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Critically discuss the following statement: Three competitive challenges that companies now face will increase the importance of Human Resource practices; the challenge of sustainability, the global challenge and technology challenge. (Noe et al 2005:12) Long term profit will always conflict with short term viability in any organisation. Achieving the delicate balance, academics agree is literally in the hands of employees. This will also ensure the competitive challenges faced by organisations are not challenging. It is widely accepted as Noe et al (2006:13) identified three categories of competitive challenges of human resource management are; a) Competing through globalization which entails the expansion of the organisation into global markets and the challenges of preparing employees for work. b) Competing through sustainability which entails providing a return to stakeholders, the development of employees and the creation of positive work environment c) Competing through technology which requires changes in employee and manager work roles and the integration of technology and organizational social systems. Ulrich (1998:124) affirms Human Resource Management is an integral part of an organisation when addressing the competitive challenges and embracing new competence levels such as speed, learning agility and responsiveness. Additionally this will eliminate the Silo Mentality which occurs when departments or groups do not share information. A silo mentality reduces efficiency and Human Resource Management should view silo mentality as being a contributing factor to fulfilling corporate culture which adversely affects organisations sustainability. (Investopedia, 2010) The task of dispelling this mentality is that of Human Resources and as Ulrich (1998) suggests will enrich organisations value to customers, investors and employees. Human Resources will be the skin that holds organisations together; Ulrich (1988) Human Resources should not be defined by what it does but by what it delivers. The challenges that companies face can be confronted with the impact of Human Resources and Human Resources can deliver organizational excellence. Ulrich (1998) Human Resource Management professionals will need to focus on the creation of value for the organisation and

2 create instruments which will offer swift business results. Of setting the challenge can be faced by Human Resources by improving and automating administrative systems, campaigning for employees and building the organizations ability to change. (Ulrich, 1998) Expansions of global markets managers are being challenged. Globalization requires shifting productivity, information and most importantly people across the world to meet local needs. Additionally managers are faced with political situations, global trade issues, instability in exchange rates and unfamiliar cultures. Globalization has forced organizations to improve their capacity to learn and to form partnerships and to control uncertainty, difficulty and diversity. (Ulrich: 1998) Sustainability is defined as the capacity to endure. (http://www.cosmolearning.com). Sustainability crosses with economics through the social and ecological costs of economic endeavors. However sustainability can mean different things to different people. Essentially sustainability involves meeting the needs of stakeholders of the organization of today without compromising the capability of future stakeholders to meet their needs. The challenge of sustainability focuses on Human Resources conscientiousness for employee recruitment and retention, motivation and competency. This is accomplished by peer learning, training and development and creating a culture amongst employees and leadership. An organisation which attends to the challenge of sustainability, will employ sustainability as a marketing tool as well as a tool to improve employee performance. Companies must frequently improve their workforce skills to react to the rising demands of customers, investors and society. The challenge for Human Resource managers is to make clear the expertise required to deliver the companies long term plan as well as manage with varying competitive situations. A successful plan will depend on identifying valuable means of structuring competencies either via means of formal training programmes, peer-to-peer learning and involvement in community programmes. Sustainability requires change management and not a skillset common in the field. Reducing the impact of a companies operations for example, is about motivating employees to change behavior. Employees must be employes once an organisation embraces technology. Failure of integration of new technology will see prominent groups within an organisation become powerful. The effect of

3 this could be the reallocation of status, power and practices to which some employees could offer resistance. (Smit, 1992:399) Adversely globalization has dramatically improved access to technology. Competitive success especially in turbulent times and in highly competitive environments can be achieved by embracing technology. (Hoskisson, Hitt and Ireland, 2008) The effect of this was seen by Western companies moving their call centers to India. The labour force in India in the technology sector are skilled and cheap. Using the challenge of technology western companies who embraced Indias advantage thrived.

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Discuss the factors affecting human resources management in global markets.

4 I think probably the biggest impact to employee relations and to the human resource field is the concept of globalization. Harry Newman of IBM. (Noe, Hollenbeck, Gerhart, Wright: 2006 p. 44) Globalization is described as an ongoing process by which regional economics, societies and cultures have become integrated through a global network of communication and exchange. (www.hubpages.com). Globalisation is not just a phenomenon or just a passing trend. Thomas Friedman in his book, the Lexus and the Olivetree states globalization is the integration of capital, technology and information across national borders in a way that is creating a single global village. This makes human resource management in global markets clearly a complex process that cannot be avoided or ignored by organizations that wish to succeed. The factors affecting human resource management in global markets include, compensation, labour laws, cultural diversity, language, religion, talent retention, political stability, qualification levels, technology, time zones, health issues, terrorism and recruitment. Compensation will remain one of the most complex sphere of human resource management. In global markets the aspect of compensation is compounded. Countries have different norms for employee compensation and that whilst Americans perceive non-financial incentives such as prestige, independence and influence as motivators, remuneration is the driving force for relocation. Respect, family, job security, personal life, social acceptance, advancement or power is the probable attributes sort by other cultures. Compensation should support the strategic intent of the organisation, whilst providing elasticity to customize compensation for employees in specific locations. (Sherman, Bohlander and Snell, 1996) Labour laws of local government in theory is the most transparent of all factors affecting human resource management in global markets yet it proves to be the most obscure and complicated (Leopold, Harris and Watson, 2005). The concept of fairness as Schuler and Jackson (2006) state has many connotations hence ensuring fair treatment can be challenging. Fair labor laws practices governs and protects both employer and employee. South Africa as an example has the most stringent labour laws in the world and which is seen to favor the employee. This inevitabiably does act as a deterrent for foreign companies wanting to invest in South Africa. Sherman et al. (1996) state that governments have a significant impact on human resource management. Laws and

5 regulations of governments affect human resource from employee recruitment to termination. Each country has unique policies and procedures with regards to labor laws. The Japanese have an appreciation for efficiency and utilization of space and methods employed from Japan i.e. J.I.T. (Just In Time) has had positive impacts on western organizations. International diversification has had a positive impact on many organizations performance. Adversely culturally unrelated global diversification can have a negative impact on an organisation. (Greer, 2001). It is the onus of human resource management to understand and respect cultural diversity and include the impact of language and religion. Greer (2001), Hofstede suggests there is no such thing as a universal management method or theory across the globe . Hofstede suggests that management cannot be isolated from other processes taking place in society. The cultural dimensions of Hofstedes model is a framework which describes 5 differences and value perspectives between national cultures which human resource management must pay attention to. Managing cultural diversity is a complex and bewildering task. (Cornelius, 2001:218) Organisations who are able to manage cultural diversity successfully will have a distinct competitive advantage. Advances in technology together with reduced costs for technology has greatly affected human resource management in global markets. Technology has forced skill changes and new employee roles. (Noe et al, 2006). Technology savvy organizations will require a skilled workforce. Together, globalization and information technology crushes time and space. (Mani, 2006). This development places amplified pressures in counties where labor practices are questionable, due to employees having access to fair labor practices of other countries. A more mobile and much more capable and efficient workforce are established with the impact of globalization and technology. (Mani, 2006) Other significant factors affecting human resource management in global markets are terrorism, health issues such as HIV/Aids and time zones. Disparity in legal, political and cultural values and practices in various countries often brings to the fore ethical issues for global employers. The impact of laws necessitates managers act ethically.

6 (Mathis and Jackson, 2008). Human resources must tailor its policies and practices to local conditions while at the same time modifying the mindset and technical skills of local employees to world-class standards. (Ulrich, Losey and Lake, 1997:156)

7 3. Critically discuss the following statement:

The critics of performance appraisal claim that it is expensive, causes conflict between appraised and appraiser, has limited value and may even be dysfunctional in the improvement of employee performance. Nelson and Quick (2006:202) state that people in organisations learn from the consequences of their actions. Furthermore Nelson et al (2006) conclude, managers must exercise care in applying positive and negative feedback and that the feedback is aligned to the behaviour the managers propose to reward and punish. By its definition; A performance appraisal is a method by which the job performance of an employee is evaluated in terms of quality, quantity, cost, and time. This is done typically by the corresponding manager. A performance appraisal is a part of guiding and managing career development. It is the process of obtaining, analyzing, and recording information about the worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgment of an employee's performance in a job based on considerations other than productivity alone. Unfortunately performance appraisals are not purely scientific because of the psychology of the appraiser and the appraised. Additionally many organisations view appraisals as an annual inconvenience, which culminates in a report which is simply filed away. Performance appraisals are not closed meetings where employee faults are discussed. If conducted properly appraisals are opportunities for organisations to improve relationships with employees. Taken seriously the appraisal process should be viewed by both the appraised and appraised as a process. (Watson, 2007) The appraisal process as critics rightly point out can be dysfunctional, if poorly planned and poorly executed. If so, this could harm employee morale and serve as grounds for employee grievances. There is however merit in performance appraisals.

8 Managers should encourage self awareness. Allowing employees to conduct self assessments as part of their performance appraisal process encourages employees to enlighten themselves and support their growth for change. Plans for development will enhance an employees experience and expertise. This will prepare employees for career advancement. The high organisation costs associated with performance appraisals The appropriate positive focus and approach, performance appraisals can be a powerful tool for fostering self-awareness, development and high performance. An organisation seeking long term sustainability cannot ignore the value of well executed performance appraisals.

9 4.1. According to Cascio (2005:63) managing diversity means establishing a heterogeneous

workforce to perform to its potential in an equitable work environment where no member or group of members has an advantage or disadvantage. With reference to this, discuss the reason why diversity has become as important activity in managing an organizations human resources. Noe et al. (31) the bottom line is that to gain competitive advantage in the next decade, companies must harness the power of the diverse workforce. The philosophy of Ubuntu, an Nguni word translated simply to the quality of being human, (www.businessweek.com). Griggs and Louw (1995) suggest that applying Ubuntu to diversity training, trust becomes the basis for a transformed organisation and that valuing diversity and empowering all workers will not only have rewards of increased loyalty that comes from worker satisfaction but also by a boost in creativity and bottom line results. A combination of demographic changes and shifting globalization of business, has made the management of diversity an important issue. Workforces which reflect demographic changes in the overall population, will be increasing heterogeneous along the dimensions of gender, race, ethnicity and nationality. Such demographics changes have implications for workforces. The effective management of diversity can enhance the social responsibility goals of organisations. There are many other benefits as well. Six areas where human resource management of a diverse workforce can improve an organisations effectiveness and competitive advantage are; 1. cost 2. resource acquisition 3. marketing 4. creativity 5. problem solving 6. organizational flexibility (Dess, Lumpkin and Eisner, 2008)

10 Organisations who embrace diversity will lead in effectively managing diversity this will result in long term cost advantage. An advantage in attracting talent will be achieved by organisations who are seen as prospective employers of women and ethnic minorities. Marketing an organisation also has advantages as being a culturally sensitive organisation. Shying away from norms of the past a diverse organisation will have higher levels of creativity and flexibility. Diverse groups within organisations will also lead to competitive advantage through improved ability to problem solve as a wider range of perspectives are offered. Demographics and globalization is now the foundation for diversity. No longer is the ethical and legal requirement for diversity a driving force. Human resource departments are pushing for racial, ethnic and sexual work place balance for the long term economic sustainability of their organisation. Managers today generally understand that they have to recruit and maintain a diverse workforce to compete successfully in a global market place. (Dessler, 2004:45)

11 4.2. Discuss the differences between managing diversity and managing affirmative action.

At the fore the difference between diversity and affirmative action for organisations is that affirmative action is an obligation and a pressure brought upon an organisation by law. Strategically driven, diversity is embraced for the benefit of the organisation. Herein lies the problem for human resource management and how human resource manages these similar and overlapping, yet different practices. Diversity is seen in demographic differences in an organisations workforce. (Matis and Jackson, 2008) Diversity refers to any perceived differences among people i.e. age, race, religion, profession, sexual orientation, geographic origin, lifestyle, tenure with the organisation and any other perceived difference. Mondy and Noe (2006:50) Effective management of diversity can increase an organisations productivity and gain competitive advantage. Matis et al (2008) suggest organisations can move towards managing diversity from different perspectives. Affirmative action requires employers to analyze their workforce and develop a plan of action to correct past discrimination. Sherman et al. (1996) infer that affirmative action is achieved by organisations that follow specific guidelines and goals to ensure that they have a balance and socially representative workforce. Contrary to diversity, affirmative action cannot be approached from different perspectives, hence managing affirmative action is different. Greer (2001) states the importance of managing diversity and appraising the effectiveness of human resource, is that organizations are able to feed of the potential of their workforce. Thus there is a direct correlation between management of diversity and companies planning to avoid labour shortages. Diversity management like affirmative action requires commitment from top management. Management must also assume responsibility for diversity results. Accountability for an organizations diversity programmes and forming of a diversity committee, conducting diversity training, establishing mentoring systems, placing emphasis on diversity in succession and promotion and establishing multicultural work teams, is the responsibility of human resources. (Mathis et al. 2008) Within and organisation as Bagraim, Cunningham, Potgieter and Viedge (2007) suggest management must manage the process of affirmative action by putting into practice change,

12 maintaining the status quo, monitoring, acting and reacting as well as compelling management to the process. Affirmative action is numbers orientated and is aimed at changing the demographic of the organisation. Managing diversity does not replace affirmative action, rather is builds on the critical foundation laid by workplace equity programmes.

13 4.3 The main objective of profit making organizations is to maximize overall returns to

shareholders. There are sound business reasons why having a diverse workforce and managing it properly can increase shareholder value. However, companies generally tend to measure success in diversity programmes by looking at indicators other than the bottom line. Affirmative Action programmes have been criticized strongly for adding costs to firms with little or no financial benefits. Given the costs involved, critically discuss whether diversity programmes can be justified over time purely on philosophical and moral grounds (i.e. / its the right thing to do). The greater good is a term usually associated with the philosophy of Utilitarianism. Utilitarianism is the idea that moral worth of an action is determined solely by its contribution to overall utility, its contribution to happiness is distributed amongst all people. And moral worth of an action is determined by its outcome. Diversity programmes cannot be justified over time purely on philosophical and moral grounds, as the reward of long term sustainability and financial reward is inevitable and unavoidable. An organisations lifeblood are the humans who work for it, Harrison (2003) states an organisations workforce is unique and is it most valuable asset. From a human resource perspective human resource management in South Africa is guided by King III (www.bowman.co.za). King III forms the basis of corporate governance whos rules are to improve the quality of leadership. Corporate governance guidelines seek to assist directors to understand what good governance requires of them, morally. King III addresses numerous governance issues. Ethical leadership and good corporate citizenship is one of the key principles. An organisations board provides ethical leadership based on ethical foundations. Good corporate governance is fundamentally about effective, accountable leadership. An organisations diversity benefits when leadership of an organisation directs its strategy and operations to build a sustainable business. Performing these tasks ethically and considerations given to the short-term and long-term impact of the strategy on the economy, the community and the environment the diversity of the organisation benefits. (www.bowman.co.za)

14 Organisations do not function in a vacuum. Diversity programmes bring with them the benefits of improved public image, increased market penetration, access to wealth of expertise and experience. Hence diversity programmes cannot be justified over time purely on philosophical and moral grounds.

15 5.1. Discuss the advantages and disadvantages of the proposed grievance review panel.

People are organizations most underutilized resource. In the new information economy, independent entrepreneurship and initiative is needed in an organization. The top down approach is a practice of the past. An organizations management must work towards engaging its employees enough to achieve the organisations objectives. Managers now assume leadership and coaching tasks and work to provide employees with resources and working conditions which employees need to accomplish their goals. Empowered human capital is the key ingredient to organizational success. This is achieved by significant degree of empowerment and decisionmaking authority. Employee empowerment changes the managers' mind-set. Managers have more time to engage in broad-based thinking, visioning, and development.

If the grievance panel is managed according to the widely accepted 9 basic elements of grievance policy and procedures (LabourLawHandbook.co.za), there will be limited disadvantages to the proposed grievance panel. This was pointed out by the Human Resources managers: How can you let yourselves be outnumbered and still maintain your right to run the business? However this was rightly justified by management, if we have a major issue that truly divides the management and hourly-paid members of the panel and if we cannot convince one of the hourlypaid people that we are right then we must be wrong. Its obvious due considerations to Douglas McGregors Theory X and Theory Y has been given by the management. Theory X which assumes that the average person dislikes work and has no ambition, hence does not bother about the organisations goals is excluded in the case study. More apt is the adopting of Theory Y. Participative management and that employees will be committed to their objectives if rewards are in place that address higher needs. (www.netmba.com) Empowering hourly-paid employees with a three to two equal vote the advantages to the grievance review panel is that all employees will have the assurance that they will be free to raise grievances and that they would not be victimized for doing so by having the sense of security. The 9 basic elements (LabourLawHandbook.co.za), includes the assurance that wherever possible grievances

16 will be handled with discretion, protecting confidentiality and privacy of employees concerned and; - A requirement that the employee who has grievance sets out his complaint in writing. - A requirement that the employee who has a grievance sets out in writing what outcome he is looking for to resolve his grievance. - Set out who the grievance must be lodged with in the first instance. - Set out the various stages or levels that the grievance should go through. - Give a guideline for how long it should take to deal with the grievance at each level. Indicate the final level a grievance can go to in an effort to resolve it internally. - Indicate what the employee can do if he is still unhappy after the grievance has reached the last level. Usually this will simply be a statement that the employee is then free to exercise his rights under the Labour Relations Act (LRA) (LabourLawHandbook.co.za). Given due notice that employees where consulted and training were given in legal and ethical elements of grievance handling, problem solving techniques and effective listening skills can be seen as advantages. However not ratifying the plan officially by both employer and employees must be seen as a disadvantage, as both parties can exploit this to their advantage if not made official.

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5.2.

What does the grievance review process symbolize and what does it say about managements assumption about workers?

Employers and employees will always seek change to employment relationships as needs and conditions change. New issues will always arise in the workplace. Employers and employees should work through issues themselves, by dealing with one another in good faith, which includes mutual obligations of trust and confidence. But this is not always the case. Good faith pertains to bargaining for individual and collective agreements. The obligation to deal with each other in good faith continues to apply to all areas of the employment relationship. The right to individual choice should be respected. Employers and employees may have a range of different interests, but they have a common interest in the viability and success of the business. If sensible people deal with one another in good faith, then differences should be able to be resolved amicably. Good faith is about telling the truth. Employers and employees are not allowed to do anything that misleads or deceives one another. (www.ers.dol.govt.nz) We can assume the grievance review process symbolizes that management have acted in good faith and assume that workers will act in the best interest of the organisation. Having not ratified the grievance review panel formally, does leave the entire process open to mistrust. A formal grievance policy and procedures plan should be agreed upon and accepted by both employer and employee.

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