Human Resource

Management in 21 st

Century
GROUP A9
Siby P Daniel
Subrahmanya Rao
Anuradha Sultane
Supriya H G
Suresh S
Swati Bansal
Topics to be covered
Introduction

Employees-Intellectual capital-Manage

strategically
Changes in world

A case - Managerial Misclassification

INTRODUCTION
Human resource management consists of

Attraction

Retention

Motivating

Disciplining

Selection

Utilization

Rewarding
 
MANAGEMENT OF INTELLECTUAL
CAPITAL
Shift in economic activity
Agriculture manufacturing services
Companies compete based on human capital rather
than physical capital(hard assets)

Employees(people) are viewed as resources

 Active management positively contributes to
organizational success

Human resources similar to customers, financial

resources, operating systems and technology
 Constituting main input into organization
 Change in employment
contracting
Previous scenario
 
Continuous employment contracting
 Implicit employment
 Employees worked continuously for a single employer

 Received pension benefits after retirement

 Mutual and reciprocal obligations

 In initial period employers gained an economic rent
 employees were paid less than the value of their productivity

 In later period employees gained an economic rent

 employees were paid more than the value of their productivity

 Laying off & rehiring of employees

 
New scenario
 Employee quit rates rose markedly

 Frequent job changing(even job hopping)

 Employability

 Employees were paid the value of their productivity at

any point in time
 Reducing workforce to achieve long term, permanent
labor cost reductions.
 Change

Implicit long term employment contracting

↓
Shorter term, commodity type labour
contracting (through outsourcing)

 
Reasons for changes
Global economic competition

Deregulation

Technological change

Increased product and labor market competition

 De-
Unionization

Previous scenario:
 Strong unions and collective bargaining

 Mainly in companies having monopoly

 Work terms and conditions were on negotiated

basis
Present scenario:

Decline of private sector unionization & collectiv`e

bargaining
Fewer people joined unions

Companies moving operations offshore

Decrease in labor relations department

Increase in HR department
 Bundling of HR management practices

 Positive effect on financial performance

High Low
Involvement Involvement
 Comparison
High Involvement Low Involvement

Job Security Present Absent

Employment Long Term Short Term

Duration
Employment Selective Hiring Outsourcing,
Procedure Employment
Contracting,
Vendoring
Realisation of gains In Long term In short term

Organizational Achieved by Achieved by

performance Investment in reduction in labour
intellectual capital costs
The proper balance between

High involvement HRM practices

 Low involvement HRM practices

Practices for Resolving
Employee Disputes
“Conflict is an Enduring, ever- present characteristic of employment
relationships”
(Colvin, 2004)

Employee related conflict in organizations is not affected by

decline in unionism
 
HRM Role -
Understand nature of such conflict
Evolve practices to resolve conflict
Measure effectiveness of such practices
Comparison of Unionized and Non Unionized
Alternate Dispute resolution Systems
Unionized ADR Non Unionized ADR
Systems Systems
Grievance steps. Determined by both Determined solely by
Speed of grievance employees and employer. Its’ One-
Settlement employers sided’ and Unfair
Scope of grievance
related issues
Grievance Filling rates Higher Lower (approx 50%
less)
Third Party Arbitration In most cases In very few cases

Eligibility to use Only employees Scope is wider

grievance procedures represented by unions

Post Dispute Not considered Focus on Post

Resolution Outcomes Dispute Resolution
Outcomes .
 Post Dispute Resolution Outcomes
Comparison
Prior to Grievance Post Grievance Settlement
Settlement
Measures Non Grievance Non Grievance Filers
Grievance Filers Grievance
Filers Filers
Job performance Similar Similar Higher Significantly
ratings Lower

Promotion rate Similar Similar Higher Significantly

Lower
Work Attendance Similar Similar Similar Slightly Lower
rate
Job Turnover rate Similar Similar Similar Significantly
( 1-3 years) Higher
Explanation of findings
Retaliation explanation
Consistent with Organization Punishment/Industrial  
Revealed performance explanation
Consistent with Shock Theory of Unionism
 Post Dispute Resolution Outcomes

 Inference

As Non union ADR systems are reactive in nature, their use is –

 
Leading to Further deterioration of employment relationship than
resuscitation of such relationships
 
Original purpose of adopting Dispute resolution Systems – Not met
 

Need for Proactive employment dispute

identification, diagnosis and resolution
Post Dispute Resolution
Outcomes
Implication

If Human resources are to be used for competitive advantage,

HRM in 21st Century will require

Deeper thought,

Theory development,

Empirical research and

Clinical insight than before

Case Study – Managerial
Misclassification
Case-

In retail and restaurant industries, employees holding

managerial job titles such as
Store Manager, Department Manager, Location Manager Etc’
Perform
Employee rather than Managerial work.
But are Paid
Annual salaries rather than the preferred hourly wages.
 
Misclassification cases filed against employers argue-
That these employees should receive
hourly pays and also overtime pay for working hours>8
as they are doing employee work
 
Case- HR Perspective

Key Question

“Why Managerial Misclassification

cases exploded?”
Answer lies in 3 parts

1>In start –up phase of an enterprise, mangers managing the few

locations and facilities predominantly do managerial work.
 
2> As businesses grow larger Strategic, Organizational, SCM
initiatives take decision making responsibility away from store
level to higher levels.
 
3>Compensation = Base salary + bonus
Bonus = Budgeted Labour cost – Actual labour cost
  Store managers have a clear incentive
To substitute their’ labour’ for hourly paid labour of their
employees

Are Misclassification cases a result of different Strategic

initiatives on part of companies?
 Yes,
As Companies have failed to address change in lower level
management jobs emanating from well-meaning and well-
founded strategic initiatives.
 
Success of an enterprise lies in
Ability of organization to Anticipate and deal with such cases

If HR executives had a seat at the business strategic

table
 Conclusion
HR is a strategic business function that should be a business
partner in the same way as
Finance
Marketing and
Operations are business partners in an enterprise.

As businesses compete on basis of their intellectual /

human capital
21st century is for HR functions and HR leaders
to keep their eye on prize of strategic role in businesses
while also performing necessary operational roles