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8/3/2019 Human Resources Adapting
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Human Resource Management Practices: Adapting to the 21st Century in Bangladesh
Abstract:
Today when we are on the verge of the twenty first century, very rapid and unprecedented
changes are occurring at the global, national and local levels. For several years Bangladesh has
seen a massive shift away from an agricultural based economy to knowledge or information
based economy. But, are we prepared to face these changes? Have we created a conducive
environment to unleash their potential for the benefit of the organization? These are some of the
pertinent questions that need to be addressed to the organization to survive and grow.
Organizations will have to manage and master the change properly. If they can not do so, they
could end up like the dinosaurs and become extinct. Thus, organizations have an option: they can
either be agents or victims of changes. This paper will highlight the status of existing twenty first
centurys human resources management practices by the organization- both manufacturing and
service, operating in Bangladesh and how Bangladesh can adopt the changes of the twenty first
century through re-thing and re-engineer the present human resource management practices.
Key-words: Human Resource Management (HRM), Human Resource (HR), Skill.
1.0 IntroductionTechnological advances, worldwide competition, falling trade boundaries and a changing world
order is forcing organizations to re-think their strategies in order to survive and grow. The thrust
of human resources in the twenty first century in Bangladesh is to prepare a workforce that is
capable of meeting challenges of a knowledge-based economy, well- equipped with
technological skills and expertise and a high level of thinking skills. Every organization has a
personnel function as it must live, train, pay, motivate and maintain employees. Today the
human resource managers are required to plan, organize, direct and control the procurement,
development, compensation; integration may accomplish its designated objectives. Human
resource management in the twenty first century in Bangladesh need to undergo fundamental
changes and move beyond its traditional human resource management practices to integrate all
these functions in order to effect a reasonable reconciliation of individual, organizational and
societal interests. In the newly emerging socio-cultural pattern, society may impose human goals
upon organizations and these goals may or may not make an immediate contribution to an
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
Century in Bangladesh Journal of Business studies, University of Dhaka 1
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organizations particular objectives.
Obviously, human resource management has to face the challenge of bringing about a
reconciliation of employee needs, managements expectations and societys requirements. While
surviving and thriving well in the changing scenario, the greatest challenge to human resource
management is that of balancing the confluence of these three major streams of influence. The
changing scenario in the world of work has produced an environment of turbulence and
uncertainty so much so that it calls for a major reorientation or re-thinking in the philosophy,
policy, programs and practices of managing human resources at work instead of traditional
human resource management practices.With the rising expectations of people and higher
performance standards from organization human resource management is required to apply more
creativity and innovation in human resource practices. The rather, it is to keep alive the process
of human resource transformation during a sequence of radical corporate change. In this regard,
may be organization should take the opportunity to review as to whether our Humanware isdeveloped properly and managed optimally.
2.0 Literature review
Initially the concept of HRM was developed as a set of techniques that claimed to embrace and
promote new approaches to management of people and work organization to enhance employee
commitment and flexibility as well as their willingness to respond rapidly with the chainging
market conditions for providing competitive advantages to the organization. (Mohiuddin and
Mahmood, 2001).It is a management concept with multi- and interdisciplinary elements that
evolved in the early 1980s in the US. It took another decade, 1990s, before it became fully
established internationally as a scholarly discipline (Poole, 1999, Schuler, 2000).
The implementation of human resource management policies in an organization requires HR-
practitioners or professionals to take an active part in different organizational activities.
According to Schuler et al. (2002), HRM policies and practices involve the development of how
individuals should be managed and specific HR initiatives. HRM policies and practices include
those related to planning, staffing, appraising, compensating, training and developing and labor
relations. HR planning ensures that the organization has appropriate people at the right place and
time. Hossain and Ahmed ( 1996) revealed that in Bangladesh reason behind the excellentperformance and the existence of large number of NGOs are for their better HR plan.
Schuler et al. (2002) point out that staffing is a major HRM practice that organization uses to
help to co-ordinate and control their global operations. Molander (1996) states that recruitment,
selection and placement are the activities concerned with finding suitable people to fill job
vacancies within organizations.
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
Century in Bangladesh Journal of Business studies, University of Dhaka 2
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Morley (2004) states that performance appraisal is a managerial tool to control individual
performance in organizations in order to achieve maximum performance. Ubeda and Santos
(2007) state that understanding of the relationship between competence based management and
performance appraisal is necessary.
Harzing and Van Ruysseveld (1995) state that compensation should be more immaterial in
nature. This might involve the persons career prospects, for example the opportunity to grow
within the company or participate in international exchanges of information which allow him/her
to get involved in strategic policy planning.
Training and development are defined by Molander (1996) as the systematic process concerned
with facilitating the acquisition of skills, knowledge and attitudes which result in improved
organizational performance. He states that the lack of training and development strategies within
organizations can be viewed negatively by graduates. Low training organizations can lose their
attractiveness to existing and potential labor.DNetto and Sohal (1999) state managing diversity includes a process of creating and
maintaining an environment that naturally allows all individuals to reach their full potential in
pursuit of organizational objectives. Organization can effectively manage cultural diverse
workforce through the effective integration of HR functions.
Moyeen and Hug (2001) revealed in Bangladesh HRM is being practiced, either formally or
informally, to a greater or leaser extent, in business enterprises regardless of their size.
There is, in fact, no comprehensive study found on changing scenario of HRM practices in the
21st century. In this circumstance a study on this area is essential to uncover the relevant facts.
Our studies are endeavor for the same.
3.0 Objectives of the study:
The objectives of this study are as follows:
To assess the nature and characteristics of existing twenty first century human resource
management practices in Bangladesh.
To evaluate the changing scenario of human resource management practices in the twenty
first century in Bangladesh
To highlight the forward looking human resource management issues and backward
looking human resource management issues in Bangladesh.
To recommend strategies and actions to be adopted to face the challenges of the twenty
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
Century in Bangladesh Journal of Business studies, University of Dhaka 3
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first century human resource management practices in Bangladesh.
4.0 Methodology:
The research adopted both quantitative and qualitative techniques for the purpose of the study.
Keeping the basics objectives in mind, a simple close-ended questionnaire was designed for
human resource managers of different manufacturing and service organizations of Bangladesh.
Manufacturing organizations included readymade garments, consumer goods and industrial
products manufacturing while service organizations comprised banks, telecommunication
companies, power supply companies and hospitals etc. A total of 100 organizations were
selected through random sampling. The questionnaire was mailed to the respondents and a total
of 70 filled questionnaires were received. Among the 70 respondents 20 were manufacturing
organizations and 50 were service organizations. The data was then tabulated to identify the
percentage of different practices of human resource management. Secondary data andinformation were collected from the existing literature in the field of human resource
management. It covered research articles, papers, text books, publications, web sites, and various
published and unpublished research materials on the subject.
5.0 Findings of the study:
The analyses of findings are made under the following main heads keeping in mind the
objectives of the study.
5.1 HR categories
At the macro level, Human Resources can be neatly divided into two general, but distinct
categories:
Administrative overhead
Strategic contributions to organizational success
Administrative overhead in any professional discipline seeks the most efficient delivery of
transactional work work that requires little or no subsequent quality interpretation in order to
satisfy the needs of the organization or its overseers. For example, payroll processes are just that processes. Mechanisms are put into place to insure that payroll data is transferred correctly.
This allows the payroll processing unit to print the payroll checks or make electronic transfer of
funds correctly and on time. Historically, this has been done either in-house or with an outside
local payroll processing company. Now, it can also be done internationally via the Internet, and
at a lower cost to the subscribing company.
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Century in Bangladesh Journal of Business studies, University of Dhaka 4
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Strategic HR contributions to organizational success require skill sets that are not as prevalent in
the traditional HR community. Fortunately, this is changing rapidly as more and more HR
practitioners acquire these new skill sets and apply them to the organizations performance
pressure points. Compensation strategy, for example, requires a deeper understanding of basic
business finance and cost variables in order to recommend and justify payroll practices and
consequences.
5.2 RecastingtheHRfocus
Todays organizational success requires dedicated and highly skilled professionals who can solve
complex problems using multi-disciplinary teams. As a result, HR can no longer exist as a stand-
alone function. HR professionals are re-casting the underlying assumptions of the function into
three fundamental approaches:
Human Resources leaders are business professionals first and HR specialists second. Their workis focused on helping achieve the companys strategic goals and objectives. As such, they invest
more in outcomes than in activities. Success in HR functions is now directly related to success in
marketing, sales, production and other departments.
Human Resources conduct its operations so that its activities provide critical and measurable
contributions to the profitability and productivity metrics established for the organization.
Employee benefit plans typically cost a company between 30% and 40% of payroll costs. These
costs impact the companys ability to price its products or services competitively so that it can
maintain its market share and profitability ratios. In designing such policies, HR now considers
the impact of benefit costs beyond the basic cost of the benefit program. Corporate financial
performance is no longer restricted to the Finance and Accounting department.
Human Resources professionals are becoming fluent in the language of business and the cultural
norms of the society. All business people must clearly know how to read financial statements and
link their work to those performance drivers. Non-financial metrics such as environmentalism,
community involvement, and corporate social responsibility are becoming more and more
critical as special interest investors demand performance results in these areas. High performing
HR executives assume a leadership role in advancing these and other non-financial objective as
well as the traditional financial metrics.
5.3 Forward looking HR vs. Backward looking HR
If we examine traditional HR practices, we observe that most of the rules and regulations under
which we operate were created during the Industrial age economic model. Much of it made sense
then, but a lot of it does not make sense in todays information/knowledge economy.
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Our compensation laws, for example, were created in the 1930s during the height of the
Depression. They have been modified somewhat over the years, but the underlying theories of
the industrial era mind-set still govern and control our compensation thinking. This conflicts with
the knowledge age economic mindset. The paradigm has shifted.
The popular organizational behavior theories that are highlighted in all of our textbooks were
generated during the 20th century when manual production was a dominant industrial force.
Popular thinkers such as Abraham Maslow, Douglas McGregor, Frederick Herzberg and their
colleagues all based their research on the industrial models that they had to work with.
Generally, supervisors and employees were all in close physical proximity to each other. There
were numerous opportunities to observe worker interactions and draw rational conclusions.
Now, in our knowledge based and virtual management economy, our subordinates are connected
electronically via the Internet and much of our industrial work has morphed into an efficient
mechanized or digitized process that reduces the need for human intervention. Thanks totechnology, our work teams may comprise of six people working in six different countries with
six different approaches to labor laws. Thus, the industrial paradigm has shifted to the global
knowledge or information paradigm. With this shift come opportunities for the Human
Resources function to re-cast their role in the organization.
5.4 Re-casting human resource roles
Lets take five HR roles and examine them in detail.
Compensation
Labor and compensation laws such as exempt and non-exempt overtime classifications and the
40-hour work week were created during the 1930s when the US was trying to re-start its
industrial engines. Those rules still govern our compensation thinking and still govern many of
the labor laws under which companies must operate. Yet corporate operating business paradigms
have significantly shifted away from the conditions that existed during the 1930s and the
1940s. Where once hierarchical structures were typical, matrix and virtual organizations are
now common place.
Yet our compensation laws lock us into the 40-hour work week with mandatory overtime for any
hours worked beyond that limit. It forces the employer and the employees to put the processahead of the outcome. Even when an employee is highly motivated to finish a job, he must stop
at the 40 hour mark because, in order to remain competitive, his company cannot, or has decided
not to pay overtime. Tight budgets and other countries competing for our production and service
business at much lower costs have created business models that, not surprisingly, force us to
consider outsourcing as a smart option.
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
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Human capital
We are currently living in an era where four generations are working together in the same
workplace: Veterans, Baby-boomers, Generation X and Generation Y. Each group comes with
its own set of generational values, attitudes, capabilities, and inherent biases. As such, one-size-
management-fits-all is not effective with these four groups. Dominant work values between the
generations inherently clash unless a unifying force is present. The challenges to the employers
and employees is to find that unifying force, hopefully without violating trust, ethics, law, and
common sense.
Work values are powerful forces impacting the four generations. Younger employees, for
example, tend to focus more on intrinsic motivators and satisfiers such as freedom and
autonomy, task identity and task significance than older employees. Older employees tend to
focus more on identity to their career and keeping up with the rapid-fire technological changes
changes that may indicate whether they will continue to have a job.The reality of our nomadic and inter-generational workforce forces organizations to re-think their
approach to employees. Smaller companies tend to offer greater opportunities for a wide range of
responsibilities and authority. However, they may not be able to provide promotion or in-depth
development opportunities within a skill set such as marketing, human resources or information
technology. Larger companies may be able to provide strong functional discipline opportunities
such as sales but at the expense of locking the employee into a narrow career field that is subject
to powerful and changing market forces.
Evaluating work
Until recently, most job descriptions typically described activities performed rather than
contributions made to organizational success factors. Under the backward looking paradigm,
many supervisors have difficulty articulating why their subordinates job existed and how it is
directly linked to the success of the department or the organization. With poorly conceived and
thus poorly written job descriptions, it is difficult at best to take any performance appraisals
system seriously. These systems are morphing from a theoretically valuable performance
improvement process to a Cover Your Ass legal protection device. No one is served by this
approach.
Compounding these problems, managers link personnel decisions to these poorly conceived jobdescriptions and performance appraisals. Promotions, salary increases, transfers, layoffs, job
assignments and other personnel actions are accomplished using a system that is flawed by the
paradigm shift from brawn to brains.
In Performance Appraisals systems, old underlying assumptions must give way to new,
alternative assumptions. Performance appraisals given by poorly trained superiors who may
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
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work and reside on the other side of the country or the world assume that the process will
motivate an employee to achieve higher standards. According to the authors, there is no
empirical evidence to support these assumptions. Value-added work requires knowledge or
information and the ability to influence the resulting data to the benefit of the client or customer.
The paradigm shift argues that the knowledge employees are better suited for self developed
appraisal than the system created by the organization. Yet our labor relations courts bind us to
remain under outdated laws that are deleterious to the skills, abilities, desires and retain ability of
the knowledge workers.
Todays successful workforce focuses on empowerment and the ability to solve complex
problems in multi-disciplinary teams. In many companies, supervisors may supervise 20-30
people with many of them located in various parts of the world. Under the old paradigm, the
manager would have to evaluate them all in a common process. Now, with a highly intense
workload, no manager or supervisor can consistently or fairly appraise anyone under the oldsystem.
Other systems are being re-thought. For example, forced ranking approaches has merit but fails
to take into account that no one cares who is in the top or bottom if the company is going
bankrupt. The paradigm has shifted.
Managing human capital
A review of textbooks and literature on organizational development has many chapters relating
to the classic theorists of the 20th Century. Abraham Maslows Hierarchy of Needs, Frederick
Herzbergs Hygiene Factors, Douglas McGregors Theory X vs. Theory Y, and, of course,
Frederick Taylors Scientific Management, to name a few.
Although most of those theories were not supported by empirical evidence, a lot of them made
sense at the time. Some still do. Yet the research that led to these theories was conducted in
during an entirely different cultural paradigm. For example, in the first half of the 20th Century,
when many of these theories originated, most supervision was local. The supervisor was within a
short walk of all of his or her subordinates. There was plenty of opportunity to formally observe
work performance and production. There was also plenty of opportunity to informally gather in
the lunch room, the hallways, the factory shop, and on the ball field or other social venues. Most
workers lived in the same community and shared common values, cultures and experiences.Closer relationships were formed and general observations could be made.
Today, however, a manager may be located in Chicago with her direct reports located in Seattle,
Dallas, Singapore, Tel Aviv, and Buenos Aires. Managing people in diverse sites who are
connected to you via the Internet opens up challenges to conventional managerial theories.
Traditional subjects like motivation, communication and leadership take on an entirely new
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
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dimension and are constantly being challenged. Where Maslow and Herzberg focused on
American workers, globalism has begged for additional research on topics such as motivation
and empowerment based on international sensitivities and traditions.
Cultural differences
Indeed, analyzing variations among cultures was exhaustively done in the 1970s (with
subsequent updates) and found that managers and employees vary on five value dimensions of
national culture. Each dimension is worthy of further study and comprehension:
Power and distance focuses on the degree of equality or inequality between people in a
countrys society;
Individualism focuses on the degree the society reinforces individual or collective achievement
and interpersonal relationships;
Masculinity focuses on the degree society reinforces, or does not reinforce, the traditional
masculine work role model of male achievement, control and power;Uncertainty avoidance focuses on the level of tolerance for uncertainty and ambiguity within the
society;
Long Term Orientation focuses on the degree to which a society respects cultural traditions and
the value it places on long-term commitments.
Training employees for international assignments is a discipline into itself. Not only to they have
to know business etiquette and negotiating styles of the host country, they also have to
understand the impact of concepts on their business and social activities in their foreign
assignment.
5.5 The empirical study
The survey revealed that all organizations in Bangladesh practice 21st centurys HRM of some
sort. However, there are variations in terms of traditional HRM and 21st centurys HRM
practices.
Table-1 HRM Practices in Bangladesh
HRM Practicesin Bangladesh
Organizational Belief andAssumptions regarding
HRM Practices in
Bangladesh
Organizational StrategiesAspect regarding HRM
Practices in Bangladesh
Organizational KeyLevers regarding HRM
Practices in Bangladesh
Total
Traditional HRM 80% 40% 51% 57%
21st century HRM 20% 60% 49% 43%
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
Century in Bangladesh Journal of Business studies, University of Dhaka 9
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Source: Field Study
It is observed (Table-1) that 57% organizations practice traditional HRM whereas 43%
organization practice 21st centurys HRM. A considerable variation was also observed among
manufacturing and service organization in this regard.
Table -2 HRM Practices in Manufacturing Organization in Bangladesh
HRM Practices
in Bangladesh
Organizational Belief and
Assumptions regarding
HRM Practices in
Bangladesh
Organizational Strategies
Aspect regarding HRM
Practices in Bangladesh
Organizational Key
Levers regarding HRM
Practices in Bangladesh
Total
Traditional HRM 78% 38% 48% 55%
21st
century HRM 22% 62% 52% 45%Source: Field Study
It showed ( Table-2) that 55% manufacturing organization in Bangladesh practice traditional
HRM and 45% practice 21st centurys HRM while ( Table-3) 59% service organization in
Bangladesh practice traditional HRM and 41% practice 21st centurys HRM.
Table -3 HRM Practices in Service Organization in Bangladesh
HRM Practices
in Bangladesh
Organizational Belief and
Assumptions regarding
HRM Practices in
Bangladesh
Organizational Strategies
Aspect regarding HRM
Practices in Bangladesh
Organizational Key
Levers regarding HRM
Practices in Bangladesh
Total
Traditional HRM 82% 42% 54% 59%
21st century HRM 18% 58% 46% 41%
Source: Field Study
In terms of organizational belief and assumptions regarding HRM practices in Bangladesh, it was
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
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observed (Table- 4) 80% organizations practice traditional HRM whereas 20% organization
practice 21st centurys HRM. Among beliefs and assumption, most practices (24%) in the 21 st
centurys HRM by the organizations are guide to management action philosophy where as most
practice (91%) by the organizations in case of traditional HRM is contract philosophy.
Table -4 Organizational Belief and Assumptions regarding HRM Practices in Bangladesh
Source: Field Study
As regard of organizational strategies aspect regarding HRM practices in Bangladesh, it was
observed (Table- 5) 60% organizations practice 21st centurys HRM whereas 40% organization
practice traditional HRM. Among organizational strategies aspect, most practices (89%) in the
21st centurys HRM by the organizations are communication philosophy where as most practice
(84%) by the organizations in case of traditional HRM is key relations philosophy.
Table -5 Organizational Strategies Aspect regarding HRM Practices in Bangladesh
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
Century in Bangladesh Journal of Business studies, University of Dhaka
Organizational
beliefs and
assumptions
regarding HRM
HRM Task HRM Practices Manufacturing
Organization
Service
Organization
Total
Contract Careful delineation Traditional HRM 90% 92% 91%
Aim to go beyond contract 21st century HRM 10% 08% 09%
Rules Importance of devising Traditional HRM 90% 92% 91%
Can do outlook, impatience
with rule
21st century HRM 10% 08% 09%
Guide to
management
action
Procedures Traditional HRM 80% 72% 76%
Business need 21st century HRM 20% 28% 24%
Managerial task
to labor
Monitoring Traditional HRM 50% 56% 53%
Nurturing/ take care 21 st century HRM 50% 44% 47%
Nature of
Relations
Pluralist Traditional HRM 80% 96% 88%
Unitarist 21st
century HRM 20% 04% 12%
Grand Total Traditional HRM 78% 82% 80%
21st century HRM 22% 18% 20%
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Source: Field Study
Concerning organizational key levers regarding HRM practices in Bangladesh, it was ascertained
(Table- 6) 49% organizations practice 21st centurys HRM whereas 51% organization practice
traditional HRM. Among organizational key levers regarding HRM aspect, most practices (70%)
in the 21st centurys HRM by the organizations are working environment philosophy where as
most practice (73%) by the organizations in case of traditional HRM is job categories and gradephilosophy.
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
Century in Bangladesh Journal of Business studies, University of Dhaka
Organizational
Strategies Aspect
regarding HRM
HRM Task HRM Practices Manufacturing
Organization
Service
Organization
Total
Corporate plan Marginal to Traditional HRM 40% 24% 32%
Central to 21st century HRM 60% 76% 68%
Speed of decision Slow Traditional HRM 30% 36% 33%
Fast 21st century HRM 70% 64% 67%
Initiatives Piecemeal Traditional HRM 30% 48% 39%
Integrated 21st century HRM 70% 52% 61%
Key relations Labor management Traditional HRM 80% 88% 84%
Customer 21st century HRM 20% 12% 16%
Communication Indirect Traditional HRM 10% 12% 11%
Direct 21st century HRM 90% 88% 89%
Grand Total Traditional HRM 38% 42% 40%
21st century HRM 62% 58% 60%
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Table -6 Organizational Key Levers regarding HRM Practices in Bangladesh
Source: Field Study
6.0 Concluding remarks
Traditional Human Resources assumptions are being reconsidered as its leaders and practitioners
re-think how the discipline goes about adding value to its host company. For example, the merit
increases between an above average performer and an average performer is typically marginal at
best. Most companies can only afford 3-5% pay raises for the best of the employees and
somewhat less for average employees. The effect is dissatisfaction with a formerly motivated
employee.
Basic managerial and supervisory skills were, and still are taught using industrial era
philosophies. Supervisory courses are being taught with a model that assumes that the supervisor
is in daily and personal contact with his subordinates and can control the environment wherethey work in order to achieve higher performance standards. When it comes to evaluating the
performance of her subordinates, the manager is expected to comply with the spirit and letter of
an appraisal system that was designed 50+ years ago under an entirely different managerial
mindset. This is hardly a recipe for success.
What can HR do to adjust to this paradigm shift? Here are some suggestions:
M.T. Islam, M.A. Rahaman 2011Human Resource Management Practices: Adapting to the 21st
Century in Bangladesh Journal of Business studies, University of Dhaka
Organizational
Key Levers
regarding HRM
HRM Task HRM Practices Manufacturing
Organization
Service
Organizatio
n
Total
Selection Separate Traditional HRM 30% 44% 37%
Integrated 21st century HRM 70% 56% 63%
Pay Fixed grade Traditional HRM 40% 64% 52%
Performance related 21st century HRM 60% 36% 48%
Working
environment
Separately negotiated Traditional HRM 40% 20% 30%
Harmonization 21st century HRM 60% 80% 70%
Job categories and
grades
Many Traditional HRM 70% 76% 73%
Few 21st century HRM 30% 24% 27%
Job design Division of labor Traditional HRM 60% 68% 64%
Team work 21st century HRM 40% 32% 36%
Grand Total Traditional HRM 48% 54% 51%
21st century HRM 52% 46% 49%
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Human resources practitioners must become fluent in the language of business This means
that they have to understand basic concepts of business finance and accounting. One does not
need to be a CPA in order to read basic financial statements like those found in corporate annual
reports. However, HR must be able to link their metrics to those of executive leadership. Where
HR is concerned with efficient administration of benefits and compensation programs, the CEO
is concerned about rising payroll costs that affect pricing strategies to sustain competitive
advantages and market share. HRs arguments cannot be accepted unless they address the issues
that keep CEOs awake at night. Falling profit margins and dwindling retained earnings may
signal downsizing, re-structuring, and other belt-tightening measures. Conversely, rising profit
margins can be opportunities to improve salaries, benefits, and other job enhancement
opportunities. Smart HR professionals watch the numbers and base their initiatives on the
opportunities or threats that are presented.
Link HR work to the factors that govern your organizations decision making processes
Although much of HR work is transactional in nature, strategic Human Resources focuses its
efforts on profitability and productivity contributions that enhance the organizations ability to
sustain and grow its business. Although a lot of HR work is heavily focused on managing the
employment process in accordance with the spirit and letter of employment law, newer and more
tangible value-added work focuses on work outcomes beneficial to corporate survivability and
success. No one in any job can be allowed to confuse activity with productivity.
Wholly integrate HR into all other departments Human resources as a corporate function
cannot exist as a stand-alone discipline. Organizations are made up of several interconnected and
interdependent entities. HR must wholly integrate itself into all other functions and its
practitioners must be able to speak the language of every department. If you expect to work as an
equal partner with the companys other strategic experts, you must be able to talk with and to
themat their levelabout their areas of responsibility.
Develop competitive intelligence skills Competitive intelligence helps firms define andunderstand their industry and identify rivals strengths and weaknesses. It is not spying, which
implies illegal or unethical activities. It is an assessment of future trends, needs, threats and
opportunities. The more you know about your business and its industry, the more apt you are to
make decisions that positively affect your outcomes. It is not, however, a crystal ball. No one, for
example, could have predicted the power of the Internet 20 years ago.
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HR professionals learn to scan & monitor the environment in order to predict their companys
human capital needs. What skills, knowledge and abilities (KSAs) will the company need to
sustain and grow their business? Four generations working together creates recipes for conflict
unless managers understand the differing motivating values of each generation and develops a
unifying force to unite the segments. In order to attract and retain the best and the brightest
people, HR develops forecasting models based upon factors such as market growth, financing
availability, technology, and organizational culture. From this competitive intelligence, HR is
able to produce a business plan support strategy that will direct the activities and outcomes of the
department towards the overall goals of the company.
Human Resources professionals are in a unique position to make the transition from back
office administrative overhead to front line profitability and productivity contributors.
Fortunately, it appears that the leadership of SHRM is taking the lead in encouraging its local
chapters to adapt to the changing world or risk being marginalized or eliminated altogether. It isthe job of all of us to help make this transition.
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