CHAPTER 1: HUMAN RESOURCE MANAGEMENT
Human Resource Management: The Challenges
The major HR challenges facing managers today can be divided into three categories:
environmental challenges, organizational challenges, and individual challenges.
The environmental challenges are rapid change, rise of the Internet, workforce diversity,
economic globalization, legislation, evolving work and family roles, skill shortages, and the rise
of the service sector. The organizational challenges are choosing a competitive position,
decentralization, downsizing, organizational restructuring, the rise of self-managed work teams,
the increased number of small businesses, organizational culture, advances in technology, and the
rise of outsourcing.
The individual challenges involve matching people with the organization, treating employees
ethically and engaging in socially responsible behavior, increasing individual productivity,
deciding whether to empower employees, taking steps to avoid brain drain, and dealing with
issues of job insecurity.
Planning and Implementing Strategic HR Policies
When done correctly, strategic HR planning provides many direct and indirect benefits for a
company. These include the encouragement of proactive (rather than reactive) behavior, explicit
communication of company goals, stimulation of critical thinking and ongoing examination of
assumptions, identification of gaps between the company’s current situation and its future vision,
the encouragement of line managers’ participation in the strategic planning process, the
identification of HR constraints and opportunities, and the creation of common bonds within the
organization.
In developing an effective HR strategy, an organization faces several challenges.
These include putting in place a strategy that creates and maintains a competitive advantage for
the company and reinforces the overall business strategy, avoiding excessive concentration on
day-to-day problems, developing strategies suited to unique organizational features, coping with
the environment in which the business operates, securing management commitment, translating
the strategic plan into action, combining intended and emergent strategies, and accommodating
change.
A firm’s strategic HR choices are the options available to it in designing its human resources
systems. Firms must make strategic choices in many HR areas, including work flows, staffing,
employee separations, performance appraisal, training and career development, compensation,
employee rights, employee and labor relations, and international management.
