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The Human Resource Management Process

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The HRM Process 

In this particular segment, you will learn why HRM is imperative and what factors affect the HRM method.

There are three critical reasons for which HRM is essential. Here are the following

  • According to a lot of studies, HRM is one of the best sources by which you can gain com­­­­­­­­­­­petitive advantage. This fact is accurate for administrations and companies all around the domain. An extensive study done by the Human Capital Index showed that groups with people concerned with HR team have an edge and kick start towards glory for the company.
  • The second is that HR changes how the manager of a particular company thinks about its employees and also the working­ relationship between them. This is an important aspect because people without having a healthy relationship between the boss or the manager and their staff any company can flourish well. Few examples are W.L. Gore and Southwest Airlines.
  • The way the organizations manage or treat their employees has crucially affected the work practice at the office. Statistics show that the market value can significantly increase up to 30 percent if the work practices of a company are useful.

There is another study which tracks the returns of annual shareholder companies in the list of Fortune’s best 100 companies. These organizations have profoundly beaten the S&P 500 for nearly 10, 5, 3 and one year period. Several work practices which both leads to high organizational performance as well as high individual performance are known as high-performance work rehearses.

However, even if the company does not fulfill high-performance work practices, it should have other activities to ensure that the firm has qualified and talented individuals or employees who are able to take their work forward. The employees should have skills as well as recent knowledge as well as expertise which will give high returns on the investment made by the company.

Certain external factors, which influence the HRM procedure

Let’s discuss the factors with an example. Burns Harbor had an opening at the managerial assistant job which was paying $13 per hour. It is a trucking company nationwide. This job opening was opened on the afternoon of a Friday. However, by Monday when the head of recruiting for that company reached at work, there were already 300 applications for that position. As time grew, the number of applicants for that position rose to around 500 plus. However, the lucky one had to be chosen, a candidate who had been laid off from work last month impressed the recruitment officer so plentiful that the occupation was given to her. This lucky person has been selected, and the rest of 499 applicants were left behind which included many experienced personnel. Among them was anex administrator of human resource with a job experience at Deloitte and Touche, another was a former analyst at IBM. However, there are many more examples such as this. In a nutshell, due to the economic strike, job filling has turned into havoc.

The HRM Process 2Thus, the HRM is directly influenced by external environment. These factors include the worker labor unions, economy, regulations and laws of the government and also the demographic trends.


The economic recession has profoundly affected the HRM practices global. Previously, the Japan labors used to rely on just two things first is a decent job life and second is a dependable pension. However, the present scenario is a bit different, long term employment pan is back-dated, and all the pension strategies are disintegrating down. In the European countries, working members are anticipating that the rate at which workers are becoming jobless is bound to increase and Spain is the country which is going to be affected the most out of all.

Most of the current jobs which the workers have are either part­-time jobs, or on contract, there is hardly any full-time job nowadays. All those jobs which were vanished during the recessions were not imminent at all. Thus, the situation is not getting any better at all. However, plans are being made to replace these jobs with growing industries and other kinds of job in the near future.

A study called the Global Workforce Survey done by the global services company has established that the downturn has significantly transformed the way in which US employees visualize their leaders and work. These workers have lowered all of their expectations from their retirement and career. Such survey has made a significant impact on how the organization takes care of their human resource department.


This is one of the major ­­­­­­­factors which affect the workings of human resource management. One such instance happened in China where it strikes the factories of Toyota and Honda. This event puts light on the struggle of China with inequality of income, high property prices, and rising inflation. Previously the workers those who were pushed to work for 12 long hours a day for about six days in a single week and that too at low wages are backing out. Negotiations, labor disputes between the employees and managers are little of the dares companies had to face when the workforce became a union.

Let us properly understand what actually an employment union is. This basically is an association which represents workforces and tries to safeguard their interest through communal negotiating. In an organization such as these, several human resource management decisions are made by the labor union which usually states the recruitment sources, hiring criteria, promotions, eligibility for training, layoffs and other disciplinary actions. However, the proportion of workers those who are unionized are less in France.

In Japan, a percentage of 19.6 part of work force goes to a union; in the US 12.3 percent of the workforce is unionized. 27 percent of the ­­­­­­­­­­­workforce in Germany happens to be in a union. 75% of the labor force in Denmark is unionized. 30.4% in Canada, 27.4% in Australia and 19% in Mexico. The rate of this is declining in private inventiveness than that in public sector. In a nutshell, the labor union can affect the HRM, but a significant constraint is the governmental laws which are more prevalent in North America.

How is the legal atmosphere of the human resource management?

Things you can do and cannot do, as a manager of an organization is dependent on the critical rules of law and other regulations. A balance should exist between what the company head should and should not do and this falls in the territory of what is called the affirmative action. To makes these work effectively, several organizations in the US have action programs which help the employees in several manners. These take care of the upgradation as well as retention of the members from particular groups for example, females and minorities. In a nutshell, these laws look into the matters where they protect their employees against discrimination and looks forward constantly to boost the status and well being of the members.

However, this does not give their manager the freedom and will to hire just any employee whom they prefer or they are not free to promote any random employee and treat any employee in whatever mode they want. Therefore, on one side these laws have assisted to reduce the discrimination of the employees and on the other side it also keeps in check over the discretion of the manager over the decisions of HRM.


Among the any HRM laws and regulations, three are worthy of mentioning. One of these three has been contracted by the president himself and other two laws are still in the process of being discussed and argued by the Congress. These laws have the power to heavily affect the future practices of the HRM. First comes the ‘Patient Protection and Affordable Care Act’ also known as the ‘Health Care Reform Act.’ This came into force in March of the year 2010. People working in companies have stated to look through the law requirements and also they are trying to meet the deadline of the compliance. For example, one requirement that was disclosed speaks that by; every employee should put forward their benefit value which was provided in the year 2011 for the coverage of health insurance of each employee in the W-2s annual form. The other part of the commandment or the other side needs the employees to put forward their deadlines for supplementary information and also they need to provide testimony or information about possible violations of the Title 1 or first title of the rule.

The HRM Process 4There is another law, which is called the ‘Balance Award Act’, which still now is being debated by the Congress. The importance of this act is that it highlights the prominence of the flexibility issues at workplace.

The last importance law called the Employee Free Choice act is still stuck at the Congressional debates. If this law comes into force, then it will improve and revise the National Labors Relations Act and it will make it tranquil for the workers and employees to build a union.

However, what about the HRM laws throughout the entire world or globally. It is highly critical that managers at other nations be accustomed with the laws which are prevalent there. You will get a brief idea about the centralized law making in countries like Mexico, Canada, Germany and Australia.

The Canadian Laws being practiced there closely relates to that in the US. The Human Rights Act prevents discrimination of the employee against religion, race, marital status, age and mental or physical disability. This act is being forced all through the country and is a little bit different than that the US, because in the regional level, the law is much more decentralized. For instance, one of the major drawbacks is that, discrimination based on dialectal is not forbidden in anyplace of Canada other than Quebec.

You shall not find that much employee union in Mexico than you may find in the United States. In Mexico, a rule states that the evaluator has only twenty eight days in his hand to evaluate the work performance of an employee, after which he is guaranteed a job and termination of that, becomes an expensive affair. The punishments to those who have violated these laws is great, it might sometimes result is heavy fines and sometimes even jail verdicts sometimes for the rest of their lives if they cannot pay their fine. These matters regarding the labor are taken care by the Mexican Federal Labor Law.

It was only during the year of 1980 when Australia first enacted its discrimination laws. These laws are mainly centered against women discrimination, in spite this Australia still seems to fall behind America in terms of gender opportunities especially for women. The ratio of workers union to managers in much higher thus it has significantly reduced the grip of managers over the working class labor in Australia. In the year of 1997 Australia refitted the relation between the labor and industries with the mind set to increase the productivity and reduce the power of labor unions. A bill called the ‘workplace relations bill’ gives freedom to the employer to negotiate with the workers regarding their benefits and pay hour.

Another example with regard to these laws is Germany. The practices of the HRM here is very similar to those of the countries in Western Europe. The primary goal of these laws is to distribute the power nicely within the association. Thus, the labors, is at par with the stockholders and the management. Board legislative body and work councils are two of the most common representative participation forms. The aim of the work council is to link the management and the employees whereas, board agents are those who sit at the board council and decide on the firm’s interest and its employees.


Back in the year of 2007, BMW’s head was very worried about the production and there was an inevitable decline in the future of power train industry in the area of Dingolfing, in Lower Bavaria. The main reason behind this decline was due to the high average age of the workforce. They head of the company consulted with the workers and made some physical variations to the working area which will reduce the working stress of employees effectively. Certain changes made were wooden floors, special kind of chair meant to sit down and relax for short time periods. This would inevitably reduce the strain on the body of a worker.

Majority of the changes that were made in the year in previous fifty years can be accredited towards the federal legislation that was put forward in the year of 1960 which banned discrimination towards employees. With the introduction of these, new possibilities unlocked up for female and minority people. In the endportion of the 20th century, these two groups of people made some drastic changes in the workplace. 49.1 percentage of the job opportunities are now made for women. Trends in workplace is notable in the initial half of this century is distinct for three different reasons. First is the changes in ethnic and racial composition, second is the generation of baby boom and the third is the expansion of Generation Y employees. by the year of 2050 the workforce at Hispanics will cultivate from 13 percent to approximately 24 percent, the percentage of black people will also grow from 12 percentage to about 14 percent, the percentage of Asians are also bound to increase from about 5 percent to around 11 percent. The workforce is constantly aging and it is estimated to increase to 20 percent by the year of 2014.

The workforce analyst has pointed out four-age bracket that is working together in an organization. These are as follows:

  • Six percent of the workers are made by the most knowledgeable workers. They were born even before the year 1946.
  • The so called baby boomers cover 41.6 percentages of the employees; they were born between the years of 1946 to 1964.
  • Around 29 percentages of the employees are made by the Gen Xers who were born between 1965 and 1977.
  • Another 24 percent of the working employees are made by the Gen Yers; they are born between the year 1978 and 1994.

These trends are critical because they show how the HRM practices are being affected by it and also how they are going to affect in the future.


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