ASSIGNMENT COVER SHEET A. Student to Complete Office Use Only Student Number z3091427 Date Received Title First Name Family Name Mr Joel Judge Class No. Course Assignment No. Due Date 03-281 Strategic People Management 1 1 September 2003 Class Facilitator No. Pages (incl Appendices) No. Words (excl Appendices) John Holt 10 2150 Comments Subtracted all in-text references (Smith 1999, etc..) to roughly estimate word length. Declaration I hereby declare that the work contained in this assignment is my own, and not transcribed, paraphrased, or otherwise copied from other sources except where this is clearly acknowledged. (Note that the University provides for severe penalties in the case of plagiarism. See http://www.student.unsw.edu.au/studentguide/misconduct.htm.) Signed (if submitting electronically, enter your full name in place of signing) Date Joel Judge 31 August 2003 B. Class Facilitator to Complete Date Received Grade Date of Return to Student Overall Comments on Assignment Signed Date IROB5690 - Strategic People Management - 03-281 Assignment 1 Impact of Change On People Management Strategies Technology, Diversity and Globalisation Student: Joel Judge Length: 2000 (2150 actual) Due Date: Monday 1 September 2003 The external environment in which business organisations operate has changed dramatically in recent years. These changes in turn have had, and will continue to have profound implications for people management strategies. Rapid advances in technology, particularly information technology and telecommunications, have required businesses to re-evaluate the types of work performed by staff and the ways in which staff performance is managed and measured. The move towards globalisation and tighter integration of national economies has also demanded changes to staff management policies and practices. Similarly, the increasingly diverse nature of the workforce requires innovative people management policies to ensure diversity is harnessed and utilized. This paper will focus on these three external trends of technology advancement, globalisation and workforce diversity, and will consider how these trends have impacted on people management strategies in businesses. The ‘information revolution’ and continued advances in telecommunications are changing both the way in which organisations do business and the types of business they undertake. (Harpaz 2002, p.74) Exponential growth in high-speed computer networks, telecommunications software and hardware, integrated computer databases and the continued growth of the Internet have fundamentally changed the nature of ‘work’. These changes have opened up new possibilities and created complex challenges for those concerned with people management (Greengard 1994, 70). The information revolution is changing the way organisations are structured, the ways in which employees and employers interact, and their respective levels of responsibility (Greengard 2000, p.38). To give an indication of how pervasive the growth of technology in the workplace has been, one report claims that, “in 1991 for the first time American firms spent more money on IT and communications equipment than on industrial, mining, farm and construction equipment combined”(Adams 1998, p. 8). Technology is also playing an important role in the Australian context. The Commonwealth Department of Foreign Affairs and Trade, reports that Australia’s investment in information and communications technology is the third largest in the OECD as a percentage of GDP (http://www.dfat.gov.au/facts/innovative/fs03.html). Australia is ranked 8th in the world for percentage of total population connected to the Internet. As at November 2000, Canberra was ranked ahead of every American city in terms of the number of adults accessing the Internet, and all of Australia’s capital cities were ranked within the top 25 American cities (http://www.dfat.gov.au/facts/innovative/fs04.html). Technological advancement has allowed organisations to implement more flexible employment practices. A good example of this is the increase in the number of people who now “telecommute” (Verespej 2001, p230.). Telecommuting or telework, is defined as “work performed away from a central organisation, through the use of computer and communications technologies” (Whitehouse et al 2002, p.257). There are a number of perceived organisational benefits associated with telecommuting including, ‘increased productivity, decreased absenteeism, telecommuters working longer hours, reduced office space required, improved ability to attract high quality staff, lower staff turn-over and improved staff morale’ (Cote-O’hara 1993, p.106; Ilozor 2002, p.80; Helms and Raisadeh 2002, p.242). It is has also been suggested that telecommuting directly benefits employees through promotion of ‘flexible working hours, improved time management, increased autonomy and independence, improved work/life balance and savings in commuting time and travel expenses.’ (Harpaz 2002, pp.74-76). Businesses must, however, be aware of the potential risks associated with telecommuting, both from an organisational and individual perspective. Such risks include the problem of ‘physical isolation, the blurring of work and home life, the lack of support that is available at the office, the need for self-discipline, the belief that telecommuters are contactable at all hours, the difficultly in supervising telecommuters and the cost involved in implementing a telecommuting scheme’ (Harpaz 2002, pp.74-76). From a people management perspective, strategic consideration needs to be given to how best to facilitate telecommuting and provide support for the ‘virtual worker’. New human resource models, training and management techniques are being developed which address these issues. Organisations need to consider which staff are best suited for telecommuting, as not all employees are suited to this type of work. Ahmadi et al (2000, p.84), advise that successful telecommuters are “good planners” and are “self directed”. In advancing telecommuting as an option, human resource professionals need to provide adequate support, clear guidelines, focused training, communication strategies and clearly define the manner in which telecommuters will be supervised (Helms and Raizadeh 2002, p.240). For a telecommuting policy to be effective it must not only focus on the technical training but must also cover the issue of how interaction across the organisation and amongst telecommuter and non-telecommuters will occur. Greater time and effort needs to be given to establishing clear communication lines between telecommuter and their managers (Watad & Will 2003, p). Likewise different models for ‘measuring performance’ are also required. The focus should be on the measurement of outcomes and the quality of work (Fowler 1996, p.35). While a number of surveys point to the real benefits for employers and employees that telecommuting offers, it must also be noted that much more detailed research across industries, professions, age groups and gender are required to gain a clearer picture of the costs and benefits of telecommuting (Orlikowski 2001, pp.156-158). With a greater understanding of telecommuting, organisations will be able to establish telecommuting policies and select and manage telecommuters, while ensuring strategic imperatives are met. One of the major difficulties in studying telecommuting is the lack of reliable data on the number of people who telecommute and the level of employer and employee satisfaction and organisational benefit achieved. Technology is also breaking down traditional management hierarchies and flatter management structures are being established. As staff now have access to far greater amounts of information, the need to give employees greater and “shared” responsibilities has increased. In this regard people strategies need to ensure that candidates with the required skill sets are recruited and are able to deal with the demands of the information age (Griffiths & Lloyd-Walker 1999, pp.47-48) Information technology is also impacting on the way in which Human Resource Management (HRM) departments perform their duties. (Greengard 2000, p.30) In particular, ‘HRM software’ is allowing HRM professionals to spend less time on administrative work, allowing greater focus on strategic people management than ever before. In this regard, HRM is shifting from an “administrative to strategic role”, driven on by technology. (Sparrow and Marchington 1998 in Sawyer and Parker 2002, p. 39). For example, over 500,000 IBM employees are linked to a corporate HRM system. This database enables IBM to ‘analyse staff skills’, show where specialist staff are located around the globe, identify potential ‘skills gaps’, identify national and cultural backgrounds and indicate what training is being undertaken by which staff. Such information is invaluable as it allows management to have a stronger strategic focus on staff skills and allows greater alignment of people management strategies with corporate strategies (Gonzales et al, 2000 pp.13-15). The importance of technology enabled ‘knowledge management’ with regard to strategic people management cannot be over-emphasised. With more detailed information on staff experience, educational qualifications, projects completed, age, gender, language skills, etc… organisations are now in a better position to give detailed strategic consideration on how best to align there employment practices, recruitment and staff development, with the organisations overall mission and strategic focus. (Sawyer and Parker 2002, p.43-46) The growth of Workplace diversity is a major trend in Australia. Kramar (1998, p. 134) postulates that there are two categories of diversity, “primary (observable) and secondary (non observable)”. Primary diversity covers such characteristics as, “age, gender, ethnicity and sexual orientation” while secondary diversity refers to such characteristics as “education level, religious beliefs, martial status, work function background, etc…” Examining the Australian context, it is useful to provide some figures as to the level of diversity. With respect to cultural diversity, figures from the Australian Bureau of Statistics show that cultural diversity within Australia is increasing. In 1970, 47% of settler arrivals were from the United Kingdom and Ireland. In the five years to June 2000 this had dropped to only 12% of settlers. Of great significance is the percentage decline in immigration from the United Kingdom and Europe and the corresponding percentage increase in immigration from Asia. (http://www.library.unsw.edu.au/cgi-bin/access.cgi?url=http://www.abs.gov.au/). Furthermore, by 1995 the Industry Task Force on Leadership and Management Skills, the Karpin Taskforce (http://www.equityresearch.org.au/md1.htm ) reported that nearly a quarter of Australia’s population were either born in a non-English speaking country or had a parent who was born in one. The gender balance of the workforce is also continuing to change with more women in the workforce today in a greater number of roles and with higher levels of responsibility. Likewise, the average age of the workforce is also increasing. All these factors lead to a more diverse work environment. The diversity of the Australian workforce is a fundamental issue for strategic people management. Diversity differences, if not managed appropriately, can lead to ‘interpersonal conflict’ (O’Flynn et al 2001, p.34). To ensure the strategic management of a diverse workforce, Kramer (1998, p.137) suggests that nothing short of an organisational cultural shift is required. He argues that organisations need to focus on diversity at three levels, these being: · ‘The strategic level’– Need to recognise the critical importance of diversity for organisational success. · ‘Managerial level’ – policies and structures to ensure effective diversity management. · ‘Operational level’ – effectively delivered diversity initiatives in the workplace. (Kramer, 1998, p.137) The development of diversity management programs is now viewed as an important part of maintaining ‘competitive advantage’ (Whittenburg et al 2001, p.82). Many companies, and the Public Sector, in Australia, are increasingly recognising the importance of effective diversity management policies. For example, several companies have broadened their selection criteria’s and no longer rely heavily on technical measures, which have tended to favour the recruitment of qualified males. Instead, firms such as Hewlett-Packard are placing greater importance on areas such as, “analytical, communication, and management skills”. Such changes in selection criteria have seen dramatic increases in the number of female applicants. (Teicher & Spearitt 1996, p.124). With respect to cultural diversity, improved recruitment practices are also important. To ensure equal opportunities for people of non-English speaking background (NESB), it is important that recruiters and interviewers understand the challenges faced by NESB applicants. Unfortunately many recruiters are ‘not aware of techniques’, which may assist when interviewing applicants of different ethnic backgrounds (D’Netto & Sohal 1999, p.532). Greater advertising in ethnic newspapers can also assist in increasing the level of workplace diversity. In the United States many companies have taken to performing “cultural audits” with the aim of identifying strengths and weaknesses in diversity management. This is seen as a way of identifying gaps, which in turn assists in developing more effective diversity programs (http://www.hrpress-diversity.com/audits.html). The key to diversity management is ensuring that human resource strategies address diversity issues. This can be achieved through the development of ‘shared corporate cultures’, promotion of ‘diversity policies’ supported by senior management, establishment of diverse work teams and appropriate training and knowledge management (O’Flynn et al 2001, p.35-36). A survey undertaken by the Australian Centre for International Business, demonstrated that diversity management practices in Australia are inadequate. For example, “Information on the ethnicity of workers was not collected in 73 per cent of firms, 60 per cent had no data on language skills, and 35 per cent had no data on the age of workers.” (O’Flynn et al 2001, p.35). Without adequate data collection and analysis firms are incapable of establishing meaningful and representative diversity programs. Another problem that has been identified is the lack of development opportunities for women. The Australian public service has recognised this challenge and one measure that has been taken is to establish the Senior Women in Management Program (SWIM). Twenty to thirty senior female public servants participate in SWIM each year. The Program incorporates ‘course work’ with ‘targeted work placements’ and ‘group work’, aimed at further assisting with the development of women in management positions within the Australian Public Service (http://www.apsc.gov.au/swim/). Globalization is perhaps the most significant trend affecting work practices and people management strategies. According to one study, “there are at least 53,000 multinational companies with 450,000 affiliates worldwide (Wellins & Rioux 2001, p.26). One important aspect of globalisation is the growth of the multinational organisation (MO). When considering MOs the types of strategic people management strategies which may be adopted depends largely on organisational structure, management philosophy, and strategic needs. Kidger (2002) distinguishes between “multidomestic” and “global orientation” models. The multidomestic model promotes the need for “local” decision-making and greater “autonomy” while global orientation focuses more on issues of overall “efficiency” and the need for consistency in policy determination and implementation (Kidger, 2002 p.70). With the steady march towards globalisation, strategic people management becomes far more complex and even more critical. While internal diversity within an organisation located in one nation is complex enough, diversity management across nations adds another level of complexity. Strategic people management issues which need to be considered, include: · Determining how to employ and promote local staff into leadership roles; · Deciding on the roles of expatriate staff, their selection criteria, conditions of service and reporting requirements; · Considering how best to communicate between international posts; · Knowledge management and knowledge sharing – across regions and cultures; · Legal considerations, labour laws, occupational health and safety requirements, cultural differences; and · Corporate wide and localized training requirements. Rowden (2002) emphasises the need for Human Resource departments to develop and promote a “corporate culture” which defies national boundaries and focuses global staff attention on core strategic requirements. “A corporate culture may be defined as the sum total values, virtues, accepted behaviours, (good and bad).” (Bliss 1999, p. 8 in Rowden 2002, p.156). In conclusion, technology, diversity and globalisation have changed most facets of the work environment and have brought to the fore, the need for strategic people management. By establishing policies that promote diversity and provide effective integration of technology, work processes and staff management, organisations will be able to acquire and maintain competitive advantage. Likewise, with globalisation comes the need to focus on the development of ‘global corporate cultures’. This requires that HRM professionals understand and develop policies that incorporate both local needs and multinational requirements. 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