organizations have to opt for a reactive approach in order to protect themselves from failure. However institutional change results into different consequences which can be negative as well as positive. On one side it is believed that strategic change results into negative impact on the organization and it results into transience of the business.
On the other hand strategic change is considered as a major risk which can result into alternative outcomes and more often improves the survival chances of the firm. Transitional economies provide an eminent paradigm which focuses on the concept of institutional change related to corporate governance and strategy formulation. Moreover employment policies are deeply embedded organizational strategies which results into resistance to change. More often it is perceived that unchanged strategies results into decrease in cost incurred through radical changes however it seems inappropriate in accordance with current environmental shift.