Month: December 2020

1. Lack of Support:

People think that the human resource planning is unnecessary and time consuming. Workforce can be arranged anytime at the time of requirement, with attractive benefits and incentives so why human resource planning. They think it is an easy task to manipulate the workforce in the organization.

2. Wrong Perception about Human Resource Practitioner:

In this competitive business world, it is very difficult and challenging to compete with the rivals without formulating proper strategic plan. Many have the perception that the people who formulate the human resource plan are not expert in business, as a result of which they may commit error while formulating the human resource plan.

3. Incompatibility of Information:

A strategic plan is set for achieving the long-term goals or objectives of the organization. At the time of formulation of strategy, the used information is basically long term oriented. But the human resource planning is formulated using the short-term information. So, the information of human resource does not often match with the information of strategy formulation.

4. Approach Confliction:

While formulating human resource planning the organization must consider that how many people and how efficient people are needed for the smooth functionality of the organization. Many human resource practitioners give emphasis on number of employee and many other give emphases on the quality of the employee.

But both the approaches are equally important for the organization.

5. Absence of Operating Managers’ Co-Ordination:

Human Resource planning is one of the major functions of Human Resource department of every organization. Successful planning depends on the co-operation of all other existing departments. Mainly the operation managers’ coordination and support play very vital role in the success of human resource planning. But very often things do not go in right direction.

Main problems in the process of Human Resource Planning are as follows:

(i) Employees Resistance:

Many of the employees in India do not have faith in adopting manpower planning as a strategy to achieve objectives. Many business houses are planning to adopt more and more scientific techniques and using human resources with as much care as they give to physical and financial resources.

Employees and trade unions feel that due to widespread unemployment people will be available for jobs as and when required. Employees may also resist resources planning feel that it increases cost of manpower.

(ii) Time Consuming and Expensive:

Manpower planning is a time consuming and expensive method. A good deal of time and cost are involved in data collection and forecasting.

(iii) Uncertainties:

Absenteeism in India is quite high and trend shows that it has increased in the past few years with the result that it has assumed considerable magnitude in determining manpower requirements.

(iv) Inefficient Information System:

In Indian industries human resource information system has not fully developed. There is no reliable data due to which it is not possible to develop effective human resource plans.

(v) Inaccuracy:

Human resource planning involves forecasting the demand for and supply of human resources. Therefore, it cannot be a cent percent accurate process. Longer the time horizon, greater is the possibility of inaccuracy. Inaccuracy increases when departmental forecasts are merely aggregated without critical review.

(vi) Under Utilization of Manpower:

The greater obstacle in the case of manpower planning is the fact that industries in general are not making use of their manpower to the optimum degree and once planning starts, it encounter heavy odds in stepping up utilization.

(vii) Lack of Education and Skilled Labour:

The extent of illiteracy and the slow pace of development of skilled categories, account for low productivity in the labour force. Low productivity has implications for manpower planning.

(viii) Unbalanced Focus:

In some companies human resource planning is used as a number’s game. There is too much focus on the quantitative aspect to ensure the flow of people in and out of the organization.

Such an exclusive focus overlooks the more important dimension, i.e., the quality of human resources. Career planning and development, skill labour, morale etc. are likely to suffer due to such unbalanced approach to human resource planning.

Overcome

(i) Adequate Organization:

Human resource planning function should be properly organized. A separate cell, section or committee may be constituted within the human resource department to provide adequate focus, and to coordinate the planning efforts at various levels.

(ii) Organized System:

Human Resource Planning function should be properly organized. A separate section may be constituted within the human resource department to provide adequate focus, and to coordinate the planning efforts at various levels.

(iii) Support from Top Management:

Before starting the human resource planning process, the support and commitment of top management should be ensured. Moreover, the exercise should be carried out within the limits of a budget.

(v) Proper Information System:

An adequate Information system should be developed for human resources to facilitate human resource planning.

(vi) Tailor Made:

Human resource plans should be balanced with the corporate plans of the enterprises. The methods and techniques used should fit in the objectives, strategies and environment of the particular organization.

(vii) Appropriate Time:

The period of a human resource plan should be appropriate to the needs and circumstances of the specific enterprise.

(viii) Greater Participation:

Greater participation of line managers at all levels in Human Resource Planning process should be there.

(ix) Flexibility:

Enough flexibility in Human Resource Plans to take care of changing situations.

(x) Proper Focus:

The quantity and quality of human resources should be stressed in a balanced manner. The focus should be on filling up future vacancies with right kind of people who can help in achieving the objectives of the organisation.

The following factors will influence the HR policies of an organization:

Laws of the country

The various labour laws and legislation pertaining to labour have to be taken into consideration. Policies should conform with the laws of the country, state, and/or province otherwise they are bound to cause problems for the organization.

Social values and customs

Social values and customs have to be respected in order to maintain consistency of behavior throughout the organization. The values and customs of all communities should be taken into account when framing policies.

Management philosophy and values

Management philosophy and values influence its action on matters concerning employees. Therefore, without a clear, broad philosophy and set values, it would be difficult for employees to understand management.

Financial impact

HR policies may affect productivity and an organization’s overall finances if they create unnecessary burdens or red tape for the organization’s workforce. Organizations may also want to consider how realistic it is to enforce a policy fairly or keep it up-to-date as these have the potential to create issues amongst employees.

Factor 1. Company Business Policy:

After having designed a business policy, a company would want to ensure that it has the right number of employees with the right type of skills and commitments to carry out the policy. It would also like to close the gap between the required number and the qualities of employees and the available number and qualities at the shortest possible time.

In other words, a company’s human resource policy is designed with the objective to execute its business policy irrespective of whether it is market driven or resource driven. It should be kept in mind that the execution of a business policy becomes easy when at the first place it is formulated taking into account the company’s internal human resource environment, its strengths and weaknesses adequately.

In the absence of such integration of human resource assessment with the business policy design, an organization may find that despite a very well-designed business policy the business outcome of the organization is far from satisfactory.

The problem with such business policies is that because the company did not consider the internal organizational structure, employee competencies, their culture and beliefs adequately, the post-facto alignment of human organization with its business goals becomes very difficult if not impossible. The more is the number and variety of employees in an organization, the more would be the level of difficul­ties that the organization is likely to face in shaping its human organization to meet its strategic require­ments.

Example: Let us take the case of a manufacturing company that uses lots of purchased items in its production and assembly shops. Over a period of time, it finds that its economic space is shrinking due to the entry of new players. To stay alive, the company decides to cut its operating cost substantially. It finds that most of the new players in the industry are already using SAP (Systeme, Anwendungen, Produkte or System Application and Products) technology to manage their supply chain and are reaping good benefits of reduced operating cost and more effective stores management.

However, the company took a lot of time in deciding to adopt the SAP technology because it was worried over the lack of managerial expertise to use SAP technology. It checked with a vendor who was willing to supply the SAP package and as a part of the contract was willing to provide the required training to all its man­agers. The company went ahead and signed a contract with the vendor for a year to impart SAP training to all of its managers who comprised more than 1000.

What happened was that even after the training was successfully completed by the vendor and all the trained managers went back to their respective po­sitions, no more than 50% of the managers were using the SAP technology. The question is what went wrong?

In organizations where business policies are driven by employee strengths in terms of their un­derstanding of business opportunities and their confidence to cope with the challenges of creating a niche for themselves, the task of executing a business policy becomes much easier. It becomes easy because the business policy has already factored the areas of organizational issues that could pose a challenge and made adequate resource provisions including the time to achieve the business goal.

Factor 2. Social Forces:

Social forces and their effects on the supply of educated and experienced manpower in the economy are important considerations that a company has to take care while formulating HR policies and strategies. A policy which may appear very appropriate from the business point of view may be non­-executable because the manpower supply position of the market is quite inadequate.

Similarly, certain types of rewards and incentive policies which may appear very attractive because they have been tested in organizations in other countries may turn out to be quite inappropriate in one’s organization because they are not well aligned with the cultural beliefs and values of the employees. A workforce with varied ethnic background poses another challenge and obstacle in implementing a very individual- oriented performance management system.

Factor 3. Regulatory Forces:

The HR managers when designing HR policies should be fully conversant with the existing labour regulations. A good number of regulations aim at protecting the workers from undue hardship and strain.

It is important that the strategic design of a HR policy takes the extant of labour regulations into account lest unwarranted labour query and interventions from labour commissioner and/or judiciary come in the way which may not only delay the implementation of certain HR policies but in a worst-case scenario damage a company’s reputation very severely.

Factor 4. Technological Forces:

Due to availability of information technology and communication system, new types of HR policies, and practices are emerging. When others are already using a new technology and are executing employment contracts with the new technology, its non-use in a com­pany is likely to make the operating cost higher than those of its competitors.

As such when strate­gically designing the HR policy, the company should consider the emerging technological scenario and opportunities that such change may provide in all important areas of HR functions.

Factor 5. Competition and Competitor Behaviour:

While designing HR policies, labour market conditions and employment practices of competitors are important considerations to be taken care of. Under conditions of tight labour market, a company may have to adopt a very flexible approach. It must be willing to spend more for maintaining a stable workforce and motivating the employees for higher work effort.

On the other hand, workers of an or­ganization may show higher receptivity to tough employment condition when overall labour demand is low and not much new business investments and opportunities are coming in the neighbourhood.

The presence of a good number of strong competitors for manpower could be a threat to one’s own policy as well as opportunity to experiment with new types of employment practices. A company could learn from the successes and failures of new HR initiatives and experiences of others. It could even use others’ practices as a justification and selling point for a new policy.

Example: A few decades back temporary employment practice as an HR policy was totally unacceptable to labour unions in India. Many of them went on strike and resorted to other forms of disruptive activities. But now we see temporary employment practice has become the standard business practice with little resistance from the labour unions.

Factor 6. Internal HR Environment:

The external human resource environment is an important factor that helps in shaping the human resource policies of a company. However, an HR policy shaped entirely by considering the character­istics of the present external human resource environment and company business goals may not yield much worthwhile business result for a company that has been working for a good many years with a completely different HR system.

When designing any new HR policy an assessment should be done of the internal HR environment of the company including the expectations, beliefs, and values of the employees who got used to certain kind of HR services from their managers.

The areas of internal HR environment critical to the success of any new HR policy are employee number and their com­petencies, organizational structure and power relations between different groups, employee belief, value and organizational culture, managerial experience, expertise and philosophy on the use and role of HR.

HR Policies Options

The HR strategy or HR policy of an organization emerges after considering six factors:

(i) Company business strategy

(ii) Labour market competition

(iii) Labour market regulation

(iv) Social forces

(v) Technological forces

(vi) Company internal HR environment.

Then what are the possible HR policy options that an organization can pursue to achieve its long-term business goals.

Some of these policy options are as follows:

1. Strategy on employment contract: Short-term employment, contract employment, long-term employment.
2. Strategy on employee number: Manpower expansion, manpower contraction, selective area spe­cific expansion and contraction.
3. Strategy on manpower variety: Diversity of age, gender, ethnic background, learning background.
4. Strategy on HR system: Selective expansion along specific areas of HR systems.
5. Strategy on work system: Functional separation to integrated system, mixed system of functional separation and integration.
6. HR strategy to meet generic business strategy: Cost leadership, differentiation, and focus.

The design, delivery, and goal of HR services under each of these strategies are different.

HR policies may be of two types, namely formal and informal. About informal HR policies, Michael J. Jucius has rightly observed that many personnel policies undoubtedly have just grown. In such instances, everyone seems to know, without being told and without knowing where it originated, that a certain type of decision will be made in certain situations. Such policies are informal, and as such their framing or establishment cannot be analysed.

However, some useful comments can be made about formal policies.

Most of the HR policies should be framed by the higher level of management with the advice and assistance of staff of the HR department. Framing of HR policies is also affected by the consultation and advice of employees, day-to-day problems by the management, social and political changes, international happenings and so on.

It is the responsibility of an efficient and effective HR manager to frame HR poli­cies and make necessary changes and amendments from time to time, whenever necessary. In the fram­ing of HR polices, weightage should be given to the views, advice and suggestions of such people who are likely to be impacted by those HR policies.

Such people make a lot of relevant information available for the formation of HR policies. When the rough draft is made, it should be sent to the representatives of employees, departmental heads and experts for their perusal, comments and suggestions, if any.

Maximum attention should be paid to the comments, criticism and observations made by the employees because these are the people who are most effected by HR policies. Then ultimately, the HR policies should be finally drafted and declared. There is every justification for framing the HR policies by the higher level of management in consultation with other agencies.

It brings consistency and uniformity in the decisions and actions of the Organisation. It can be illus­trated with an example. Take the matter of awarding punishment for the acts of indiscipline. In an Organisation, practically every executive has to take disciplinary actions at one time or another.

In case there is no HR policy laying down the nature and quantum of punishment for different types of acts of indis­cipline, every executive will have to use his/her own discretion in awarding the punishment. Obviously, it will differ from executive to executive, and cases will not be wanting in which the nature and quantum of punishments may differ widely, though the offence may be the same.

This may lead to discontentment among employees and, thus, may prove an obstacle in the way of the accomplishment of the desired objectives of the organisation. Hence, it will be a better proposition if policies on such matters are framed by higher-level management to cover all parts of the organisation so that there may be uniformity and consistency in the decisions and acts of the management.

While framing HR policies, we should also keep in view the objectives, cost and utility of the policies as also the reaction of trade unions. The successful implementation of a policy needs the sincere coop­eration of trade unions. Hence, trade union leaders should also be taken into confidence while framing HR policies or for that matter any policy.

The principles of justice, democracy and equality, and the recognition of the needs of employees, should also be taken care of in the preparation of HR policies. The policies framed having kept in view the aforementioned points, more often than not, prove effective.

Once the HR policies are framed, there comes the problem of their transmission and application. As a matter of fact, it is the middle management and the first-line supervisors who will be more concerned with the transmission and application of HR policies.

Middle management should be responsible for communicating the policy formulation to operating levels. Here, communication involves a lot of functions such as interpretation of policies, clarification of areas of uncertainty and misunderstanding and also imparting training to lower-level staff in policy application.

Formulation of HR policies considers a number of factors- organizational philosophy, HR philosophy, external factors, and internal factors. When all these factors are taken into consideration, there may be a number of policy alternatives in relation to a particular matter, for example, recruitment, development, compensation, etc. That alternative is chosen which matches with the maximum number of factors.

After the choice, a policy is put into action and its results are known. If the policy is workable, it is adopted as a long-term measure. However, each policy should be reviewed periodically to incorporate necessary changes because of changes in any of the factors influencing HR policies.

1. Organizational and HR Philosophy:

Organizational philosophy is based on the philosophy of those who create and manage an organization. Philosophy is the set of beliefs and assumptions about how things happen and how they should happen. HR philosophy is derived out of organizational philosophy which reflects the approach that would be adopted in managing human resources in the organization.

2. External Factors:

HR polices are formulated not in vacuum but take into consideration various external factors on which the organization does not have control. These external factors are government’s policy towards management of people in the form of various relevant laws, guidelines, and other specifications; nature of competition for human resources, socio- cultural attitudes towards work, productivity of human resources, and image of the organization in the human resource market.

3. Internal Factors:

Besides the external factors, there are various internal factors in the organization which influence the applicability of a particular HR policy. These factors are the nature of work in the organization — a computer software company may not have the same HR policies as a manufacturing organization with low-level technology, sudden change in the organization like large-scale diversification or contraction of business activities, pressures from trade unions, etc.

4. Policy Alternatives:

When these factors are taken into consideration, various policy options may emerge on a particular issue. For example, when a vacancy arises at a middle management, the issues that emerge are- whether the position should be filled-up by promotion of internal person or it should be filled-up by appointing a new manager.

If the policy states that the position should be filled-up by internal promotion, another issue arises whether the promotion should be made on the basis of merit or seniority and defining the yardsticks for measuring merit or seniority. Similar such issues arise on other matters too.

5. Policy Choice:

The identification of various policy alternatives leads to the level where managers can consider some alternatives seriously and choose one of these which is most acceptable in the light of various factors which influence the workability of HR policies. The chosen policy is not necessarily the best one but it is best one in a given situation. That is why it is referred to as the most acceptable one.

6. Policy in Action:

When a particular policy is chosen, it is put in action for the guidelines to managers concerned and results are obtained. If the results are in accordance with the objectives of the policy, the policy is workable. However, if the results do not match with the objectives, the same process of policy formulation proceeds with new information inputs regarding all those factors which influence applicability of HR policies.

7. Review:

HR policies are formulated in the light of given situation. However, the situational variables are not static but they are dynamic and change with the time. Therefore, in order to integrate these changes, there should be periodic review of HR policies in the light of these factors and suitable changes must be incorporated.

For example, when Madura Garments, a division of Madura Coats, was taken over by Kumarmangalam Birla Group, many managerial personnel left the division which created a managerial vacuum and employee morale turned to be quite low.

In order to rebuild the division, many actions were taken in which change in compensation was one of these and there was a hefty salary hike of 50-60 per cent of all employees.

Because of changed situations, Hindustan Unilever, once the choice employer of managerial talents, has incorporated many changes in its HR policies to attract and retain managerial talents such as provision of 2-3 months training abroad for all new recruits in management cadre, direct entry of experienced managerial talents at the middle management level, offering of stock option scheme, and special emphasis on recruiting woman employees.

Regarding the form in which HR policies should be communicated, it may be mentioned that many policies are stated in oral or may be informal, but it is better if policies are in writing. Written policies are definitely an improvement over oral or informal policies. There is no doubt that written policies need more time and labour to prepare, but they are worth it, because written policies impart precision, permanence and ease of transmission.

They can be produced for auditing or evaluation whenever required without any loss of time. They can also be used as training manuals. Hence, it may be suggested that it is always desirable to prepare policies with a careful selection of words and having clarity and should be in printed form.

So far as the line supervisors are concerned, they should be responsible for applying HR policies. In some cases, the HR department should also be responsible for applying HR policies in their respective fields.

(i) Facilitates decision-making. Policy helps managers at various levels to act with confidence without the need of consulting the superiors every time. It gives them alternatives to choose from.

(ii) Promptness of action: When situations arise that call for decisions, policy will ensure prompt action within the overall framework of the objectives of the organisation.

(iii) Consistency of action: Effective policies ensure uniform and consistent treatment of all employees throughout the organisation. Sound personnel policies are, therefore, an essential base for sound personnel practices. Policies provide the base for management by principle as contrasted with management by expediency.

(iv) Continuity and stability: Written policies are a means of transmitting the company’s heritage from one generation of executives to another. There would be stability in decision making in the organisation even if some key executives retire or leave the organisation.

(v) Better control: Policy provides a rational and continuous system of achieving results which facilitates better control.

(vi) Eliminates personal hunch and bias: Clearly laid down policy liberates decision-maker from his personal bias and self-interest.

(vii) Welfare of people: By removing momentary and hasty decisions, policy ensures long-term welfare of people involved in the organisational activities.

(viii) Confidence in employees: Policy makes the employees aware of where they stand in relation to the organisation. This will create confidence in them.

Limitations of HR Policies:

HR policies may suffer from some limitations which are as follows:

(i) Policies are repeatedly used plans. They bring about rigidity in operations as they leave no room for initiative by the subordinates.

(ii) Policies may not cover all the problems. Sometimes, unforeseen situations arise which are not covered by the existing policies.

(iii) Policies are no substitute for human judgement. Policies only delimit the areas within which decisions are to be made.

(iv) Policies may not be ever-lasting as they lose their utility with the changes in the internal and external environment of the business.

Effective HR Policies

For making the HR policies more effective, it is necessary that they are established in accordance with good standards. They should be reviewed from time to time. There should be a set of standards to check the effectiveness of a particular HR policy.

Michael J. Jucius has suggested some guidelines to check whether a policy will be effective or not.

According to him, the checks or guide­lines may be whether the policy is based upon a careful analysis of the objectives and ideals of the com­pany; whether it is definite, unambiguous, complete and accurately stated; whether it is reasonably stable and not subject to change because of temporary changes in existing conditions; whether it has sufficient flexibility to handle normal variations in changed conditions; whether it is related to policies of other sections of the company so that proper balance of complementary policies is established; and whether it is known and understood by all who must work with it or are affected by it. In case the answers are in affirmative, it means the policy would be good and vice versa.

HR policies must match employee expectations. Policies aiming to cultivate inclusion must match up with the daily reality of employees.

Through its new research report, ‘The Day-to-day Experiences of Workplace Inclusion and Exclusion’, Catalyst, a USA-based non-profit organisation that promotes inclusive workplaces for women, discov­ered three critical lessons about employee experiences:

(a) inclusion and exclusion happen at the same time for many employees

(b) inclusion is really difficult to grasp and define.

(c) exclusion is powerful and easy to recall.

Through its cross-regional study, the report captures the voices of employees across 42 organisations in 5 countries Canada, China, India, Mexico and the USA to better understand their everyday interaction. The three critical lessons Catalyst discovered often create a dilemma for many leaders because they must both create inclusive cultures while rooting out exclusionary behaviours.

HR policies should also be periodically reviewed. This will help determining which HR policy needs to be dropped or changed or whether there is a necessity of having an additional policy.

For this, Michael J. Jucius has suggested a variety of appraisal methods such as all policies should be subject to some, if not extended, evaluation annually; some policies should be reviewed at specific times such as when collective bargaining agreements must be renegotiated; policies of each department may be reviewed when budgetary requests are made; spot or overall appraisal of policies may be made by out­side consultants (this could be done after trouble develops, but preferably, it should be a constructive preventive measure); policies should be subject to review when the desirability is indicated by employee suggestions, employee grievances or unsatisfactory reports on employee performance or behaviour; and policies should be subjected to review whenever a company plans a major expansion or contraction, a change to a new location or a change of methods.

Thus, we find that Michael J. Jucius has very aptly suggested certain tests to check if the policy will prove good or not. Similarly, a variety of appraisal methods suggested by him for effecting periodical review of policies and introducing changes wherever necessary have got immense practical utility.

Advantages

The following advantages are achieved by setting up HR policies:

• They help managers at various levels of decision making to make decisions without consulting their superiors. Subordinates are more willing to accept responsibility because policies indicate what is expected of them and they can quote a written policy to justify their actions.
• They ensure long term welfare of employees and makes for a good employer-employee relationship as favoritism and discrimination are reduced. Well-established policies ensure uniform and consistent treatment of all employees throughout the organization.
• They lay down the guidelines pursued in the organization and thereby minimizes the personal bias of managers.
• They ensure prompt action for taking decisions because the policies serve as standards to be followed. They prevent the wastage of time and energy involved in repeated analyses for solving problems of a similar nature.
• They establish consistency in the application of the policies over a period of time so that each one in the organization gets a fair and just treatment. Employees know what action to expect in circumstances covered by the policies. Policies set patterns of behavior and permit employees to work more confidently.