The Evolution and Environment of Human Resource Management

After reading this chapter, you should be able to:

List the stages of evolution in human resource management. Enumerate the environmental influences on human resource management. Differentiate between the kinds of HR environment perspectives. Understand the environmental scanning process.

Phases in the evolution of HRM

Each era in the history of HRM demonstrates the thinking and attitude of the employers and their workforce at that point of time.

Phases in the evolution of HRM (contd.)

Labour welfare laws, labour market conditions, labour awareness, strength of the unions and the employers attitude towards the employees and their union have collectively shaped the HR environment of firms in different eras in history.

Different phases in the evolution of human resource management are:

Factors that shape the HRM environment

The external environmental factors are

Social environment factors Demographics Educational status Technological environment factors

Factors that shape the HRM environment (contd.)

Political environment factors Nature of political organization and system Political stability Prevailing political ideologies

Factors that shape the HRM environment (contd.)

Legal environment factors Economic environment factors Labour market Globalization Competitors Trade unions Customers Shareholders

Internal environmental factors

The vision and mission of the organization Business strategy Organizational culture Organizational structure HR system

Kinds of environment perspectives

Objective environment perspective As per this perspective, the environment is real but functions independently of the firm. As such, the results of analysis of the environment can form the basis for developing or revising the objectives and strategies of a firm.

Kinds of environment perspectives (contd.)

Perceived environment perspective As per this perspective, an environment is real and material. However, the difference between the reality of the environment and the perception of such a reality by the analyst might lead to the designing of flawed strategies.

Kinds of environment perspectives (contd.)

To achieve a good fit between the strategies and the environment, firms should control and then eliminate the factors that cause an imprecise assessment of the environment.

Kinds of environment perspectives (contd.)

Enacted environment perspective As per this perspective, the environment is not real or concrete but a creation of the participants of the environment.

Kinds of environment perspectives (contd.)

Each organization can create its own environment based on its own knowledge of the environment. An environment is thus created through the interaction of all those who are associated with it.

Environmental scanning process

Source: Zita Correia and T. D. Wilson Scanning the Business Environment for Information: A Grounded Theory Approach, Information Research, 2, No. 4 (1997) available at http://informationr.net/ir/2-4/paper21.html

Steps in environmental scanning process

The steps in environmental scanning process are Environmental scanning This stage involves gathering information about the changes in the factors influencing the environment.

Steps in environmental scanning process (contd.)

The factors that influence this process are External environmental factors Internal environmental factors Scanning strategies

Steps in environmental scanning process (contd.)

Perceived environmental change Managers perceptions of changes in the environment and their likely effects on the firm significantly influence the strategy formulation process.

Steps in environmental scanning process (contd.)

Managers perception about the environment is bound to change as they get more information in this process, managers generally classify the changes in the environment as serious, important, and unimportant based on their own perceptions of the environment.

Steps in environmental scanning process (contd.)

Strategic change In this stage, organizations make required changes in their HR strategies based on those in the environment.

Steps in environmental scanning process (contd.)

An organization may change its employees training programmes, compensation packages, safety measures and recruitment practices as part of its response to a changing environment.