Professional Documents
Culture Documents
Biographical Note
Professor Seyed-Mahmoud
Aghazadeh can be Human Resource Management:
Issues and Challenges in the New
contacted at Production &
Operations Management,
Department of Business
Administration, State
Millennium
University of New York at
Fredonia, Fredonia, NY
14063, USA
by Seyed-Mahmoud Aghazadeh
Introduction
HRM will face numerous opportunities and challenges in the coming millen-
nium. How well they cope in an increasingly global market will impact how well
their company does in the marketplace. HR professionals will need to deal with
such diverse issues as building a talent pool, managing diversity programmes, us-
ing technology as a human resource management tool, dealing with employment
law issues and the impact of the EURO. Flexibility, the ability to cope, and knowl-
edge will be required of future human resource managers. To add to the complex-
ity of those issues is the fact that many of the factors are inter-related and affect
different aspects of operational and human resource management.
The first aspect that we will examine is that of personnel issues and challenges.
The beliefs of Frederick Taylor, father of scientific management are still valid. It
was his belief that management should assume more responsibility for: matching
employees to the right job, providing the proper training, providing proper work
methods and tools, and establishing legitimate incentives for work to be accom-
plished. These beliefs continue to be valuable components of effective personnel
management. The successful companies or organisations will be those that are
able to attract and retain highly skilled employees. In order to do that, they must be
able to match what the employee wants with what the employer is willing to give.
Human resource directors and executives are coming to the realisation that if you
take care of your people; they will take care of you. Many companies are doing this
by offering innovative and flexible benefits.
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Management Research News
They provide benefits based upon what the best particular fit is for the employee.
One location may offer child-care benefits, while another may offer flexible hours
or working from their home. Organisations need to build a better benefits package.
Companies need to look at their total reward package in order to retain their skilled
workers to be sure that these programmes really add value. They should avoid be-
ing rigid and try to customise benefits to the individual employee.
Yahoo! has begun offering personal finance seminars for its employees
whose stock options have grown tremendously (Yahoo!’s stock is now worth 20
times more than it was in 1996). They are also using parties on Fridays and visits
from Ben & Jerry’s ice cream truck to create positive morale.
The Sears department store has compiled data that showed a small increase in
employee commitment resulted in a measurable increase in customer commit-
ment and store profitability.
They found that two areas of employee satisfaction had the largest effect on
employee loyalty and behaviour toward customers. These areas were their attitude
toward the job and toward the company. Sears provides extensive training to their
new sales associates and has empowered them by giving them greater decision
making authority. They use town hall meetings to seek input and disseminate in-
formation to their employees. They stress that the employees are expected to “sat-
isfy the customer.” Sears was fortunate that the public’s perception was positive
and saw them as being honest.
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Volume 22 Number 12 1999
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Management Research News
age shared learning among their employees. Organisations who choose to grow
through mergers, consolidations or joint ventures need necessary skills to com-
bine different work processes and cultures.
This brings us to the challenge of intellectual capital. The most successful or-
ganisations will be the ones who can attract, develop and retain individuals who
have the ability to manage a global organisation that is responsive to customers
and the opportunities being presented by technology. It will be the HR depart-
ment’s responsibility to find, assimilate, develop, compensate and retain these tal-
ented employees.
Companies are having a difficult time finding skilled workers. A net one mil-
lion skilled jobs are expected to be created over the next ten years with no pro-
jected increase in supply. They must come to the realisation that they need to
invest in training their employees. This training will not only improve the quality
of the labour pool but also lead to more commitment on the part of employees.
This commitment will lead to higher productivity. The old contract of job security
and fair wages in exchange for worker loyalty has been broken. Income inequality
has increased the ratio of CEO pay to that of the other average worker has jumped
from 27:1 in 1973 to 48:1 in 1991. The gap continues to grow from 45:1 to 173:1
when restricted stock, stock-options, and other long-term payouts are included.
Companies need to address this issue and work to retain their skilled employees.
Large companies are now competing with small companies for executives.
The smaller companies can offer opportunities for greater impact and wealth. The
average executive today will work in five companies. In the past, executives
worked in one or two companies. It is projected that in ten years the average execu-
tive could work in seven companies. Executive talent has long been an under man-
aged company asset. People have not been made a priority. Superior talent will be
tomorrow’s prime source of competitive advantage. The question needs to be
asked, why would a talented person want to work here?
The current labour force is living longer and is healthier than the last genera-
tion. Adults have been found to be going back to school to improve and update
their skills. It is likely that they will not be retiring in the same way that their par-
ents did. They will probably continue to work, or possibly retire from one career
and enter another. The younger members of the workforce will be competing with
the older members for jobs.
In the global economy, organisations that can quickly put strategy into ac-
tion, manage processes intelligently and efficiently, obtain the most from their
employees, and make change seem effortless.
The HR department must orient and train line management to initiate prac-
tices that will achieve high employee morale. They must be the employee’s voice
in the decisions being made by management. Opportunities need to be presented
for the employee’s personal and professional growth. Resources have to be put in
place to assist the employees to meet the demands being placed upon them. Tools
such as workshops, written reports and employee surveys can be utilised to help
managers understand.
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Volume 22 Number 12 1999
Good customer service depends on having people who feel good about the
organisation and care about the customers. The people, culture and abilities of an
organisation can create competitive advantage. If your workforce has a high com-
mitment to the organisation, they will work harder, smarter, and save on adminis-
trative overhead that might be present when alienation exists between labour and
management.
Disabilities, diversity and globalisation also play a part in the changing em-
ployee expectations. The federal government has even sanctioned some of these
expectations. The Americans with Disabilities Act mandates that employers and
service providers maintain a certain level of accessibility for people with disabili-
ties. Companies must provide their employees with the necessary equipment to
perform their job in a safe manner. This can range the gamut of keyboard rests to
prevent the aggravation of carpal tunnel syndrome to installing wheelchair ramps
and door openers.
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One big issue that has evolved with the use of technology in the workplace is
that of intellectual property rights. Who is the owner of what is created? Does it re-
main with the employee or does the company who provides the material to pro-
duce it become the owner. This is a particularly thorny issue and various
companies deal with it in a variety of ways. Some companies keep sole ownership
of intellectual property, while others may either relinquish ownership to the
author or negotiate a settlement of some sort.
Why are computers and the use of task specific software packages an issue in
HRM? The primary reason for the existence of any business organisation is to
maximise profits. In order to maximise profits, organisations must not only maxi-
mise revenues but also minimise costs. Increased efficiency is the most productive
way to minimise costs. This applies both to human resource functions as well as to
automated manufacturing processes. If used properly, computers, with their speed
and accuracy, can increase the efficiency of the HRM department, not to mention
the entire company, thereby maximising revenues while minimising costs. Per-
sonnel software packages can be a boon or a bane to the human resource manager;
dependent upon how carefully they are selected. When considering the implemen-
tation of enterprise workforce management, there are five key points that need to
be considered:
* Map human resources processes: Before deciding on the best software
option, companies need to have a clear understanding of the HR hiring
and management processes already in place. HR experts need to exam-
ine streamlining the old processes to ensure that what is being built is a
better solution, not just automation of a broken system.
* Think about the enterprise: Bring executives from other areas of the
company into the discussion and investigate what type of access is
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The third aspect of HRM issues and challenges in the new millennium is that of
globalisation. Global competition is here to stay. We have seen rapid growth in
emerging world markets. There are new standards of global competitiveness. Effi-
ciency and added value to goods and services are the benefit of this globalisation,
but it does complicate the job of the operations manager. How an operation makes
the transition from domestic to global to achieve its strategy requires careful
analysis. Some of the factors that should be considered include: the European Un-
ion, Positioning Strategies, Global Benchmarking, Competition, Cultural Impact
and Economic Impact.
As Jones (1998) explains in his book, the following points provide a prelimi-
nary perspective of the European Union. “It is unique, it is unfinished, it has been
an exercise in partial integration, its development has been very uneven, it has
been an elite project, it involves the intertwining of political and economic objec-
tives, it is a product of many influences, its central concepts are ‘fuzzy’, it involves
the tension between ‘intergovernmentalist’ and ‘supranational’ influences, and fi-
nally, it is the world’s most advanced project in regional integration.” In spite of
the nebulous condition of what the European Union is and where it is going, it has
had a significant impact upon world trade. There are many reasons why a domestic
business operation will decide to change to some form of International operation.
These reasons range from the tangible to the intangible.
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Management Research News
information. Many employees are concerned about how the Euro would affect the
way that they are paid and the benefits that they will receive. Employees are also
concerned how the Euro will impact on their company and the business that they
do. As companies speculate and react to changes in the European marketplace in
the years ahead, opportunities to introduce major changes in HR strategy will arise
(Roberts, 1999). It will be vital for the HR professional to be aware of these
changes and to use them to their best advantage.
Why are global operations important? There are a number of reasons why a
company would consider expanding their area of operation. Companies can real-
ise a reduction of costs, particularly those costs incurred by labour, taxes and tar-
iffs. They can also realise an improved supply chain along with a reduction of
risks. These reduced costs, along with the improved supply chain would permit
the organisation to learn how to improve operations and provide better goods and
services. Finally, multinational expansion would make it possible not only to at-
tract new markets, but also to attract and retain global talent as well. Globalisation
is also having a big impact on supply-chain management, human resource issues,
quality, positioning, location and process strategies. It is the Human Resource
professionals’ job to be able to supply the operational side of the business with em-
ployees capable of performing the requisite tasks involved in capacity planning,
location planning, operations scheduling, facilities and layout design.
In the past, the efforts of many companies to deal with a diverse employee
population were mandated largely by legal pressures or moral concerns in regards
to fairness. These issues of workforce diversity, although complex and compli-
cated now will become more of an issue for those companies operating on a global
scale. Successful organisations will react to diversity as the important business is-
sue it is by implementing proactive, strategic human resources planning. Short-
term strategies designed to circumvent the situation will keep an organisation
from effectively positioning itself in tomorrow’s world of cultural, gender, and
lifestyle diversity (Sims, R. and S. Sims, 1994). Yet another aspect of diversity
awareness is what a particular culture deems acceptable. Ethical considerations
such as the attitude towards employee theft and bribery can have significant im-
pact on the operations of a company. Companies must be aware of potential prob-
lems or situations and have a plan to deal with them.
Discussion/Summary/Conclusion
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Volume 22 Number 12 1999
What are the questions remaining? There are almost as many as when we
started. How will companies choose to deal with the issues that we have discussed
in the new millennium? There is much information to be assimilated when consid-
ering the problems facing Human Resource professionals in the future. How will
each of these three different yet inter-connected facets affect their choices? While
not having a crystal ball, we can make some generalisations.
* In regards to personnel issues and challenges, we have determined that
the most successful organisations will be the ones who can attract, de-
velop and retain individuals who have the ability to manage a global or-
ganisation that is responsive to customers and the opportunities being
presented by technology.
* The implementation of technology will continue to be a driving force in
the success of companies in the future. Firms that know how to use tech-
nology find it an excellent vehicle for obtaining competitive advantage
(Heizer, J. and B. Render, 1999).
* Globalisation is having and will continue to have a big impact on the ba-
sic issues of operation management; location strategies, supply-chain
management, human resource issues, quality, and process strategies.
We have learned that Human Resource professionals need to take a proactive
role in the success of their company. They need to examine the streamlining of old
processes to ensure that what is being built is a better solution, not just automation
of a broken system. In essence, the Human Resource professional must move from
“the back room” to the “board-room.” They need to emphasise the importance of
continuous progress and managing change through goal setting. Finally, we have
learned that empowered employees have proven to be more productive.
Welbourne and Andrews (1996) developed two scales, along with other fac-
tors, for explaining company survival. The information used in measuring the
firms’ management practices came from their offering prospectuses and thus is
publicly available. The first scale measured the value the firm placed on human re-
sources and was comprised of five items: (1) whether the company’s strategy and
mission statements cited employees as constituting a competitive advantage; (2)
whether the company’s materials mentioned employee training programmes; (3)
whether a company official was charged with responsibility for human resource
management; (4) the degree to which the company used full-time employees
rather than temporary or contract workers; and (5) the company’s self-rating of its
employee relations climate. The second scale measured how the organisation re-
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warded people; it was computed, using 10-1 code, by summing whether the com-
pany had stock options for all employees; stock options only for key employees
and management; profit sharing for all employees; profit sharing for key employ-
ees and management; and other group-based incentives, such as gain sharing.
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Volume 22 Number 12 1999
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