HR Trends and Challenges Essay
HR Trends and Challenges
Every job, organization and industry is going to have trends. These trends dictate the direction that the job, organization or industry is heading whether it is technology driven, psychologically driven, or financially driven. The variables that impact these trends can change very quickly, and are results of needs that are fulfilled by the trends. Some examples are personal computers, cell phones and many other technologies that allow organizations to conduct business faster and easier.
Many times a there are multiple trends that are on opposite sides of an idea, and an organization must decide which trend or trends are the correct trends for future success. When organizations face challenges of this nature at the speeds the current business environment changes, forces them to become knowledgeable of the industry trends very quickly. The organizations must then use this knowledge to make quick decisions on their future direction. The following is an exploration and analysis of the trends that human resource departments and managers are facing in today’s businesses, and why they are important for organizational success today and in the future.
Performance Management and Performance Appraisals
Good management is always analyzing the performance of the organization and its employees. There are several ways to do this, and depending on the organization and its objectives some methods are more effective than others. A complete performance management system is different from an annual performance appraisal system in several ways. In most cases a complete performance appraisal system is an ongoing evaluation. It uses several factors to determine the productivity of the employees of the organization. Management has to decide what the primary objectives of the organization are. Once this is decided they need to figure out how each department is contributing to the main objectives of the origination. These become sub-goals for the entire company and each department can concentrate on each goal. From here, each employee in that department can be responsible for a goal.
The managers in that department can divide the tasks to individual employees. Good performance management systems will allow the managers in each department to evaluate the performance of employee and to see the effectiveness of that employee to complete the required tasks and objectives. Managers then need to figure out a performance reward system which can award the employees for completing their primary objectives. Managers can choose to reward employees on several factors.
Competition, quality and content are some of the factors which rewards can be based on. The most important factor is to make sure that rewards are given when the primary objective is met. For example, it would not make since to reward employees on completion, when quality of the product is more important. A good performance management system is a dynamic system which is always changing and adapting to the current needs of the organization. An effective system can motivate employees and allow them to improve the quality of the work the put out.
Annual performance rewards concentrate more on the output of the organization as a whole. These rewards are geared more towards the profits and the output of the organizations. Annual performance rewards are important in an organization because they set goals and standards for the organization to achieve in the course of one year. In order to set effective annual performance rewards, management needs to consider its goals for the year. Effective performance rewards can break the year down into three quarts. Doing this makes it more tangible to achieve goals because they the time frame is reduced. Management can look at historical performance of the organization. For example, they can look at the amount of sale of the previous year to set goals for the upcoming year.
They can also look at the trends in the industry and project goals for the upcoming year. For example, if trends in a certain quarter are showing improved sales, management can set a higher goal to try and improve sales for the upcoming year or quarter. It is also very important not to set these goals too high as to not discourage the employees. Once these goals are set, performance rewards need to be determined. Management needs to decide what type of rewards can be given out. Monetary rewards, days off and stock options are some examples of rewards. In order to determine the best rewards, management needs to detriment the needs of the employees and find out what would be most beneficial to them. They also need to make sure that the rewards won’t be too costly to the organization.
Once the type of reward is determined, the payouts also need to be analyzed. Management can choose to pay out employees based on the amount of profits made within a certain quarter, or on the amount of sales. An effective payout method is one which again concentrates on the primary objective. For example if revenue is more important to an organization, then they may choose to reward employees based on total profits of the organization. Management also needs to decide how they are going to divide the profits. Profits can be divided evenly or based on employee position, or longevity in the organization. An effective annual performance rewards system is similar to a complete performance reward system because it will also reward employee for reaching pre-determined objectives, and it will also motivate individuals within the organization to improve the quality of work. It is important to keep in mind that just like a good complete performance management system, an effective annual performance appraisal systems is dynamic an is always changing and adapting to the needs of the organizations and its employees.
Managing turnover is one of the most recent human resources trends in today’s business environment and many organizations have found that managing their turnover effectively has helped with the organizations bottom line, which has resulted in many different success stories. Human resource departments in all organizations would consider managing turnover a very important aspect or the departments overall goals for the organizations they work for, but what does managing turnover really mean? Turnover in any organization is inevitable and the term managing turnover in its simplest form is to deal with the loss of the organization’s human capital and in most cases includes minimizing unwanted turnover in the organization.
All organizations will deal with turnover and some of this turnover will be the result of decisions by the organization to part ways with an employee. In this instance the role of the human resource department is to manage the dismissal of these employees and to do so while limiting liabilities. This is an important aspect of the human resources departments’ role in managing turnover, but this is something that has happened in organizations for a long time and is a role that has not and will not change significantly. The major trend in managing turnover falls in the arena of preventing unwanted turnover for an organization.
When an organization loses an employee that decides on his or her own accord to leave will result in the loss of many of the costs they incurred in hiring, training and employing the individual. In today’s incredibly competitive business environment organizations cannot afford to lose quality human capital or the resources spent on the employee they are losing. To make matters worse these costs must then be added to the cost of the resources required to hire and train a new employee and all these costs added together becomes very costly for organizations that do not manage turnover effectively.
When an organization loses an employee to unwanted turnover the losses that are incurred are a result of many different aspects of the turnover. First and foremost will be the loss of the individual that has decided to leave the organization. This individual produces in some way or form for the organization and when he or she is gone everything that the individual helps to produce will be lost, along with the expertise he or she has gained in his or her current position. The expertise that the individual has can also be part of a team expertise, and the loss of one part of the team can also slow down or stop production of the whole team as well, depending on the ability for others to step in and takeover for the individual leaving. As soon as the turnover is recognized the human resource department will hopefully begin the process of hiring a new employee to step in for the loss, but these processes are sometimes difficult and time consuming because it is important to find a quality candidate.
Hiring the wrong candidate could create future problems in managing turnover, which is why the hiring process is an important component in the overall picture of managing turnover, and finding the right person for the job the first time will hopefully result in fewer turnovers. Unfortunately, the losses do no end there because the organization must now train this newly hired employee to do what the employee that left was doing. The lack of expertise in the position, the organization, and the specific team usually means that production will suffer until the new employee gains the expertise and experience that is necessary to complete his or her job efficiently and effectively. This is a threat that all organizations must deal with, and the organizations that manage turnover effectively will be able to take these set backs in stride, while those that do not fall further behind, which is why the managing turnover trend has become so important to so many organizations.
Organizations know why managing turnover is so important, but what do human resource departments do to combat unwanted turnover? As stated in the paragraph above it all begins with the hiring process. Hiring qualified, intelligent, and hardworking individuals is a goal that most organizations have, but to achieve these goals the organization must find, recruit, and retain these employees. To find and recruit these gifted individuals the organization must market itself well and have something to differentiate their organization from all the others. Companies achieve this by having a good name, and offering benefits and perks that their competition does not.
Once these individuals are discovered and recruited the organization must then retain the services of these employees. An employee that goes to work each day happy will be less likely to leave the organization, so the human resource department must keep these employees happy to effectively manage his or her organizations turnover. Each individual will find different aspects of his or her working life to be important, but overall human resources should strive to make each employee feel safe and happy at work. Additionally, the organization should create challenging and interesting job positions but most of all employees want to be treated fairly and with respect. The trend of managing turnover is not easy to ascertain, but is a goal that most organizations should implement with the help of its human resources department.
Safety and Health Management
Along the lines of creating a process where the turnovers of employees are managed are the safety and health issues associated within an organization. Safety and health are of particular concern for all working individuals and the United States government saw it fit for laws to be enacted to protect these rights by establishing the Occupational Safety and Health Act of 1970 (Workers Rights Under the Occupational Safety and Health Act of 1970, n.d.). These rights are:
Get training from your employer as required by OSHA standards.
Request information from your employer about OSHA standards, worker injuries and illnesses, job hazards and workers’ rights.
Request action from your employer to correct hazards or violations.
File a complaint with OSHA if you believe that there are either violations of OSHA standards or serious workplace hazards.
Be involved in OSHA’s inspection of your workplace.
Find out results of an OSHA inspection. (Workers Rights, n.d.)
With these rights and applicable laws established, a worker is armed with the proper tools to establish a safe working place, furthering his or her job satisfaction to improve retention.
While discussing the aspects of health and safety in the workplace, it is important to not one of the most influential laws established in the United States concerning this topic, the Occupational Safety and Health Act of 1970. Duties of this act are stated as follows:
Each employer –
shall furnish to each of his employee employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees;
shall comply with occupational safety and health standards promulgated under this Act.
Each employee shall comply with occupational safety and health standards and all rules, regulations, and orders issued pursuant to this Act which are applicable to his own actions and conduct. (OSH act of 1970, January 1, 2004)
We can see from this passage of the OSH act that specific laws will be applied to all private work practices to ensure the rights of the workers are protected, with respect to health and safety. It is in the best interest, then, for the organization to adhere to specific laws and regulations to keep a safe working environment for employees. The costs of litigation again show how employers will gain more from safe working environments and provide for healthy productive employees. The trend shown here is for government to provide the necessary controls over private businesses to ensure health and safety practices are implemented and adhered to.
While the trend for employers is to provide for healthy and safe working environments, industrial accidents are products of unsafe behavior and not unsafe working conditions (Noe, Hollenbeck, Gerhart, & Wright, 2004). The culture of an organization’s safety consciousness is still a concern which human resources needs to address. The need to address the safety culture of an organization is paramount in establishing a healthy safety record for a company. Safety records can be used as bargaining tools for companies vying for contracts within other organizations. This incentive for an organization can produce a culture that provides for individual employees in a long-term basis, promoting a culture that is safety conscious.
Long-term job exposure in a tight-knit organization promotes a culture that is conducive to safety (as discussed in Dunn, 2001). But human resources provide the spearhead group that initiates the programs to promote the health and safety of an organization’s personnel. With programs such as mandatory safety training and different qualification requirements, a company can show how determined it is to foster safety and health within the workplace. Incentives such as safety awards, safety bingo, and safety presentation awards can reinforce the culture established within an organization (Noe, Hollenbeck, Gerhart, & Wright, 2004).
Healthiness of employees encourages a productive workforce. We have already discussed the controls of government within the private business. Next we discuss the costs of safety and health of employees to an organization. Indeed, “addressing safety and health issues in the workplace saves the employer money and adds value to the business (Kautz, 2007).” Estimates of around $170 million of expenditures by businesses arising from occupational injuries (as discussed in Kautz, 2007) are costing employers more than profits. Employees who work for organizations that are conscientious about safety and health of its employees enjoy less stress, less impact on family from impact of injuries, and less impact on their incomes due to injury (Kautz, 2007).
Therefore, indirect costs added by improved health and safety can revolve around the programs implemented by companies. Such indirect costs include: increased productivity, higher quality products, increased morale, better labor/management relations, reduced turnover, and better use of human resources (Kautz, 2007). Employers need to see intangibles such as these presented in order to fully appreciate the costs associated with implementing safety programs and health benefits. Intangible items are key to running a business efficiently and effectively. The value added to businesses by continued concern for safety and health of everyone in the organization contributes to the welfare of not only the workers, but of the families and communities where the organization does its commerce.
Future Trends and Challenges
“The world has never been so interdependent. All trends point to cooperation as a fundamental, growing force in business” (Lewis 1991). The past ten years has seen a shift in the business world towards a more global economy. No longer are businesses confined to their home borders, they are expanding into other countries and continents. This shift has had a significant impact on human resources management. Globalization has fueled growth, cooperation between business and government, and created an abundance of new jobs. Companies looking for a competitive edge in the U.S. may open an office in Asia and leverage a cheaper work force to handle responsibilities such as development, manufacturing, or support. Because of this, human resources managers may find themselves staffing a project with members spread out across the globe. This presents a relatively new and challenging issue that must be tackled in order to successfully manage projects and requires managers to be more culturally aware.
_Challenges of Managing a Virtual Team_
Many organizations are also implementing schedules where their team may work remotely at home or even abroad. Profound systemic changes have been seen in the way companies are structured. The concepts of leadership and managing people gave undergone a radical rethink. “Cubicles, hierarchies and rigid organization structures of the past, have now given way to open work environment, flat structure with informality being a general rule and empowerment of individuals” (Shivakumar, 2007). Today work itself is centered around projects, which have virtual teams working on them. This work structure has led to a culture of flexi time, round the clock accessibility to the workplace. Also catching up fast is the trend of workstations at home, remote access, video-conferencing and reporting by exception (Shivakumar, 2007).
For effective human resources management to occur, managers must first establish lines of communication between the members. E-mail and faxes are great for communicating facts however, there lacks feelings behind the facts. They also do not allow for real-time communication. Conference calls and project chat rooms can help, but they also have their limitations. Videoconferencing is a significant improvement over non-visual electronic forms of communication. Still, it is a very expensive medium, and real-time interaction is available on only the most advanced and expensive systems.
Even with the best system, managers have to overcome the problem of time zone differences, cultural nuances, and finding a convenient time for people to conference (Gray 2003). By establishing primary and secondary windows of time for meetings, a human resources manager can begin to build trust between the members without the face-to-face meetings. Once trust and accountability have been established among employees, it will be able to build synergy and employees will be focused on achieving their goals.
_Challenges with Multiple Ethnic and Sociopolitical Backgrounds_
Human resources management also includes facing the challenge of managing teams with members from multiple ethnic and sociopolitical backgrounds. It is important for managers to do their homework and become familiar with the customs and habits of the host country they are going to be working in or the diversity within the team they are working with. Sensitive issues may cause conflict between team members working together on the project. It is the manager’s responsibility to become the mediator and resolve the issue between the conflicting members. Although this is easier said than done, the manager must keep the staff going in the right direction.
Over the past few years, human resources training software has gone through many changes. Current global trends and telecommuting requires training that can be accessible via any computer connected to the internet. The development and use of electronic learning is also seen as a major area of potential change as individuals both in and outside the workplace increasingly gain access to online education (Schramm 2007).
With electronic mail and interconnectivity of mail systems there is less regard for the geographic location of the employees. Training can also be conducted via teleconference or web- conference.
Other enhancements in technology include things such as online reviews, schedule management, and benefits enrollment. Many human resources related functions are done electronically through an organizations intranet.
Companies today are constantly striving towards enhancing the quality of work life and the personal life of its employees and this does not stop with the employee buts gets extended to his / her family as well (Shivakumar, 2007). Many organizations are adopting benefits such as on-site health clubs, aerobics and yoga classes, sports and cultural activities, employee get-togethers with families invited, day care centers and onsite weight-loss groups.
Other benefits are geared towards the family such as extended paid time off for new mothers, paid bonding time for fathers, additional paid time off monthly for parents to attend schools functions with their children, and flexible spending accounts for childcare and healthcare.
Additional benefits to create work and life balance help retain good employees. In addition, it increases productivity because workers are less stressed; they have increased morale, get sick less, and ultimately save organizations money. In the long run, organizations have to spend less money on hiring new employees and on things such as loss of time because of decreased productivity.
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