Lecture 3: Environment of HRM

6/5/20162 Environment of HRM  Environment of HRM includes all those factors which have bearing on the functioning of HR department.  These forces can be divided in two categories, i.e. External Forces and Internal Forces.

6/5/20163 Utility of Analyzing the Environment  To become proactive and not remain reactive to the environment.  Reactive strategy are useful in stable and competition less environment.  Today’s environment is characterized by intense competition and change where proactive steps are vital to survive.

6/5/20164 HRM CulturalUnions Strategy, leadership Task Org. Culture Professional bodies Political & legal EconomicTechnology HRM and Its environment

6/5/20165 Environmental Forces External Forces  Political-Legal  Technological  Cultural  Economic Internal Forces  Unions  Strategy, Task & Leadership  Organizational culture & conflict  Professional Bodies

6/5/20166 Political-Legal Forces  Plethora of Labour laws related to employment, working conditions, pay & wages, and laws related to industrial disputes.  Which political party is ruling. Different parties can have a different outlook.

6/5/20167 Economic forces  Economic growth, industrial production, agriculture, population, national and per capita income, money and capital markets, suppliers, competitors, customer and industrial Labour are the components of economic environment.

6/5/20168 Economic forces relevant to HR  Suppliers  Competitors  Customers  Economic growth  Industrial Labour

6/5/20169 Technological  Jobs tend to be more intellect.  Obligation of HRM to train workers acc. to new technology and to rehabilitate those who can not be trained.  Workers acquaint with new technology are more demanding.  Technology has impact on human relations.  Job holders have become highly professional and knowledgeable.

6/5/ Cultural Forces  Culture refers to complete whole which includes knowledge, belief, art, morals, laws, customs, and other capabilities & habits acquired by an individual as a member of society.

6/5/ Strategy, task & leadership  Alignment between the strategy, structure, people, and management is important for organization’s success.  Nature of task/ job also affects HR in terms of hiring, compensation, training etc.  Leader also impact any of function area of organizations.

6/5/ Unions  Unions are considered a part of internal as well as external force in an organization due to its affiliation from outside political parties.  Unions have influence on all HR activities right from hiring to separation.