Human Resource Management in 21st

CenturyGROUP A9

Siby P DanielSubrahmanya RaoAnuradha Sultane

Supriya H GSuresh S

Swati Bansal

Topics to be covered

Introduction

Employees-Intellectual capital-Manage

strategically

Changes in world

A case - Managerial Misclassification

INTRODUCTION Human resource management consists of

Attraction

Retention

Motivating

Disciplining

Selection

Utilization

Rewarding

  MANAGEMENT  OF  INTELLECTUAL  CAPITAL

Shift in economic activityAgriculture manufacturing servicesCompanies compete based on human capital

rather than physical capital(hard assets)

Employees(people) are viewed as resources Active management positively contributes to

organizational success

Human resources similar to customers, financial resources, operating systems and technology Constituting main input into organization

 Change in employment contractingPrevious scenario Continuous employment contracting

Implicit employment

Employees worked continuously for a single employer

Received pension benefits after retirement

Mutual and reciprocal obligations In initial period employers gained an economic rent

employees were paid less than the value of their productivity

In later period employees gained an economic rent employees were paid more than the value of their productivity

Laying off & rehiring of employees  

New scenario

Employee quit rates rose markedly

Frequent job changing(even job hopping)

Employability

Employees were paid the value of their productivity at

any point in time

Reducing workforce to achieve long term, permanent

labor cost reductions.

Change

Implicit long term employment contracting ↓

Shorter term, commodity type labour contracting (through outsourcing)

   

Reasons for changes 

Global economic competition

Deregulation

Technological change

Increased product and labor market competition

De-Unionization

Previous scenario:

Strong unions and collective bargaining

Mainly in companies having monopoly

Work terms and conditions were on negotiated

basis

Present scenario:

Decline of private sector unionization & collectiv`e

bargaining

Fewer people joined unions

Companies moving operations offshore

Decrease in labor relations department

Increase in HR department

Bundling of HR management practices

Positive effect on financial performance

High Involvement

Low Involvement

ComparisonHigh Involvement  Low Involvement 

Job Security Present Absent

Employment Duration Long Term Short Term

Employment Procedure

Selective Hiring Outsourcing, Employment Contracting, Vendoring

Realisation of gains In Long term In short term

Organizational performance

Achieved by Investment in intellectual capital

Achieved by reduction in labour costs

High involvement HRM practices

Low involvement HRM practices

The proper balance between

Practices for Resolving Employee Disputes

“Conflict is an Enduring, ever- present characteristic of employment relationships”

(Colvin, 2004)

Employee related conflict in organizations is not affected by decline in unionism

 HRM Role -

Understand nature of such conflictEvolve practices to resolve conflict Measure effectiveness of such practices

Comparison of Unionized and Non Unionized Alternate Dispute resolution Systems

Unionized ADR Systems Non Unionized ADR Systems

Grievance steps.Speed of grievance SettlementScope of grievance related issues

Determined by both employees and employers

Determined solely by employer. Its’ One-sided’ and Unfair

Grievance Filling rates Higher Lower (approx 50% less)

Third Party Arbitration In most cases In very few cases

Eligibility to use grievance procedures

Only employees represented by unions

Scope is wider

Post Dispute Resolution Outcomes

Not considered Focus on Post Dispute Resolution Outcomes . 

Post Dispute Resolution Outcomes

Prior to Grievance Settlement Post Grievance Settlement

Measures Non Grievance Filers

Grievance Filers

Non Grievance Filers

Grievance Filers

Job performance ratings

Similar Similar Higher Significantly Lower

Promotion rate Similar Similar Higher Significantly  Lower

Work Attendance rate

Similar Similar Similar Slightly Lower

Job Turnover rate( 1-3 years)

Similar Similar Similar Significantly Higher

Comparison

Explanation of findingsRetaliation explanation

Consistent with Organization Punishment/Industrial  Revealed performance explanation

Consistent with Shock Theory of Unionism

 Inference

As Non union ADR systems are reactive in nature, their use is –

 Leading to Further deterioration of employment

relationship than resuscitation of such relationships Original purpose of adopting Dispute resolution Systems –

Not met 

Need for Proactive employment dispute identification, diagnosis and resolution

Post Dispute Resolution Outcomes

Post Dispute Resolution Outcomes

Implication

If Human resources are to be used for competitive advantage,

HRM in 21st Century will require

Deeper thought,

Theory development,

Empirical research and

Clinical insight than before

Case Study – Managerial MisclassificationCase-

In retail and restaurant industries, employees holding managerial job titles such as

Store Manager, Department Manager, Location Manager Etc’Perform Employee rather than Managerial work.But are Paid Annual salaries rather than the preferred hourly wages. Misclassification cases filed against employers argue-That these employees should receivehourly pays and also overtime pay for working

hours>8 as they are doing employee work  

Case- HR Perspective

Key Question

“Why Managerial Misclassification cases exploded?”

Answer lies in 3 parts 1>In start –up phase of an enterprise, mangers managing the few

locations and facilities predominantly do managerial work. 2> As businesses grow larger Strategic, Organizational, SCM

initiatives take decision making responsibility away from store level to higher levels. 

3>Compensation = Base salary + bonus Bonus = Budgeted Labour cost – Actual labour cost  Store managers have a clear incentive

To substitute their’ labour’ for hourly paid labour of their employees

Are Misclassification cases a result of different Strategic initiatives on part of companies?

Yes,As Companies have failed to address change in lower level

management jobs emanating from well-meaning and well-

founded strategic initiatives. Success of an enterprise lies inAbility of organization to Anticipate and deal with such cases

If HR executives had a seat at the business strategic table

ConclusionHR is a strategic business function that should be a business

partner in the same way as Finance Marketing and Operations are business partners in an enterprise.

As businesses compete on basis of their intellectual / human capital21st century is for HR functions and HR leaders to keep their eye on prize of strategic role in businesseswhile also performing necessary operational roles