Environment of HRM

Environment of HRM includes all

those factors which have bearing
on
the
functioning
of
HR
department.
These forces can be divided in two
categories, i.e.
External Forces
and Internal Forces.
1

Utility of Analyzing the

Environment

To become proactive and not remain

reactive to the environment.
Reactive strategy are useful in stable and
competition less environment.
Todays environment is characterized by
intense competition and change where
proactive steps are vital to survive.
2

Environmental Forces
External
Forces

Political-Legal
Technological
Cultural
Economic

Internal Forces
Unions
Strategy, Task &
Leadership
Organizational
culture & conflict
Professional
Bodies
4

Political-Legal Forces
Plethora of Labour laws related to
employment, working conditions, pay
& wages, and laws related to
industrial disputes.
Which political party is ruling.
Different parties can have a different
outlook.
5

Economic forces
Economic
growth,
industrial
production,
agriculture, population, national and per capita
income,
money
and
capital
markets,
suppliers,competitors,customer & industrial
Labour are the components of economic
environment.

Economic forces relevant to HR:

Suppliers
Competitors
Customers
Economic growth
Industrial Labour

Technological
Jobs tend to be more intellect.
Obligation of HRM to train workers acc. to
new technology and to rehabilitate those
who can not be trained.
Workers acquaint with new technology are
more demanding.
Technology has impact on human relations.
Job
holders
have
become
highly
professional and knowledgeable.
7

Cultural Forces
Culture refers to complete whole
which includes knowledge, belief,
art, morals, laws, customs, and
other capabilities & habits acquired
by an individual as a member of
society.

Strategy, task & leadership

Alignment
between
the
strategy,
structure, people, and management is
important for organizations success.
Nature of task/ job also affects HR in terms
of hiring, compensation, training etc.
Leader also impact any of function area of
organizations.
9

Unions
Unions are considered a part of
internal as well as external force in
an organization due to its affiliation
from outside political parties.
Unions have influence on all HR
activities right from hiring to
separation.
10