hrm future trends

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Future Trends in HRM

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Page 1: Hrm Future Trends

Future Trends in HRM

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How is the environment changing?

• Society

• Technology

• Government

• Employers

• Employees

• Economy

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How is the environment changing?

• SocietyFrom To

Tolerant AssertiveModest expectation Rising expectationCollective IndividualisticLong term oriented Short term orientedLess educated Better educatedAware of duties Aware of rights too

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How is the environment changing?

• TechnologyFrom To

Labour intensive Labourless

Low cost High cost

Multi technology Specialized technology

Medium technology Complex technologyPiece-meal technology Convergent technology

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How is the environment changing?

• GovernmentFrom To

Policy of concentrated growth Balanced growth

Subsidy oriented Innovative business incentives

Entrepreneur Facilitator for entrepreneurs

Employee friendly Employer friendly

Centralized power Decentralized power

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How is the environment changing?

• EmployersFrom To

Domestic Business Global business

Profit oriented Efficiency orientedTraditional Management Professional Management

Less technical More technical

Less Mgt Qualification More Mgt Qualification

Employer by inheritance First gen employers

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How is the environment changing?

• EmployeesFrom To

Workers Knowledge workers

Blue collar White collar

Specialized skills Multi skills

Submissive Assertive

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How is the environment changing?

• EconomyFrom To

Closed economy Open economy

Sellers’ market Buyers’ marketDomestic business International business

Stable Unstable

Higher price Lower price

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HRM in 21st century• Demographic changes1.Pressure from religious and racial minorities

2. Women reservation and empowerment

3. Reservation to economically backwards from upper castes

4.Reservation is likely to be extended to private sectors too

Reasons

Shrinking no. of PSU’s and Govt jobs

Core sectors are going into private ownership

Concept of pvt mgt and public money

Increasing role of pvt companies in social development

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HRM in 21st century• Demographic changes5.Increasing educational qualifications of people at

entry level

6.Awareness of the common public

7. Ratio of white collars and blue collars getting reduced

Reasons

Increasing technical skills and automation

Increasing salary for workers

Redundancy of blue collar workers

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HRM in 21st century

Demographic changes8.No. of women employees rising

Last decade Female employee growth around 50% Male employee growth less than 20%ReasonsConcept of dual careerNew jobs are becoming more suitable to womenEqual opportunities and security for women in the workplaceRising expectations of self and childrenInflationThreat of divorce/actual divorceGrowth of service industry

9.Increasing feeling of sons of the soil

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HRM in 21st centuryChanging technology and automation

• Need for new skills to meet the new technology

Strategy-Have feeder education/training institutions run by company-University-industry interaction-Constant training to employees

+ve- Improves business efficiency-ve- Pressure on individuals to be up-to-

date

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HRM in 21st centuryChanging technology and automation

• Skills going redundant (e.g. typists)

Strategy-Retraining-VRS/Retrenchment-Outplacement

Problems envisaged- After heavy investment on technology and automation money for retraining, VRS, etc may be scarce- Creates personal, Psychological, financial and social problems

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HRM in 21st centuryChanging technology and automation

• Better working conditions to workers, e.g. AC, computers, better lighting and resultantly better Q.W.L

• Skills are upgraded, so employees are becoming suitable for better jobs in the company and elsewhere

• Makes the job challenging• Reduces the human interaction, so human elements will

get lesser importance• Breakdown of entire system/operations• Many tragedies like Bhopal and Chernobyl are possible,

which may bring the surrounding public under Workmen Compensation Act 1923

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HRM in 21st centuryLiberalization, Privatisation and Globalization

• Emergence of international HRMResults-International benchmarking and universalisation of HR practices

• International character of Trade Unions• High salary, global selection and training, international

standard of working conditions and slim work-force are the hallmarks of MNCs &JVs

• Influence of ILO and WTO in labour stds, e.g. their role in elimination of child labour

• Quality consciousness in international business a) Mgt seeks voluntary cooperation of employees b) Concentration on competition rather than confrontation with

workers and trade unions

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HRM in 21st centuryLiberalization, Privatisation and Globalization

• Inequality in wage and salary the gap is too high, it may lead to inequality in growth of society

• More VRS/retrenchment Unemployment, insecurity/security to existing employees

• Growth of services industryTrends will attract women employees, HR dept will be professionalized-ves: Encourages casual/temp/PT/child labour, leads to higher employee turnover

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HRM in 21st centuryLiberalization, Privatisation and Globalization

• T&D will be the central focus in LPG• Equilibrium in demand and supply of manpower

is possible even at international level• Multiple criteria will be followed in selection

rather than just one criterion• Leads to flat structure

Results: More responsibilities to individual managers-No promotional opportunities within, so frequent job changes-Emphasis on self-mgmt-Quick decisions and responses

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HRM in 21st centuryLiberalization, Privatisation and Globalization

• Changing employersEmployers will be leaders rather than managers. They will practise theory YParticipative approach rather than proprietary approachCare for employees’ personal life tooScrupulously fair in reward or punishmentShare with the employees the company’s fortunes/profitsOrganization will be more adaptable to individuals than vice-versaThe job of creativity and innovation will be left to the workers

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HRM in 21st centuryLiberalization, Privatisation and Globalization

• Changing Government PolicyStill more importance for HRD and related areas, e.g. separate ministries for HRD, Labour, Personnel and grievancesHRD will spread to Co-ops, NGOs, Agriculture & local bodiesNow HRD concept is being infused in Govt depts/ offices, e.g. in Universities, Boards, Semi-govt organizations,etc.Govt. may allow ‘hire and fire’ policy but it can be regulated by independent bodies like Central Vigilance Commission, Courts, Tribunals, etc.

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HRM in 21st centuryLiberalization, Privatisation and Globalization

• Changing Government PolicyDrastic changes in labour laws possible, especially in the case of child labour, women workers, minorities and environmentGovt. will encourage setting up of industries in rural and backward areasResults: Non-availability of workers & executives to work in such areasLack of urban facilitiesMismatch between urban executives and rural workersMore expenses to train rural workers

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HRM in 21st centuryLiberalization, Privatisation and Globalization

• Changing Government PolicyLaws on merger/takeover may still be relaxedResults: Frequent change of ownership, so uncertainty, anxiety and insecurity to employees- Cultural shock to managers and workers- Loss of employmentRole of local bodies- Influence in selection and IR- Earnest efforts for Industrial development in the area

* * *

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Implications for HR Managers

• Should provide unstinting support to the CEO & the employees

• Should act as a facilitator, change agent and counselor. Must be well trained, imaginative, innovative, up-to-date and an alert professional

• Must actively adopt the systems approach to have a broad view of things

• Future HR functions will be more complex than what exists today

• He must make use of advanced knowledge and skills of behavioural science

* * * * * * * * * * * * * * * * * * * * *

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Theory X • In this theory, management assumes employees are

inherently lazy and will avoid work if they can. They inherently dislike work. Because of this, workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each level. According to this theory, employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can. The Theory X manager tends to believe that everything must end in blaming someone. He or she thinks all prospective employees are only out for themselves. Usually these managers feel the sole purpose of the employee's interest in the job is money. They will blame the person first in most situations, without questioning whether it may be the system, policy, or lack of training that deserves the blame.

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Theory Y

• In this theory management assumes employees may be ambitious, self-motivated, anxious to accept greater responsibility, and exercise self-control, self-direction, autonomy and empowerment. It is believed that employees enjoy their mental and physical work duties. It is also believed that if given the chance employees have the desire to be creative and forward thinking in the workplace. There is a chance for greater productivity by giving employees the freedom to perform at the best of their abilities without being bogged down by rules.

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Theory Z• Theory Z is the name applied to the so-called

"Japanese Management" style popularized during the Asian economic boom of the 1980s. In contrast to Theory X, which stated that workers inherently dislike and avoid work and must be driven to it, and to Theory Y, which stated that work is natural and can be a source of satisfaction when aimed at higher order human psychological needs, Theory Z focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job. According to Dr. William Ouchi, its leading proponent, Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction.

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Theory Z cont.d

• Ironically, "Japanese Management" and Theory Z itself were based on Dr. W. Edwards Deming's famous "14 points". Deming, an American scholar whose management and motivation theories were rejected in the United States, went on to help lay the foundation of Japanese organizational development during their expansion in the world economy in the 1980s. Deming's theories are summarized in his two books, Out of the Crisis and The New Economics, in which he spells out his "System of Profound Knowledge". He was a frequent advisor to Japanese business and government leaders, and eventually became a revered counselor. Deming was awarded the Second Order of the Sacred Treasure by the former Emperor Hirohito, and American businesses ultimately tried unsuccessfully to use his "Japanese" approach to improve their competitive position