Big Data

Big data is being used in two ways. On one hand, recruiters are using analytics to predict what
kind of employees will do best in a job; say by finding the correlation between employee
productivity and academic performance. On the other hand, with big data producing so much
information, the onus is on HR to present all that information in a way that becomes
comprehensible and engaging, say by storytelling.

Career Development
Gone are the days when organisations could take employee loyalty for granted. Attitudes have
changed as people have become more career centric. They want jobs that not only compensate
them, but also help them grow professionally. HRM must either chalk out career development
paths for their employees or bear the brunt of losing them. The developments in learning
technology are further making it possible for HR Managers to dissolve the traditional training
programmes and make learning and talent development an inherent part of the work culture.

Social Media skills and Employer Branding

Following the lead of some of the best positioned organisations, companies today feel the need to
establish themselves as brands which are high in demand to work for. A 2013 research has found
out that this process is being led by the HRM function, which uses the social media to reach out
to people. The two-way communication that social media facilitates, is making it possible for
organisations to quantify the results of their branding activities in a much better manner.

Work-Life Balance
Last but definitely not the least, the rise of technology has made it possible for employees to
maintain better work-life balance. Learning programmes that can be conducted online, webinars
and virtual conferences as well as the possibility to work from remote locations are all making it
possible for people to balance their personal and professional lives according to their
preferences. It is however, upon HR Managers to use their acumen and design work roles in such
a way that employees perform to their best without feeling over-burdened.
Skilling your employees in the manner that is most relevant to their job also has a huge bearing
on their involvement and productivity. Thus, HRM must collaborate with the learning
department to ensure that the training and development programmes being delivered to
employees are in synchronization with the needs of the organisation.

The Annals of The "tefan cel Mare" University

of
Suceava. Fascicle of The Faculty of Economics and Public Administration
Vol. 9, No. 2(10), 2009

CURRENT TRENDS IN HRM

Assistant
Otilia ALBU
University tefan cel Mare, Suceava, Romania
otilia@seap.usv.ro
Assis
t
ant PhD. Student
Lucia MORO
AN
DNIL
University tef
an cel Mare, Suceava, Romania
luciad@seap.usv.ro
Abstract:
The goal of this article is to establish the importance of human resource management (HRM) and ho
w it
emerged, to provide some evidence of its context, to discuss its potential and future development. Many
specialists
underlined the fact that human resource requires more attention and careful management then any other
resource of
an organization.
The
role of the HR manager must parallel the needs of the changing organization. Successful organizations are
becoming more adaptable, resilient, quick to change directions, and customer
centered. Within this environment, the
HR professional must learn how to
manage effectively through planning, organizing, leading and controlling the
human resource and be knowledgeable of emerging trends in training and employee development.
Keywords
: management, human resource, personnel administration, talent management, sk
ills, knowledge,
international HRM, HRM trends, policies, motivation, relation, HR manager
JEL classification:
M12

INTRODUCTION
Human resource management is a process of bringing people and organizations
together so
that the goals of each other are met
. The role of HR manager is shifting from that of a protector and
screener to the role of a planner and change agent. Personnel directors are the new
corporate
heroes. The today focus in business is

personnel
. Nowadays it is not possible to show a good
f
inancial or operating report unless your personnel relations are in order. The major
purpose of
HRM is to increase and improve the productive contribution of personnel to the
organization in
more ethical, social, and administratively responsible way. This
purpose emerged from commonly
called industrial relations, personnel administration, industrial psychology and
personal
management. Research shows that its aim is to create a whole organizational culture
that binds
workers to the companys objectives with
full professional commitment, integration, and quality
work.
The 21st century brings with it enormous opportunities but also enormous pressure, if
the
companies will not improve the productivity of the people and treat them human
being which are
the vita
l objects of all the economic activities leading towards industrial development. Now
there is
worldwide consensus on human resource being one of the major means of increasing
efficiency,
productivity and prosperity of the firm.
Over the years, highly skill
ed and knowledge based jobs are increasing while low skilled
jobs are decreasing. This calls for future skill mapping through proper HRM
initiatives.
Organizations are also witnessing a change in systems, management cultures and
philosophy
due to the globa
l alignment of Indian organizations. There is a need for multi skill development.
Role of HRM is becoming all the more important.
With the increase in competition, locally or globally, organizations must become more
adaptable, resilient, agile, and custome
r
focused to succeed. And within this change in environment,

the HR professional has to evolve to become a strategic partner, an employee sponsor

or advocate,
and a change mentor within the organization. In order to succeed, HR must be a
business driven
fu
nction with a thorough understanding of the organizations big picture and be able to
influence
key decisions and policies. In general, the focus of todays HR Manager is on strategic
personnel
retention and talents development. HR professionals will be co
aches, counselors, mentors, and
succession planners to help motivate organizations members and their loyalty

DOWNSIZIN
In a business enterprise, downsizing is reducing the number of employees on the operating
payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a
permanent downscaling and a layoff intended to be a temporary downscaling in which
employees may later be rehired. Businesses use several techniques in downsizing, including
providing incentives to take early retirement and transfer to subsidiary companies, but the most
common technique is to simply terminate the employment of a certain number of people.
Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people.
Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect.

CAUSES

Employee downsizing has an adverse effect on laid-off workers.

Downsizing a company is never a pleasant task to carry out. Everyone in the company is affected
in some way when a company decides to downsize its number of employees. Aside from creating
unemployment for some, it also causes restructuring and a change of duties for others. Business
owners typically make the decision to downsize with much deliberation. Downsizing is typically
done in cases where the company is making significant changes to either increase company value
or eliminate excess costs.
Cost Reduction

One the primary reasons for employee downsizing is to reduce costs. Employee payroll counts as
a liability on the company balance sheet and, therefore, reduces the owners' equity. The retained
earnings of a company are affected by the amount it pays out in payroll, and removing this
obligation is one way to cut costs. Aside from payroll, employee benefits are also costly to
companies, as are the operating costs associated with overproduction.
Productivity

Companies sometimes downsize their employee base to increase productivity. This may seem
counterintuitive on the surface, but some instances exist where this would be advantageous. For
instance, if a company knows that it can increase the output of individual workers while
remaining constant with its productivity, this can be advantageous for cost reduction. However, a
company may also decide to downsize to increase productivity by replacing workers with
sophisticated equipment that can do the same job.
Value

Downsizing the number of employees a company has generally signals that some restructuring
and changes are underway. These changes generally take place for increasing profitability of the
company. If shareholders and other investors perceive that the company will be making changes
that increase its profitability, it will increase the value of company stock. This can result in more
investors coming on board or current investors increasing their shareholdings in the organization.
In either case, downsizing can increase the company's perceived value.
Outsourcing

Companies may overextend themselves in terms of the number and types of services they offer
from time to time. It may behoove company ownership to sharpen the focus of the company by
eliminating some of the products or services that it offers. In doing so, a decrease in the number
of employees may be necessary. Company officials may decide that outsourcing certain activities
will result in increased productivity and reduced costs as well.

EFFECTS
When a small business has more employees than it requires, managers may decide to downsize
the organization. This can be the result of increased efficiency or reduction in demand. While
downsizing affects everyone in the organization, it has the most significant effect on employees
who are dismissed and have to leave the company.
Severance Pay

Employees who lose their jobs because of downsizing may be entitled to receive severance pay.
Employees are entitled to receive severance pay if their contract of employment provides for it or
their employer has a policy or practice of paying severance pay. Businesses who employ more
than 100 people must give their employees 60 days written notice of a mass layoff or pay
compensation. Receiving a lump-sum payment at the end of their employment can be a positive
for employees as they can clear debts or build up their savings.
Alternative Employment

It may be upsetting for an employee to hear that he will lose his current job. However, it also
opens up other opportunities he may not otherwise have considered. Many businesses offer
departing employees help to find another job, known as outplacement support. An employee may
find a job that offers better terms and conditions than his previous role. Some departing
employees seize the opportunity to set up in business for themselves, using their severance pay to
fund their new venture.
Related Reading: Negative Management During Downsizing
Psychological Impact

When an employee is told that he is losing his job as part of a downsizing process, he may
become despondent. He may compare himself unfavorably to colleagues who will remain with
the company and lose confidence in his skills and abilities. Alternatively, an employee may
become angry at the company for making the decision to dismiss him. Over time, that anger can
turn to bitterness. To deal with the psychological effects of downsizing on departing employees,
many companies offer counseling support.
Financial Impact

Employees construct a lifestyle based on receiving a regular income. This includes taking on
debts and mortgages based on their ability to make monthly payments. Losing a job can be a
financial blow for the departing employee if he cannot find alternative employment quickly.
Severance pay and unemployment benefits may not cover his all of his expenses for more than a

few weeks. Even if he finds a job, it may pay a lower salary than his previous job. If this
happens, his lifestyle may have to change to accommodate his lower earnings.

INCENTIVES SCHEMES
HR: Employee motivational program designed to encourage commitment to
increasing productivity or in achieving some worthwhile objective such as reducing
the number of manhours lost due to accidents.
2.Marketing: Customer motivational program designed to encourage them to buy
more of the firm's products. Also called bonus scheme or incentive program.
Read more: http://www.businessdictionary.com/definition/incentivescheme.html#ixzz41A8nqWMB
PURPOSE

To improve business performance (e.g. productivity, sales or profits)

To focus employees efforts on key objectives such as customer service, quality and ontime delivery

To increase employee motivation by establishing a clear link between pay and

performance (at an individual or team level).

To support stakeholder ideals by allowing employees to share in the success of the

business

To encourage change within the organisation.

To create the desired workplace culture by, e.g. rewarding teamwork and good
attendance.

TYPES
BONUS PLANS -- A single payment made at the end of the performance period (typically a year) to reward
extraordinary effort or achievement. Although bonuses may or may not be not tied to a specific predefined
outcome, the employee does not know in advance how much she will earn if this outcome is achieved. As a result
bonuses have limited behavioral or motivational impact. Bonuses are often viewed by employees as gifts and it is
not uncommon for them to be paid around holiday season.
COMMISSION PLANS -- Normally associated with sales positions commissions are payouts that occur frequently
(usually monthly) to encourage and reward a small number of highly specific results (such as revenues gross margin
or units sold). Commission payments are typically based on a specific formula and apply to group of individuals in
the same or similar roles. Such plans tend to remain fairly consistent from one year to the next (with minor
adjustments as needed).

IINCENTIVE PLANS -- 1) A tangible or intangible reward that is designed to motivate a person or group to behave in
a certain way. 2) A single payment made at the end of the performance period (typically a year) to reward specific
measurable or observable achievements that have been defined in advance. Incentives differ from bonuses in that
incentives define BOTH what needs to be accomplished AND what the employee will receive in return for
accomplishing it. As a result incentives have greater behavioral and motivational impact.
PROFIT SHARING PLANS -- A single payment funded by a portion of the company's annual profit paid to an
individual or group at the end of the year.
STOCK OPTION PLANS -- Stock options are an employer's promise that the employee may buy at a future date a
set number of shares at the price set today.
PHANTOM STOCK PLANS -- Phantom stock is a promise to pay a bonus in the form of the equivalent of either the
value of company shares or the increase in that value over a period of time.
STOCK (or EQUITY) APPRECIATION PLANS (SARs)-- A stock appreciation plan is much like phantom stock, except it
provides the right to the monetary equivalent of the increase in the value of a specified number of shares over a
specified period of time.
GAINSHARING PLANS -- A plan that pays individuals or groups a share of expense savings attributable to the efforts
of that individual or group.
KEY CONTRIBUTOR PLANS -- Plans that are designed to retain and motivate a select group of key individuals who
are critical to the success of a particular project or the company as a whole.
SPIFFS -- A small, immediate bonus typically paid by a manufacturer or employer directly to a salesperson for
selling a specific product during a relatively short time period.
MULTI-YEAR INCENTIVE PLANS -- Plans that measure and pay for performance over a timeframe longer than a
single year. Sometimes referred to as Long-Term Incentives (LTI).
MERIT INCREASE PLANS -- Plans that determine the amount of a person's base salary increase based on other
people's (typically the manager's) perception of the value of an individual's performance.
360 DEGREE REVIEW PLANS -- Plans that determine the amount of a person's base salary increase based on the
perception of individuals at all levels (peers, subordinates, and managers) of the value of the individual's
performance.
PERFORMANCE MANAGEMENT PLANS -- Plans that determine the amount of a person's base salary increase based
on specific criteria that are defined in advance and communicated to the employee.
COMPETENCY-BASED PLANS -- Plans that determine the amount of a person's base salary increase based on the
acquisition of specific competencies (i.e., knowledge, skills or abilities).
TAX DEFERRED PLANS -- Plans that structure payouts in ways that minimize the short-term tax obligation of the
recipient by either deferring payout until a later date or placing the payout in tax deferred investment vehicles.
Why so many different plans. Can it possibly be that difficult to motivate people? It's kind of scary to think what might happen if
you pick the wrong type. The good news about these plans is that they work. And the bad news is that they work. Pick the wrong
one (or set it up poorly), and you may not get exactly what you bargained for. In upcoming entries, I will discuss when it is
appropriate to use each of these different types of plans.

Work in the 21st Century: The Changing Role of Human

Resources

Karen E. May
Terranova Consulting Group

There are an incredible number of pressures on today's organizations. To name a few:

environmental pressures such as increasing globalization, rapid technological change, and
tougher competition; organizational changes such as new organizational alliances, new structures
and hierarchies, new ways of assigning work, and a very high rate of change; changes in the
workforce, including employees' priorities, capabilities, and demographic characteristics. Within
these pressured organizations, there is a need for (and opportunity for) the human resource
function to play a critical role in helping organizations navigate through these transitions. In
order to play this role, however, HR will have to increase its real and perceived value.
The role of human resources has been evolving for some time. The shift from "personnel" to
"human resources," for example, was part of the movement to acknowledge the value of
employees as an organizational resource, and was an attempt to remove some of the stigma that
was coming to be associated with slow, bureaucratic personnel departments. This shift in label
was accompanied by a call for HR to become a strategic partner with the leaders of the businessto contribute to significant business decisions, advise on critical transitions, and develop the
value of the employees-in short, to have a seat at the table.
Dave Ulrich provides a clear path to the next generation of HR with HumanResource
Champions:The Next agenda for Adding Value and Delivering Results (1997). He describes a
multi-faceted approach to delivering HR services that meets the needs of both employees and
employers, and positions HR as a significant contributor to organizational success.
Ulrich presents his approach in terms of deliverables, or outcomes, for which HR should be
responsible: strategy execution, administrative efficiency, employee contribution, and capacity
for change. In the course of delivering in these four areas, he describes four corresponding roles
for HR to play within a business: a) as a strategic partner working to align HR and business
strategy, b) as an administrative expert working to improve organizational processes and deliver
basic HR services, c) as an employee champion, listening and responding to employees' needs,
and d) as a change agent managing change processes to increase the effectiveness of the
organization. One of unique things about Ulrich's approach is that it is includes all of the ways
that HR can deliver value to an organization, rather than shifting focus from one area to another.
Similarly, Johnson (1997) describes his experiences in executive search in which CEOs describe
the HR leaders they want to hire. They want people who will be successful business partners,
strategic thinkers, and people who will understand the pressures of running an effective business
in today's market. He reports that, when hiring a leader for the HR function, most CEOs ask for
someone who is, "not a typical HR person," and that most of the successful candidates describe
themselves that way. This trend reflects the common perception that HR "business-as-usual" is
not prepared to meet the challenges that today's businesses present.

Making the shift to a new HR role will raise unique issues for every HR group that attempts it,
but there are some common steps and activities that will increase the likelihood of success. Some
of these steps and activities are:

Strong HR leadership. As with any major change effort, a strong leader can develop a
clear vision, motivate others to share that vision, and help them work toward achieving it.
In order to change the role of HR in an organization, the HR leader will need to work
both within the HR group and with the organizational leaders to reshape everyone's
expectations of what HR can and will deliver. The success of the change will depend
upon HR's ability to meet the real needs of the organization and the credibility it
develops.

Acute future orientation. One of the ways that HR can provide value is to understand how
changing environmental, organizational, and workforce factors will likely influence the
business, anticipate the associated HR needs, and be prepared to deliver appropriate
solutions to meet those needs. By maintaining a focus on workplace trends, for instance,
HR can prepare to evaluate the impact that particular changes are likely to have on an
organization's people and processes, and be prepared to work with the business leaders to
decide how to respond-being ahead of the curve, not behind it. For example, one
movement that is likely to have significant impact on the way people are hired, managed,
and valued is that of intellectual capital. A "new role" HR department is one that has
learned about intellectual capital and its implications, evaluated the impact on current
practice, and developed ideas and recommendations for changing HR practice and other
business processes.

Flexibility and creativity. An HR group that is successful in the future will likely be one
that is responsive to the changing needs of its client organization. Responsiveness in the
changing world of work will require being flexible-as the organizations change, so will
their needs and priorities. In addition, traditional activities and processes may not be
sufficient to meet the unique needs of the future-HR leaders will likely rely on creativity
of their groups to achieve effective results. Increasing globalization of the market will
create a need for both flexibility and creativity as businesses try to succeed in new
locations, with a new workforce, and with new customers.

Delivering value. Although this is not a new challenge for HR, it remains a critical one.
HR is still perceived by many within today's organizations as simply a non-revenue
generating function. It is important to make apparent the value provided by working with
the management team to hire the right people, manage them well, pay them appropriately,
and build a working environment that encourages success. Beatty and Schneier (1997)
extended the concept of delivering value within the organization by arguing that HR must
deliver economic value to the customers, as well as to employees.

Here is a sampling of strategies that I have seen implemented as HR groups work to respond to
environmental and organizational changes, become more valuable, and deliver results.

Business unit assignment. Some companies are assigning HR employees to specific

business units as a way of enabling them to develop a focused relationship with a small
part of the business. This relationship can be enforced when the HR person has a direct
reporting relationship with the leader of the business unit. In these situations, the central
HR group usually provides information and services to the "distributed" HR
representatives, who then deliver the service personally to the business unit. One
advantage of this structure is that it fosters the flexibility and creativity mentioned above,
as the local HR people can modify and tailor processes and services to meet the needs of
their assigned business units.

Centers of excellence. As organizations grow by merger and acquisition, they often find
themselves with multiple HR groups. These can be duplicative or complementary. When
they are duplicative, they can be subject to (painful) downsizing and consolidation,
leaving behind a department that is unable to serve all areas of the business as well as
they had been accustomed, which can, in turn, undermine the credibility of HR. An
effective response to this issue is to utilize the multiple HR groups differently. One
approach that seems to work well is to develop "centers of excellence," where the HR
groups in different parts of the company develop their expertise in a particular area and
serve the needs of the larger company in that area-HR groups operating within this model
can see each other as resources rather than competitors, and the company benefits from
high levels of expertise in a number of areas.

Consulting model. A number of HR departments with whom I've worked have adopted a
consulting model of providing service. They view their internal customers as clients,
learn consulting skills, and take their client satisfaction as a measure of their success. In
one large high-technology firm, internal clients whose needs cannot be met by the
internal HR group can go to external service providers directly-even for basic HR needs.

Job rotation. One way to bring the perspective of the business into HR-and vice versa-is
to rotate line managers into the HR function for periods of time. These individuals often
serve as reality checks for the HR group, and then bring an increased understanding of
the value of HR back to their line function when the rotation is over. This approach seems
to work best when the duration of the assignment is sufficient to allow the rotated
individual enough time to become proficient in some area(s) of HR and when he or she is
working closely with experienced HR people who can help them learn. Sending HR
people into other areas of the business can serve a similar purpose.

Increasing line managers' capabilities. Part of the future HR model is that responsibility
for HR activities is shared between line management and HR people. This approach
allows the manager to be more fully involved in the development and direction of
employees, with HR as a resource; it requires, however, that those managers have the
capabilities needed to work through issues with employees successfully. Many companies
are therefore increasing line managers' access to information. Many of today's HR
information systems and integrated HR systems put tools and data on each manager's
desktop.

It is clearly time for a quantum leap in the HR field, and I/O psychologists working with and for
HR professionals can support this transition by taking seriously the organizational pressures to
change, helping to identify ways to measure the value delivered by HR, and conducting
meaningful research related to all areas of human performance in tomorrow's organizations.

equipped to face the ever increasing pace of technological changes and techniques. This is
the accountability of the human force manager to properly train the work force to
accomplish the competitive advantages of business in the 21st century. HRM managers have
moved from handling simple personal issues to making a strategic implementation through
supporting the long term strategies with the necessary employee qualifications and
developing the cultural and technical capabilities required for the strategies of the
organization. In recent years there has been considerable debate regarding human resource
management (Bal, 2011, p- 2). One has to rise the question here what should be the
priorities for human resource in future? Though we believe that human plays a vital role in
an organization but due to rapidly transforming business landscape, globalization, changing
nature of consumer taste and habits, a new techniques of production, HR managers are
facing a variety of issues and challenges like retention of the employees, multicultural work
force, retrenchment of the employees. Armstrong (2004) defined Human Resource
Management (HRM) as the function within an organization that focuses on recruitment of
management of, and providing direction for the people who work in the organization.
Human resource manager will have to build or develop a frame work that allows flexibility to
develop a workforce for tomorrow (Andries du plessis, 2008, p-167). The primary focus of
the paper is to explore HR issues and challenges and to provide practical solutions.
Review of Literature:
The world federation of personnel management association (WFPMA, 2009) survey pointed
out the most important top ten HR challenges are leadership development, organizational
effectiveness, change management, compensation, health and safety, staff retention,
learning and development, succession planning, staffing: recruitment and skill labour. In the
view point of Decenzo and Robins (2001) the most important challenges of HRM, are
technology, E commerce, and work force diversity, and globalization, ethical consideration of
the organization which may directly or indirectly affect the organization competitive
advantages, especially with technological advancement the affect on recruitment, training
and development and job performance with great extent can be study in organization.
Factors affecting the role of HRM
Globalization
Greengard (1995) defined globalization as the system of interaction among the countries of
the world in order to develop the global economy. Globalization refers to the amalgamation
of economics and societies around the world which means that world trade and financial
markets are becoming more integrated. Growing internationalization of business has its
impact on HRM in terms of problems of unfamiliar laws, languages, practices, competitions,
attitudes, management styles, work ethics etc (Srivastava & Agarwal). Globalization has an
effect on employment patterns worldwide. It has contributed to a great deal of outsourcing
which is one of the greatest organizational and industry structure shifts that change the way

business operates (Drucker, 1998). Globalization is also seen as changing organizational

structures where expenses can move up or down as the business climate dictates (Garr,
2001). As a result HR managers have to confront with more heterogeneous functions and
more involvement in employee's personal life.
Technological advances
Technological advances have a significant impact on HR business practices. Due to the
advancements in the technology there has been a drastic change in the approach to the
various projects and the scenarios that guide to the organizational regulations.
Firstly, the need of skilled personals is mentionable. In order to survive in a competitive
environment the organization definitely in need of the skilled personals in substantial
number to handle the situations and technical equipments. In an organization there are
"hot" sectors which require a high of technical experts like telecommunications, hospitality,
retailing, banking, insurance, bio-technology etc. Next head which is worth mentioning is
the downsizing. New technologies have decimated many lower-end jobs with frustrating
regularity. The increased automation also has reduced the employee head counts
everywhere. The pressure of remaining cost-effective in every aspect has also compelled
many a firm to go lean, and thereby cutting down extra fat at each and every managerial
level (Anurag, 2011). Managing the expectations of knowledge workers is also going to be
a major area of concern for all HR managers in the years ahead.
Other aspect is telecommuting where the employees started to work remotely from a place
other than their primary office. Telecommuting became a popular alternative to avoid the
daily commute where the employees use phones and internet to transmit their office works.
This has been a powerful cost effective tool in the sense that companies have been
successful in increasing their applicant pool through this mode and staffs also may live far
away from cities and gain considerably due to savings in rents, transportation, etc.
The biggest issue due to technological advancement is adaptability, with companies looking
at tools which can integrate with the internet, while other issues of concern include data
privacy, security and business continuity/disaster recovery.
Workforce Diversity
Diversity by definition for the business world means having a workforce that represents
many different viewpoints, backgrounds and cultures. Diversity affects all areas of
organizations from recruitment to compensation, to the affect it has on the corporate
culture, morale and competitiveness. Diversity in the workplace is an increasingly topical
theme in management. Diversity within HRM, termed as workforce diversity, is a
multifaceted phenomenon that can be defined as any visible or invisible difference between
organisational members. Diversity can be labelled into two distinct aspects: observable
differences (e.g. nationality, age) and underlying differences (e.g. values, sexual
orientation). Workforce diversity becomes a particular issue in HRM as it has legal, moral
and business implications for an organization.
There are a number of ways in which people respond to diversity. Behavioural and emotional
reactions to diversity are explained largely by three theories: the similarity attraction
paradigm, social identity theory and social categorisation theory (Pearson, 1995). Workplace
diversity has its positive effects (e.g. innovation, flexibility) as well as negative effects (e.g.
high turnover, decreased job satisfaction). However, diversity management can help

mitigate the adverse effects of diversity and capitalise on the positive effects.
With the fusion of talents of diverse cultural backgrounds, genders, ages and lifestyles, an
organization can respond to business prospects more vividly and creatively, especially in the
global arena, which must be one of the main organizational goals to be attained. The risks
of losing talents to competitors occur when an organizational environment does not support
diversity. This is especially factual for a multinational company (MNCs) who have ventures
on a global scale and employ people with varies ethical and cultural backgrounds. Thus, a
HR manager needs to be mindful and may employ a Think Global, Act Local approach in
most circumstances.
Changes in political and legal environment
If there are Changes in political and legal environment, then almost all aspects of HRM will
be affected by the legal and regulatory environment. The key drivers of a political climate
include the extent of external regulations, nature of work contracts, various labour
legislations and case laws etc. Such factors remain ever changing, and as such, the political
atmosphere of human resource management remains in a constant change of flux. It is the
duty of human resource and industrial relations executives to anticipate the changes and
fully examine the implication, of these changes and brings about necessary adjustment
within the organization so that they can face any changes without any breakdown in its
normal functioning (Srivastava & Agarwal, p-47)
Changes in the Economic Environment
In an economic situation companies suffer both internal and external pressures. The
external competitive pressure stemming from the economic crisis produces a drop in
demand and an increase in unemployment, which in turn affects the global competition in
the market. On the other hand the internal management of the company focuses on
efficiency. This leads to pressure to reduce costs and fringe expenditure, as well as to the
need to justify the need for each and the total amount of all expenditure to be incurred.
High unemployment and layoffs are clearly HRM and managerial issues. Without a doubt,
these matters influence the strategic HR function. In an inflationary economy, the resources
tend to become scarce and the costs of machine, materials and labour multiply. These push
up the capital and running costs.
Ethics
While considering the challenges of human resources there is a need to discuss about
ethics. The discussion about ethics happened during mid 2000s when several companies
were found to have engaged in gross unethical and illegal conduct, resulting in the loss of
billions of dollars from shareholders. Companies are seeing the value of implementing ethics
codes within the business. Many human resource departments have the responsibility of
designing codes of ethics and developing policies for ethical decision making. According to
Steve Miranda, chief human resources officer for the Society for Human Resource
Management (SHRM), "[the presence of an ethics officer] provides a high-level individual
with positional authority who can ensure that policies, practices, and guidelines are
effectively communicated across the organization"( McGraw, 2011). Developing policies,
monitoring behaviour, and informing people of ethics are necessary to ensure a fair and
legal business.
In the present era most of the organizations are competing globally for their best
reputation, by keeping in view the above issues and challenges the HR mangers are

responsible to train all the young workers, to provide them best rewards as a result they will
show their commitment and loyalty.
- Technology has changed each and everything with great extent, the methods of
production, the process of recruitment, the training techniques, new equipment and
technology should be introduced and purchase by the organization and training should be
provided to young and educated workers.
- To cope up with the issue of Globalization HR manager should adopt the concept of
Globalize Human Resource Management (GHRM) where it prepares the skill people or
manager worldwide. This way the trend of globalization can be minimized with some extent.
- Human resource manager should develop such a HR system which consistent with other
organization elements such as organization strategies, goals and organization style, and
organization planning.
- Regarding the debate on work force diversity, the HR manager accountable to make such a
broad strategies which help to adjust employees in global organization, HR must increase
the ability to compete in the international market.
- Organization culture is also another important element which must be consider by the HR
manager, the culture must be like to shape their behavior and beliefs to observe to what is
imperative.
- To provide more and more talent people into the organization the HR manager must redecide and re-arrange the staffing functions, for recruitment selection, training and transfer,
promotion, dismissals, placement, demotion and layoffs of the employees separate
strategies should be developed and implemented.
Conclusions
As we have discussed the dominant issues and challenges which are facing by HR mangers
and organization. The foremost work by the HR is to develop sound organizational structure
with strong interpersonal skill to employees. Training employees by familiarize them with
the concept of globalize human resource management to perform better in the global
organization context. All these issues and challenges like, work force diversity, leadership
development. organizational effectiveness, Globalization, E- Commerce, etc, can be best
manage by HR manager where they have to adopt a HR practice which encourages rigid
recruitment and selection policy, division of jobs, empowerment, encouraging diversity in
the workplace, training and development of the work force, fostering innovation, proper
assigning of duties and responsibilities, managing knowledge. By enthusiastically following
all the above aspects the value of human resource can be improved, organization efficiency
can be enhanced, and the organization will sustain to survive.