Nature and Scope of People development
LEARNING OBJECTIVES:
1. To discuss the meaning and definition of the people development.
2. To understand scope of people development.
3. To discuss external and internal forces.
4. To know strategic role of people development.
INTRODUCTION :
People development refers to overall development of employees in an organization. Employees are assets of an organization. They need to be retained and maintained effectively. The main objective of people development is to develop employees in effective way to help to achieve the objectives. In early years there was not much emphasis on people development. This is a recent trend in human resource management. This is one area, which is growing and progressing very fast. Though the employee development is one of the functions of HR department but it needs careful attention by specialist in employee development.
Main focus on people development is on employees. Their needs ,their behavioral patterns ,their career path, their skills and competencies need to be addressed carefully. The nature and definition and scope is discussed below.
MEANING AND DEFINITION
People development as the name suggests is concerned with the people’s dimension in organizations. It is one of the important functions of human resource development. The major responsibility of this function is on HR department. The focus of this area is on overall development of an employee.
Let us first study an important aspect of people development. These are certain core points, which must find their place in any definition:
1. Organizations are not mere bricks, mortar, machineries or inventories. They are people. It is the people who staff and manage organizations
2. HRM involves the application of management function and principles. The functions and principles are applied to acquisitioning, developing, maintaining, and remunerating employees in organizations.
3. Decisions relating to employees must be integrated. Decisions on different aspects of employees must be consistent with other human resource (HR) decisions.
4. Decisions made must influence the effectiveness of an organization. Effectiveness of an organization must result in betterment of services to customers in the form of high quality products supplied at reasonable costs.
5. Human resources being considered as assets , they need to upgrade and develop personally as well as professionally.
Considering these as the guidelines we would be able to define people development:
People Development is concerned with the people dimension in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives.
So we can say that people development is a function which emphasizes on people in an organization which ensures acquiring right people, developing them in line with organizational objectives and maintaining them, i.e gaining commitment from them through management of their career and growth.
People development also has some objectives:
The main objective of people development is to gain commitment by employees by developing them and through effective management of their career. But we can also identify some other important objectives. These objectives are divided into :
1. Societal objectives
2. Organisational objectives
3. Functional objectives
4. Personal objectives
1. Societal Objectives: To be ethically and socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization. The failure of organizations to use their resources for the society’s benefit in ethical ways may lead to restrictions For example, the society may limit HR decisions through laws that enforce reservation in hiring and laws that address discrimination, safety or other such areas of societal concern.
2. Organizational Objectives: To recognize the role of people development in bringing about organizational effectiveness. It is only a means to assist the organization with its primary objectives.
3. Functional Objectives: To maintains the function’s contribution at a level appropriate to the organization’s needs. Resources are wasted when people development function is either more or less sophisticated to suit the organization’s demands.
4. Personal Objectives: To assists employees in achieving their personal goals as these goals enhance the individual’s contribution to the organization. Personal objectives of employees must be met if employees are to be maintained, developed, retained and motivated. Otherwise, employee performance and satisfaction may decline and employees may leave the organization.
Objectives of People Development
Scope of People development :
People development covers the areas like:
1. Training
2. Development
3. Motivation
4. Team building
5. Assertive behavior
6. Learning
7. Career Management
8. Managing performance
9. Competency and skill mapping.
10. Innovative practices in people development
SCOPE OF PEOPLE DEVELOPMENT
Let us study the overview of each of these elements:
1. Training: It is upgrading existing skills in line with organizational objectives. Training needs are different for different employees and assessing these needs, providing them training based on these needs and evaluating their performance based on their post training performance are important aspects in training function.
2. Development: It is concerned with overall development of employees i.e. personal as well as professional development.
3. Motivation: Employees need to be motivated for their development. They should feel the benefit of these activities. There are many theories, which help to motivate employees.
4. Assertive behavior: Assertive behavior is straight, honest behavior, which needs to be encouraged for their own development.
5. Team building: All employees need to work in teams. They should understand importance of team to work effectively. So team building activities are must for organizational effectiveness.
6. Learning: Learning is on going process. The employees should not only be trained with specific skills but also they must learn to execute these skills.
7. Career Management: Employees must be aware of their growth and career in an organization. They should be clear with their career path.
8. Managing Performance: Trained employees need to apply their skills in their work environment. Managing their performance so that they work effectively consistently is important.
9. Competency mapping and skill mapping: The competencies of individual employees need to be assessed and developed for effectiveness of an organization.
10. Innovative practices in people development: Innovative practices need to be incorporated based on changing demands of the environment.
ENVIRONMENTAL FORCES IN PEOPLE DEVELOPMENT:
People development is based on environmental forces. These forces are either external forces or internal forces.
EXTERNAL FORCES:
External forces include all the forces, which affect people development from outside the organization.
External forces include political-legal, economic, technological, and cultural factors, the influence of which on people development is considerable. Each of these external forces is examined in detail here.
Political – Legal Forces:
The political environment covers the impact of political institutions on the organization. In a democratic political setup (as opposed to a totalitarian system), there are three institutions, which together constitute the total political environment.
They are :- 1. The legislature
2. The executive
3. The judiciary.
The legislative, also called Parliament at the central level and Assembly at the state level, is the lawmaking body. The plethora of our acts, which are in force, are enacted by the legislature. The executive, popularly known as the government, is the law-implementing body. The legislature decides and the executive acts. Above these two is the judiciary, which has the role of a watchdog. The main function of the judiciary is to ensure that both the legislature and the executive work within the confines of the constitution and in the public interest.
The interface between political environment and labor takes place through an array of labor laws. As was pointed above. We have so many enactments relating to labor that we have earned the sobriquet of being the largest labor –legislated country in the world.
Some of these relate to terms and conditions of employment. Some others relate to working conditions. a few others over payment of wages, and others contain provisions relating to industrial disputes. Then there is the Constitution, which is the genesis of all acts. A few articles of the Constitution are worth mentioning here. Article 14 guarantees equality before the law. Article 15 prohibits discrimination on grounds of religion, race, caste, sex or place of birth. Article 16 guarantees equality of opportunity in matter of public employment. Article 23 prohibits forced labour. Article 24 prohibits employment of the children in the factory, mines or in other hazardous jobs. Article 38(d) guarantees equal pay for equal work both for men and women. Article 38(e) stipulates the health and strength of the workers, for both men and women. It pledges that the tender aged children are not abused and that citizens are not forced by economic of work, and maternity leave of women. Living wages for workers are guaranteed by Article 43 while Article 43 (a) provides for the participation of workers in the management of industries. Overriding all these provisions is the protective discrimination clause, which stipulates the need for reservation of jobs for weaker section of the society.
Broadly all people development activities are affected in one way or the other by them. To be specific, HR planning, recruitment and selection, placement, training and development, employee relations and separation are conditioned by Constitutional provisions. So this also is an important criterion in people development.
Economic forces:
Economic environment refers to all those who economic forces which have a bearing on the HR function. Growth strategy, industrial production, agriculture, population, national and per capita income, money and capital markets, suppliers, competitors, customers and industrial labor are the components of the economic environment.
Suppliers For the HR department: Suppliers are those who provide human resources to an organization. Employment exchanges, universities, colleges, training institutes, consulting firms, casual – labor contractors, competitors, and the like are the sources that supply human resources. The type of employees the organization receives depends on the suppliers.
Competitors: Competition plays a significant role in some of the HR functions and activities.
As the number of organizations competing for human resources increases, so does the importance of the staffing function and its appraisal and compensation activities.
Customers: Customers have their own influence on a company’s personnel functions. It needs no mention that customers want high – quality products at reasonable prices. So everybody in the organization must endeavor to offer products, which give satisfaction for the money customers pay.
Industrial Labor: Over the years, certain changes have taken place in industrial labor, particularly in the organized sector. They are: -1. Commitment to industry
2.Protective legislation
3.Status
4.Employment pattern
Labor is now committed to industrial setting, thus contributing to stabilizing the workforce. But the sad part of the picture is that though labor is committed to industry, it is not committed to work. This is the reason for the low productivity of our industrial labor. Protective legislation is another feature of our industrial labor. From time to time, the government has been enacting one legislation after another to protect the interests of workers. Thus, we have, as on date, 51central acts spread over 2030 pages, and 103 state laws covering roughly 2970 pages, adding up to a total of 5000 pages of labor laws.
The economic and social status of today’s workers has vastly improved. Industrial employment is no longer the undesirable alternative left for those driven out from their villages. Improved skill contents of the jobs, matching educational and training inputs and increased emoluments have made industrial employment the first attraction of young job seekers. Industrial employment is now not restricted only to the socially backward castes. Another feature noticed in industrial labor is the change that has come about in the employment pattern of labor. This is due to the changes in industrial activity, which has tremendously expanded and diversified and also undergone a technical transformation. In the process of Expansion and diversification, new avenues of industrial enterprise in engineering, chemicals, electronics, informatics and pharmaceuticals have assumed importance and have changed the composition of industrial employment.
Impact of Globalization : Our economy is gradually getting integrated with the global economy. Globalization has considerable influence on HR functions. Employee hiring, training, motivation, compensation and retaining are to be guided by the global perspective.As every advanced nation is increasingly becoming globalize, skills and cumulative learning of its workforce become its competitive assets.
Technological forces :
J. K.Galbraith defines technology as a systematic application of organized knowledge to practical tasks. How does technology affect the HR function? First, with the advent of technology, jobs tend to become more intellectual or upgraded. Second, the introduction of new technology dislocates workers unless they become well equipped to work on new machines. This makes it obligatory on the part of people development to train workers and to rehabilitate those who are displaced or cannot be trained. Third, for those employees who pick up and acquaint themselves with new technology, the job will be challenging and rewarding. Fourth, along with upgrading jobs, technology has its impact on human relation. Technology lays down the requirements for much of the human interaction in organizations. Fifth, jobholders will become highly professionals and knowledgeable. An organization which has adopted the latest technology is flush with scientists, MBA’s engineers, college graduates and highly skilled workers.
Cultural Forces:
Culture refers to the complex whole, which includes knowledge, belief, art, morals, laws customs and other capabilities and habits acquired by an individual as a member of a society. How does culture influence the HR function? In the first place, culture creates the type of people who become members of an organization. Culture trains people along particular lines, tending to put a personality stamp upon them. Thus, we have Indians, Japanese, American, Britisher, German and so on. It is not that all people are alike in a particular culture. There are sub-cultures within a culture. For, people have their own idiosyncrasies and are influenced by heredity, cultural experience, sub-cultural experiences, family experiences and unique personal experiences. Secondly, the attitude of workers towards the work is the result of their cultural background. Thirdly, time dimension, which influences HRM, has its roots in culture. Time orientation refers to people’s orientation- past, present or future. In some societies, people are oriented towards the past. In others, they tend to be more focused on the present. Still others are futuristic in their outlook Finally, work ethics, achievement needs and effort-reward expectations, which are significant inputs determining individual behavior, are the results of culture.
INTERNAL FORCES
In addition to the external forces, there are factors internal to the organization, which influence people development activities. Unlike the external forces, where people development activities have no control, internal factors are within its influence. Prominent internal forces are: -
1. Organizational culture
2. Change Management
3. Group Dynamics
4. Behavioral patterns of employees
5. Organizational ethics
1. Organizational Culture : Organizational culture is the product of all the organization’s features—its people, its successes, and its failures. Organizational Culture reflects the past and shapes the future. It is the job of HR specialists to adjust proactively to the culture of the organization. For example objectives can be achieved in several acceptable ways. This idea, called equifinality, means there are usually multiple paths to objectives. The key to success is picking the path that best fits the organization’s culture.
2. Change Management: The changing demands in external environment also affects internal environment. The internal environment can work effectively only if pay attention to changing demands. Adopting these changing demands and implementing these changes is a big task. To create a promising environment towards changes is an important task in people development.
3. Group Dynamics: Organization is made of people working in groups. Each group consists of different individuals with different group processes. Organization needs to concentrate on these group processes for organizational effectiveness.
4. Behavioral patterns of employees: Not all employees come from same cultural background, same thinking level, same attitudes, same personalities or same behavior. So it is important to pay attention these changing behavioral patterns of employees.
5. Organizational ethics:
Strategic People Development:
Strategic Management: Strategic management may be understood as the process of formulating, implementing, and evaluating business strategies to achieve organizational objectives. A more comprehensive definition of strategic management is: that set of managerial decisions and actions that determine the long-term performance of a corporation.
It includes environmental scanning, strategy formulation, strategy implementation and evaluation and control. The study of strategic management, therefore, emphasizes monitoring and evaluating environmental opportunities and threats in the light of a corporation strengths and weaknesses.
Environmental Scanning: Environment of an organization comprises external and internal factors. Environment needs to be scanned in order to determine trends and projections of factors that will affect fortunes of the organization. Scanning must focus on task environment. Scanning helps identify threats and opportunities prevailing in the environment. In formulating a strategy, a company seeks to take advantage of the opportunities while minimizing the threats.
Strategy Formulation Strategies are formulated at three levels;
1. Corporate level,
2. Business unit level, and
3. Functional level.
Corporate-level Strategy this is formulated by the top management of an organization made up of more than one line of business. In formulating corporate-level strategies, the company should decide where it wants to be in 10 or 15 years hence, in at least eight areas- market standing, innovation, productivity, physical and financial resources, profitability, employee performance and development, attitudes, and social responsibility.
Business-level Strategy: A business unit is an organizational subsystem that has a market, a set of competitors, and a goal distinct from those of the other subsystem in the group. A single company that operates within one industry is also considered a business unit.
Functional-level Strategy: Each business unit will consist of several department, such as manufacturing, sales, finance and HRD. Functional-level strategies identify the basic courses of action that each of the departments must pursue in order to help the business unit to attain its goal. In formulating functional level strategies, managers must be aware that the different functions are interrelated.
Strategy Implementation: Strategies formulated need to be implemented. Implementation of strategies is, often more difficult than their formulation. Implementing strategies requires such actions as altering sales territories, adding new department, closing facilities, hiring new employees, development strategies of employees, changing an organization’s pricing strategies, developing financial budgets, formulating new employee benefits, establishing cost-control procedure, changing advertising strategies, building new facilities, training new facilities, transferring managers among divisions, and building a better computer information system.
Strategy Evaluation : Basic activities involved in strategy evaluation are:
1. Establishing performance targets, standards and tolerance limits for the objectives, strategies and implementation plans.
2. Measuring the performance in relation to the targets at a given time. If outcomes are outside the limits, inform managers to take action.
3. Analyze deviations from acceptable tolerance limits.
4. Execute modifications where necessary and are feasible.
Role in Strategy Formulation strategy formulation is preceded by environmental scanning. Scanning helps identify threats opportunities prevailing in the external environment. HRM is of great help in locating opportunities and threats.
HRM is in a unique position to supply competitive intelligence that may be useful in strategy formulation. Details regarding advanced incentive plan being used by competitors, opinion- survey data from employees that elicit information about customer complaints, and information about pending legislation like labor laws or mandatory health insurance are some examples.
The strengths and weakness of a company’s human resources can have a determining effect on the viability of a company’s strategy options. Unique HR capabilities serve as a driving force in strategy formulation. A company may build its new strategy around a competitive advantage stemming from its human resource.
The well- known accounting and consulting firm, Arthur Anderson, developed unique HR capabilities in training. The firm’s Illinois training facility is so sophisticated that it provides the firm with a competitive advantage enabling it to provide fast and uniform in- house training.
Role in Strategy Implementation: HRM supplies the company with a competent and willing workforce, which is responsible for executing strategies. Maruti Udyog and Hindustan Motors are manufacturing cars, essentially using identical technology. The secret behind the meteoric rise of Maruti is its workforce.
People development supports strategy implementation in other ways, too. For example, human resource today is heavily involved in the execution of the company’s downsizing and restructuring strategies, through out placing employees, instituting performance- linked pay plans, reducing health- care costs and retraining employees. And, in an increasingly competitive global market place, instituting people development practices that build employee commitment can help improve an organization’s responsiveness.
A well- designed strategy can fail if sufficient attention is not paid to the people development dimension. HR problems that arise when executing strategies may be traced to one of the three causes: -
1. Failure to match individual goals and organizational goals.
2. Failure to match individuals aptitudes with implementation tasks
3. Inadequate top management support for implementation activities.
Strategy implementation poses a threat to many managers and employees in an organization. New power and status relationships are anticipated and realized. New formal and informal groups are formed whose values; beliefs and priorities may be unknown. Managers and employees may engage themselves in resistance behaviors as their roles, prerogatives and power in the organization change.
Guidelines which help ensure that human relationships facilitate but not disrupt strategy implementation include open communication, co- opting as many managers and employees in the strategic management process and matching managers with strategies through transfers, promotions, job enlargement and job enrichment.
KEY TERMS:
ASSIGNMENT:
Q.1) Define people development and objectives of people development.
Q.2) Explain scope of people development.
Q.3) Explain external forces influencing people development.
Q.4) Explain internal forces influencing people development.
Q.5) Explain strategic people development.
Q.6) Write short-notes on :
1. Role of Line Manager
2. Implications of people development.
3. Role of People development in strategy implementation.
MATCH THE PAIRS :
A B
1. Societal objectives descrimination
2. Organisational objectives organizational effectiveness
3. Functional objectives resource utilization
4. Personal objectives development
5. political enviornemnt judiciary,legislation,executive
6. external force technological factors
7. internal force group dynamics
8. Environmental scanning task environment
9. Strategy evaluation setting standards
10.
Select the best option :
1. People development is concerned about _________________ dimension.
( financial,developmental,cost effective,people,workers)
Regards,
Mrinal
From India, Pune
7LEARNING OBJECTIVES:
1. To discuss the meaning and definition of the people development.
2. To understand scope of people development.
3. To discuss external and internal forces.
4. To know strategic role of people development.
INTRODUCTION :
People development refers to overall development of employees in an organization. Employees are assets of an organization. They need to be retained and maintained effectively. The main objective of people development is to develop employees in effective way to help to achieve the objectives. In early years there was not much emphasis on people development. This is a recent trend in human resource management. This is one area, which is growing and progressing very fast. Though the employee development is one of the functions of HR department but it needs careful attention by specialist in employee development.
Main focus on people development is on employees. Their needs ,their behavioral patterns ,their career path, their skills and competencies need to be addressed carefully. The nature and definition and scope is discussed below.
MEANING AND DEFINITION
People development as the name suggests is concerned with the people’s dimension in organizations. It is one of the important functions of human resource development. The major responsibility of this function is on HR department. The focus of this area is on overall development of an employee.
Let us first study an important aspect of people development. These are certain core points, which must find their place in any definition:
1. Organizations are not mere bricks, mortar, machineries or inventories. They are people. It is the people who staff and manage organizations
2. HRM involves the application of management function and principles. The functions and principles are applied to acquisitioning, developing, maintaining, and remunerating employees in organizations.
3. Decisions relating to employees must be integrated. Decisions on different aspects of employees must be consistent with other human resource (HR) decisions.
4. Decisions made must influence the effectiveness of an organization. Effectiveness of an organization must result in betterment of services to customers in the form of high quality products supplied at reasonable costs.
5. Human resources being considered as assets , they need to upgrade and develop personally as well as professionally.
Considering these as the guidelines we would be able to define people development:
People Development is concerned with the people dimension in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives.
So we can say that people development is a function which emphasizes on people in an organization which ensures acquiring right people, developing them in line with organizational objectives and maintaining them, i.e gaining commitment from them through management of their career and growth.
People development also has some objectives:
The main objective of people development is to gain commitment by employees by developing them and through effective management of their career. But we can also identify some other important objectives. These objectives are divided into :
1. Societal objectives
2. Organisational objectives
3. Functional objectives
4. Personal objectives
1. Societal Objectives: To be ethically and socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization. The failure of organizations to use their resources for the society’s benefit in ethical ways may lead to restrictions For example, the society may limit HR decisions through laws that enforce reservation in hiring and laws that address discrimination, safety or other such areas of societal concern.
2. Organizational Objectives: To recognize the role of people development in bringing about organizational effectiveness. It is only a means to assist the organization with its primary objectives.
3. Functional Objectives: To maintains the function’s contribution at a level appropriate to the organization’s needs. Resources are wasted when people development function is either more or less sophisticated to suit the organization’s demands.
4. Personal Objectives: To assists employees in achieving their personal goals as these goals enhance the individual’s contribution to the organization. Personal objectives of employees must be met if employees are to be maintained, developed, retained and motivated. Otherwise, employee performance and satisfaction may decline and employees may leave the organization.
Objectives of People Development
Scope of People development :
People development covers the areas like:
1. Training
2. Development
3. Motivation
4. Team building
5. Assertive behavior
6. Learning
7. Career Management
8. Managing performance
9. Competency and skill mapping.
10. Innovative practices in people development
SCOPE OF PEOPLE DEVELOPMENT
Let us study the overview of each of these elements:
1. Training: It is upgrading existing skills in line with organizational objectives. Training needs are different for different employees and assessing these needs, providing them training based on these needs and evaluating their performance based on their post training performance are important aspects in training function.
2. Development: It is concerned with overall development of employees i.e. personal as well as professional development.
3. Motivation: Employees need to be motivated for their development. They should feel the benefit of these activities. There are many theories, which help to motivate employees.
4. Assertive behavior: Assertive behavior is straight, honest behavior, which needs to be encouraged for their own development.
5. Team building: All employees need to work in teams. They should understand importance of team to work effectively. So team building activities are must for organizational effectiveness.
6. Learning: Learning is on going process. The employees should not only be trained with specific skills but also they must learn to execute these skills.
7. Career Management: Employees must be aware of their growth and career in an organization. They should be clear with their career path.
8. Managing Performance: Trained employees need to apply their skills in their work environment. Managing their performance so that they work effectively consistently is important.
9. Competency mapping and skill mapping: The competencies of individual employees need to be assessed and developed for effectiveness of an organization.
10. Innovative practices in people development: Innovative practices need to be incorporated based on changing demands of the environment.
ENVIRONMENTAL FORCES IN PEOPLE DEVELOPMENT:
People development is based on environmental forces. These forces are either external forces or internal forces.
EXTERNAL FORCES:
External forces include all the forces, which affect people development from outside the organization.
External forces include political-legal, economic, technological, and cultural factors, the influence of which on people development is considerable. Each of these external forces is examined in detail here.
Political – Legal Forces:
The political environment covers the impact of political institutions on the organization. In a democratic political setup (as opposed to a totalitarian system), there are three institutions, which together constitute the total political environment.
They are :- 1. The legislature
2. The executive
3. The judiciary.
The legislative, also called Parliament at the central level and Assembly at the state level, is the lawmaking body. The plethora of our acts, which are in force, are enacted by the legislature. The executive, popularly known as the government, is the law-implementing body. The legislature decides and the executive acts. Above these two is the judiciary, which has the role of a watchdog. The main function of the judiciary is to ensure that both the legislature and the executive work within the confines of the constitution and in the public interest.
The interface between political environment and labor takes place through an array of labor laws. As was pointed above. We have so many enactments relating to labor that we have earned the sobriquet of being the largest labor –legislated country in the world.
Some of these relate to terms and conditions of employment. Some others relate to working conditions. a few others over payment of wages, and others contain provisions relating to industrial disputes. Then there is the Constitution, which is the genesis of all acts. A few articles of the Constitution are worth mentioning here. Article 14 guarantees equality before the law. Article 15 prohibits discrimination on grounds of religion, race, caste, sex or place of birth. Article 16 guarantees equality of opportunity in matter of public employment. Article 23 prohibits forced labour. Article 24 prohibits employment of the children in the factory, mines or in other hazardous jobs. Article 38(d) guarantees equal pay for equal work both for men and women. Article 38(e) stipulates the health and strength of the workers, for both men and women. It pledges that the tender aged children are not abused and that citizens are not forced by economic of work, and maternity leave of women. Living wages for workers are guaranteed by Article 43 while Article 43 (a) provides for the participation of workers in the management of industries. Overriding all these provisions is the protective discrimination clause, which stipulates the need for reservation of jobs for weaker section of the society.
Broadly all people development activities are affected in one way or the other by them. To be specific, HR planning, recruitment and selection, placement, training and development, employee relations and separation are conditioned by Constitutional provisions. So this also is an important criterion in people development.
Economic forces:
Economic environment refers to all those who economic forces which have a bearing on the HR function. Growth strategy, industrial production, agriculture, population, national and per capita income, money and capital markets, suppliers, competitors, customers and industrial labor are the components of the economic environment.
Suppliers For the HR department: Suppliers are those who provide human resources to an organization. Employment exchanges, universities, colleges, training institutes, consulting firms, casual – labor contractors, competitors, and the like are the sources that supply human resources. The type of employees the organization receives depends on the suppliers.
Competitors: Competition plays a significant role in some of the HR functions and activities.
As the number of organizations competing for human resources increases, so does the importance of the staffing function and its appraisal and compensation activities.
Customers: Customers have their own influence on a company’s personnel functions. It needs no mention that customers want high – quality products at reasonable prices. So everybody in the organization must endeavor to offer products, which give satisfaction for the money customers pay.
Industrial Labor: Over the years, certain changes have taken place in industrial labor, particularly in the organized sector. They are: -1. Commitment to industry
2.Protective legislation
3.Status
4.Employment pattern
Labor is now committed to industrial setting, thus contributing to stabilizing the workforce. But the sad part of the picture is that though labor is committed to industry, it is not committed to work. This is the reason for the low productivity of our industrial labor. Protective legislation is another feature of our industrial labor. From time to time, the government has been enacting one legislation after another to protect the interests of workers. Thus, we have, as on date, 51central acts spread over 2030 pages, and 103 state laws covering roughly 2970 pages, adding up to a total of 5000 pages of labor laws.
The economic and social status of today’s workers has vastly improved. Industrial employment is no longer the undesirable alternative left for those driven out from their villages. Improved skill contents of the jobs, matching educational and training inputs and increased emoluments have made industrial employment the first attraction of young job seekers. Industrial employment is now not restricted only to the socially backward castes. Another feature noticed in industrial labor is the change that has come about in the employment pattern of labor. This is due to the changes in industrial activity, which has tremendously expanded and diversified and also undergone a technical transformation. In the process of Expansion and diversification, new avenues of industrial enterprise in engineering, chemicals, electronics, informatics and pharmaceuticals have assumed importance and have changed the composition of industrial employment.
Impact of Globalization : Our economy is gradually getting integrated with the global economy. Globalization has considerable influence on HR functions. Employee hiring, training, motivation, compensation and retaining are to be guided by the global perspective.As every advanced nation is increasingly becoming globalize, skills and cumulative learning of its workforce become its competitive assets.
Technological forces :
J. K.Galbraith defines technology as a systematic application of organized knowledge to practical tasks. How does technology affect the HR function? First, with the advent of technology, jobs tend to become more intellectual or upgraded. Second, the introduction of new technology dislocates workers unless they become well equipped to work on new machines. This makes it obligatory on the part of people development to train workers and to rehabilitate those who are displaced or cannot be trained. Third, for those employees who pick up and acquaint themselves with new technology, the job will be challenging and rewarding. Fourth, along with upgrading jobs, technology has its impact on human relation. Technology lays down the requirements for much of the human interaction in organizations. Fifth, jobholders will become highly professionals and knowledgeable. An organization which has adopted the latest technology is flush with scientists, MBA’s engineers, college graduates and highly skilled workers.
Cultural Forces:
Culture refers to the complex whole, which includes knowledge, belief, art, morals, laws customs and other capabilities and habits acquired by an individual as a member of a society. How does culture influence the HR function? In the first place, culture creates the type of people who become members of an organization. Culture trains people along particular lines, tending to put a personality stamp upon them. Thus, we have Indians, Japanese, American, Britisher, German and so on. It is not that all people are alike in a particular culture. There are sub-cultures within a culture. For, people have their own idiosyncrasies and are influenced by heredity, cultural experience, sub-cultural experiences, family experiences and unique personal experiences. Secondly, the attitude of workers towards the work is the result of their cultural background. Thirdly, time dimension, which influences HRM, has its roots in culture. Time orientation refers to people’s orientation- past, present or future. In some societies, people are oriented towards the past. In others, they tend to be more focused on the present. Still others are futuristic in their outlook Finally, work ethics, achievement needs and effort-reward expectations, which are significant inputs determining individual behavior, are the results of culture.
INTERNAL FORCES
In addition to the external forces, there are factors internal to the organization, which influence people development activities. Unlike the external forces, where people development activities have no control, internal factors are within its influence. Prominent internal forces are: -
1. Organizational culture
2. Change Management
3. Group Dynamics
4. Behavioral patterns of employees
5. Organizational ethics
1. Organizational Culture : Organizational culture is the product of all the organization’s features—its people, its successes, and its failures. Organizational Culture reflects the past and shapes the future. It is the job of HR specialists to adjust proactively to the culture of the organization. For example objectives can be achieved in several acceptable ways. This idea, called equifinality, means there are usually multiple paths to objectives. The key to success is picking the path that best fits the organization’s culture.
2. Change Management: The changing demands in external environment also affects internal environment. The internal environment can work effectively only if pay attention to changing demands. Adopting these changing demands and implementing these changes is a big task. To create a promising environment towards changes is an important task in people development.
3. Group Dynamics: Organization is made of people working in groups. Each group consists of different individuals with different group processes. Organization needs to concentrate on these group processes for organizational effectiveness.
4. Behavioral patterns of employees: Not all employees come from same cultural background, same thinking level, same attitudes, same personalities or same behavior. So it is important to pay attention these changing behavioral patterns of employees.
5. Organizational ethics:
Strategic People Development:
Strategic Management: Strategic management may be understood as the process of formulating, implementing, and evaluating business strategies to achieve organizational objectives. A more comprehensive definition of strategic management is: that set of managerial decisions and actions that determine the long-term performance of a corporation.
It includes environmental scanning, strategy formulation, strategy implementation and evaluation and control. The study of strategic management, therefore, emphasizes monitoring and evaluating environmental opportunities and threats in the light of a corporation strengths and weaknesses.
Environmental Scanning: Environment of an organization comprises external and internal factors. Environment needs to be scanned in order to determine trends and projections of factors that will affect fortunes of the organization. Scanning must focus on task environment. Scanning helps identify threats and opportunities prevailing in the environment. In formulating a strategy, a company seeks to take advantage of the opportunities while minimizing the threats.
Strategy Formulation Strategies are formulated at three levels;
1. Corporate level,
2. Business unit level, and
3. Functional level.
Corporate-level Strategy this is formulated by the top management of an organization made up of more than one line of business. In formulating corporate-level strategies, the company should decide where it wants to be in 10 or 15 years hence, in at least eight areas- market standing, innovation, productivity, physical and financial resources, profitability, employee performance and development, attitudes, and social responsibility.
Business-level Strategy: A business unit is an organizational subsystem that has a market, a set of competitors, and a goal distinct from those of the other subsystem in the group. A single company that operates within one industry is also considered a business unit.
Functional-level Strategy: Each business unit will consist of several department, such as manufacturing, sales, finance and HRD. Functional-level strategies identify the basic courses of action that each of the departments must pursue in order to help the business unit to attain its goal. In formulating functional level strategies, managers must be aware that the different functions are interrelated.
Strategy Implementation: Strategies formulated need to be implemented. Implementation of strategies is, often more difficult than their formulation. Implementing strategies requires such actions as altering sales territories, adding new department, closing facilities, hiring new employees, development strategies of employees, changing an organization’s pricing strategies, developing financial budgets, formulating new employee benefits, establishing cost-control procedure, changing advertising strategies, building new facilities, training new facilities, transferring managers among divisions, and building a better computer information system.
Strategy Evaluation : Basic activities involved in strategy evaluation are:
1. Establishing performance targets, standards and tolerance limits for the objectives, strategies and implementation plans.
2. Measuring the performance in relation to the targets at a given time. If outcomes are outside the limits, inform managers to take action.
3. Analyze deviations from acceptable tolerance limits.
4. Execute modifications where necessary and are feasible.
Role in Strategy Formulation strategy formulation is preceded by environmental scanning. Scanning helps identify threats opportunities prevailing in the external environment. HRM is of great help in locating opportunities and threats.
HRM is in a unique position to supply competitive intelligence that may be useful in strategy formulation. Details regarding advanced incentive plan being used by competitors, opinion- survey data from employees that elicit information about customer complaints, and information about pending legislation like labor laws or mandatory health insurance are some examples.
The strengths and weakness of a company’s human resources can have a determining effect on the viability of a company’s strategy options. Unique HR capabilities serve as a driving force in strategy formulation. A company may build its new strategy around a competitive advantage stemming from its human resource.
The well- known accounting and consulting firm, Arthur Anderson, developed unique HR capabilities in training. The firm’s Illinois training facility is so sophisticated that it provides the firm with a competitive advantage enabling it to provide fast and uniform in- house training.
Role in Strategy Implementation: HRM supplies the company with a competent and willing workforce, which is responsible for executing strategies. Maruti Udyog and Hindustan Motors are manufacturing cars, essentially using identical technology. The secret behind the meteoric rise of Maruti is its workforce.
People development supports strategy implementation in other ways, too. For example, human resource today is heavily involved in the execution of the company’s downsizing and restructuring strategies, through out placing employees, instituting performance- linked pay plans, reducing health- care costs and retraining employees. And, in an increasingly competitive global market place, instituting people development practices that build employee commitment can help improve an organization’s responsiveness.
A well- designed strategy can fail if sufficient attention is not paid to the people development dimension. HR problems that arise when executing strategies may be traced to one of the three causes: -
1. Failure to match individual goals and organizational goals.
2. Failure to match individuals aptitudes with implementation tasks
3. Inadequate top management support for implementation activities.
Strategy implementation poses a threat to many managers and employees in an organization. New power and status relationships are anticipated and realized. New formal and informal groups are formed whose values; beliefs and priorities may be unknown. Managers and employees may engage themselves in resistance behaviors as their roles, prerogatives and power in the organization change.
Guidelines which help ensure that human relationships facilitate but not disrupt strategy implementation include open communication, co- opting as many managers and employees in the strategic management process and matching managers with strategies through transfers, promotions, job enlargement and job enrichment.
KEY TERMS:
ASSIGNMENT:
Q.1) Define people development and objectives of people development.
Q.2) Explain scope of people development.
Q.3) Explain external forces influencing people development.
Q.4) Explain internal forces influencing people development.
Q.5) Explain strategic people development.
Q.6) Write short-notes on :
1. Role of Line Manager
2. Implications of people development.
3. Role of People development in strategy implementation.
MATCH THE PAIRS :
A B
1. Societal objectives descrimination
2. Organisational objectives organizational effectiveness
3. Functional objectives resource utilization
4. Personal objectives development
5. political enviornemnt judiciary,legislation,executive
6. external force technological factors
7. internal force group dynamics
8. Environmental scanning task environment
9. Strategy evaluation setting standards
10.
Select the best option :
1. People development is concerned about _________________ dimension.
( financial,developmental,cost effective,people,workers)
Regards,
Mrinal
From India, Pune
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