1. Introduction
The Human Resource Management (HRM) function has managed to progressively establish itself as a vital function over the decades, where it has transformed from personnel management to the HRM function. HRM is one of the major functions in an organisation, where the primary focus is on managing labour and personnel and the process associated with the workforce such as; recruiting, selecting, training and development, motivation, mediation, remuneration, etc. HRM initially emerged during the 19 th in its infancy and has now transformed from traditional practices to taking on a more strategic approach. While there continues to be much debate on the significance of the HRM function, it is certain that this function is gradually becoming more apparent in an organisation’s strategic plan for success.
The HRM function has, without a doubt, had a reasonable amount of challenges throughout the years that it has been prevalent, however, with the rapid movement of organisations into the 21 st
century with the goal of competing as the best, there are contemporary challenges that arise within the HRM function, especially in South Africa. Some of these challenges include; multigenerational workforce and how they should be handled in terms of work/life balance, flexibility and adaptability, reward, and corporate culture, a diversity shift especially in SA owing to the abolishment of Apartheid which now raises concern about ethics and values in the workplace in addition to the wellness of employees, technological advances and how it impacts on eLearning and development as well as recruitment strategies, globalisation and competitive advantages, and lastly the relativity of performance management, employee morale, and attrition rates. All challenges will be discussed in detail, and will include a brief suggestion at the end of each section on how to overcome said challenges, in addition to looking at how each aspect is not just a stand-alone issue but ties in with several other issues, where there is a holistic view on all challenges.
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2. Evolution of Human Resource Management
Although the nature of HRM has proven difficult to envisage in the future, there are compelling suggestions that its theory and practice will progressively transform as a consequence of globalisation, technological advancement and accompanying fundamental changes in the nature of employment and work. The impact of external and internal pressures on an organisation’s labour force and overall working conditions is accredited with the continuous evolution of HRM as a contemporary subject as well as the demand for continuous innovation on the part of HRM professionals and thinkers (Abbott, Goosen, &
Coetzee, 2013). The evolution begins with personnel management, moves onto traditional
HRM and then strategic management.
2.1 Personnel Management
Qadeer (2014) states that after the industrial revolution (1800s), factories and a greater workforce were established which led to the origins of workforce management. This brought about long hours of labour that workers had to face together with unhygienic conditions both in the workplace and at home. Shortly after this riots occurred due to a reduction in wages.
Soon the government was forced to intervene in order to provide basic rights and protection for employees. This required factory owners to comply with the statutory regulations and to set up formal processes to investigate employees’ wages and wellbeing, and rectify other matters concerning labour (Rotich, 2015). This led to the institution of Personnel
Management as a distinct vocation.
Although the personnel management approach continues as a hot topic for much of the 20th century it remained administrative in nature. As a result of enforcing statutory compliance, it involved itself predominately with; adherence to the specified policies in addition to executing functions such as worker record keeping, wage administration, training, and recruitment (Grobler, Warnich, Carrell, Elbert, & Hatfield, 2006). Additionally, trying to increase productivity by a means of wage increases and training as well as engaging in employee wellness measures such as supplying routine medical care, and housing facilities etc., together with handling trade unions and attempting to resolve internal disputes, coupled with conducting performance appraisals to determine incentives (Rotich, 2015).
The personnel management approach tried to persuade employees’ investment in the organisation’s interests and goals as well as bringing the attention of management to the employees’ interests and social commitments. It was not often that personnel management
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were allowed direct control in a company’s strategy and it did not concern itself with operational matters, but instead remained purely as a staff function (Grobler, et al. 2006).
2.2 Traditional HRM
It was during the latter decades of the 20th century that personnel management began to transform (Qadeer, 2014). This transformation soon led to the shift of personnel management from an administrative and passive role to a more dynamic role which is known Human
Resource Management today. Workers, who were once viewed as mere cogs, were now viewed as valuable resources.
Human Resource Management stepped up as a function that became invested in the line management function which is directly interlinked to the core business operations (Fan & Wang, 2015).
2.3 Strategic HRM
At the end of the century, HRM found itself evolving into something better – Strategic HRM.
Intensified free market competition at an international level as well as the progression of technology and information based industries boosted the significance of human resources from a vague role a century ago, to one of the most vital functions within the organisation
(Adresi & Darun, 2017). The workforce, which was previously considered as “resources" now became “assets" in addition to being a valuable source of competitive advantage.
According to Aswathappa (2013) the direction of HRM now lies in attempting to combine individual goals and objectives with that of corporate goals and objectives, and rather than impose rules or terms, act as a mediator as well as promoting a participative approach.
Strategic HRM blurs the line between a specialized HRM function and core operational activities, and more often than not, the HRM function is faced with challenges as the function continues to evolve (Fan & Wang, 2015). HRM professionals have to put their best foot forward when trying to handle these challenges as they are imperative to organisational success. When there is cohesion of activities from the relevant functions and managers, operational success and competitive can be achieved (David, David & David, 2017).
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3. Challenges that HRM faces in the 21 st Century
With the 21st century afoot, organisations such as government, non-profit, and private strive to adjust to a professional environment that is constantly changing. The role of HRM has acquired a new dimension in the 21st century particularly after globalisation therefore it’s no surprise that employee management is a challenging job that requires specialized skills.
In order to best prepare for the revolutionising face of human resources management, HRM professionals must rise up to the challenges of recruiting, building, and retaining a talented workforce. Ensuing next is a discussion on some of the challenges being faced by HRM in the 21 st
century (Pratap, 2017). The challenges that HRM face include a multigenerational workforce, diversity, technological advancement, globalisation and the economic environment, and performance management, employee engagement and attrition rates.
3.1 The Multigenerational Workforce
For the first time in history, there are five generations functioning side by side, each of which possess different leadership, communication and career development perceptions. HRM and relevant professionals must incorporate the effects that multiple generations have on the organisation to their diversity and inclusion initiatives. Multigenerational organisations produce unique challenges and opportunities for employers who embrace each generation’s talents and skills to attain organisational success.
A report by the Center for Woman and Business (2017) outlines that the five generations comprise of (approximate years) – Traditionalists (1928-1945), Baby Boomers (1946-1964),
Generation X (1965-1979), Generation Y/Millennials (1980-1995), and a sprinkle of
Generation Z (1996-present) - whose life proficiencies has left permanent marks on their values and work preferences. Nasir (2017) continues extenuates that with the presence of multiple generations in an organisation, each of which possess different values and priorities, they have the potential to generate serious problems for an organisation. Lacking a successful strategy to tackle intergenerational challenges may find an organisation at a competitive disadvantage, stuck in conflict and overlooking useful opportunities. The generational gaps will be discussed in terms of the following headings:
3.1.1 Work-life Balance- A progressive concept that is obtaining a great deal of attention nowadays. Due to the increasingly stressful nature of jobs employees are continuously searching for organisations that provide a work-life balance, where time is allocated between work and other aspects of life such as family and/or social activities (Beauregard & Henry,
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2009). This requirement is more prevalent today with the newer generations however the older generations are also leaning toward a greater work-life balance (Lockwood, 2003).
3.1.2 Flexibility and Adaptability- For some time now, businesses have been progressing away from hierarchical, controlled environments as they are neither efficient for organising nor comfortable for personnel (Boaden, Marchington, Hyde, Harris, Sparrow, Pass &
Cortvriend, 2008). HRM needs to represent this undertaking by allowing employees
(especially managers) to be flexible, adaptable, and nimble. With the flexible employment agreements, HRM professionals need to consistently observe the successfulness of different projects and identify the challenges faced during that period. This evaluation assists in making improved measures concerning flexible work arrangements in future (Shanafelt,
Boone, Tan, Dyrbye, Sotile, Satele, Oreskovich, 2012). With increasing numbers of millennials and generation Z entering the workforce, there is a higher expectation for flexibility and adaptability because monetary rewards are not the only thing they value.
3.1.3 Rethinking Reward- Compensation will continue to be imperative, however, employees
(especially the newer generations) are now placing minimal appeal on monetary reward and putting more emphasis on the “employee experience” which combines emotional and mental gratification together with a reasonable salary (Bursch & Kelly, 2014). Job seekers’ interpret a company’s take on reward as an indication of its values. Employees want to work collectively, be surrounded by encouraging peers and inspiring managers, and they want to know that the organisation is individually invested in their welfare – all of which was a direct impact on their productivity and performance (Kaufman, 2014).
Unlike compensations, which is merely transactional, these less palpable forms of remuneration require consistent curation and modification to employees’ needs. Although this has continuously been an area of HRM, getting this correct is extremely fundamental to recruiting and retaining the best people (Bursch & Kelly, 2014).
3.1.4 Corporate Culture – Guiso, Sapienza & Zingales (2015) highlight that building a culture where people are handled well in spite of their title is becoming increasingly significant today. Whether it is baby boomers or generation X, almost all 21st century employees, at every level, aspire to be instrumental in business decision-making. Henson
(2003) confers that one of the several ways to accomplish this is by compensating employees for inventive suggestions no matter what their position is in the company. This practice is also beneficial to the company because the ‘what is important about the frontline workers’
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notion believes that these workers depict a broader representation of what the organisation encounters and what it is actually cable of. In most instances, these workers see more possibilities for bold engagements than the officials at the top (Kaur, 2013). Culture certainly transforms as a company develops and its mission progresses over time it is therefore the duty of HRM to encapsulate that culture and ensure its alignment with organisational goals and objectives.
The multi-generational workforce presents an assortment of challenges and opportunities therefore it is the role of HRM and relevant management professionals to take command and assist the organisation to conquer potential challenges if the company hopes to produce superior business results. Mahedru & Kaleka (2011) substantiate that HRM and forward thinking managers should abstain from generalising the various generations since no two individuals are similar, additionally employees of the same generation may boast totally unique life experiences which shape dissimilar outlooks and behaviours. Appreciating the different generations and what influences them in terms of work/life balance, flexibility and adaptability as well as rethinking reward and corporate culture, can help HRM managers’ foster strategies to attract, improve, and maintain leaders in systems that are more significant and appealing to each generation.
3.2 Diversity
Abbott, Goosen, & Coetzee (2013) believe that, in a South African framework, the subject of diversity is followed by a considerable amount of speculation and scrutiny, therefore businesses must be careful as well as ethical. HRM must ensure that decisions are in compliance with the numerous labour laws and acts.
Diversity and its advantages come at a price. A consequence of a diverse workforce might be enhanced problem-solving, given the different mind-sets confronting the issue, however, workers originate from different religious and cultural backgrounds and there might be a language barrier making communication a complicated and strenuous task. In addition to this, the removal of prejudice and stereotyping is difficult to eliminate in most situations where various individuals are gathered. There will always be clashes between cultures and/or religions, causing workplace distress and dissatisfaction (Grobler, et al. 2006)
3.2.1 Ethics and Values - The discussion of ethics began during the mid-2000s when it was discovered that various businesses have engrossed unethical and illegal behaviour which resulted in the loss of billions of dollars from stockholders (Greenwood, 2013). With recent
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transformations in workplace culture, strategies and organisational structure, it is now imperative that organisations have values and ethics in place that will determine organisational sustainability in international markets for an extended period. Greenwood &
Freeman (2011) further extenuate that it is the responsibility of HRM to deal with a range of ethical challenges or issues as they may encounter several ethical risks that can harm the reputation of the organisation as well as its financial sustainability in the long run.
3.2.2 Employee Wellness – Bailey, Bemis-Shields & Ford (2008) found that employees nowadays are under more pressure than ever, with 65% of people naming work as the top cause of stress in their lives. A combination of extreme workloads, long hours and the
“always on” work ethos means that several workers face a hazardous levels of stress.
Shanafelt, et al. (2012) further states that in addition to diminishing performance, stress may also have a dangerous effect on mental health as well as increasing the risk of depression, anxiety and burnout. Furthermore, it can continue beyond the workplace and into employees personal lives, with numerous people releasing their stressors on friends, children, or significant others. An employee’s welfare has a major influence on the productivity levels of the company and it is important that managers and HRM ensure that employees are well.
Diversity in the workplace has and will, maintain a controversial debate in South Africa.
Diversity concerns should not be taken nimbly and should incorporate the participation of top management (Choy, 2007). Rulashe (2011) continues that diversity management is not only about team-building programs and get-togethers, but rather goes beyond that and involves an interpretation of the barriers generated within the business. Barriers should be tackled through appropriate communication and by cultivating systems that accommodate these barriers. In addition to dealing with diversity challenges, a company must not forget to instil its core values and ethics as well as handling the wellbeing of its employees through wellness programs (Kaufman, 2014).
3.3 Technological Advancement
The suitable utilisation of the correct technology is one of the major factors that assists HRM in performing better in the business domain and becoming a strategic business partner
(Hashim & Hameed, 2012). Additionally, technology can aid HRM evaluate opportunities, handle risks, take action, and communicate effectively with employees. Without technology, handling HRM challenges would be impossible.
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3.3.1 e-Learning and Development – Despite technology being better today than ever, today’s e-learning is merely in its initial stages. According to Parry & Tyson (2010), the utilisation of e-learning is accessed through a collection of self-service that influences third-party knowledge and/or subject matter, which is also referred to as knowledge management nowadays. With a maturing workforce, organisations have a tendency to promote younger employees even though they may not be prepared to be leaders (Abbott, Goosen & Coetzee,
2013). Companies can address this challenge on both an employee and managerial level by developing an environment that constantly promotes learning and development. In the forthcoming years, e-learning will simply be utilised as the method that the workforce uses to be developed on an ongoing, as needed, basis (Karthikeyan, 2014).
3.3.2 Recruitment Challenges - With a skills gap that demonstrates no signs of reducing and organisations that are still starved for competent workers, the moment has come to rethink recruitment (Swanepoel, Erasmus & Schenk, 2008). According to Pietersen (2018) this starts with the manner in which companies’ obtain candidates, which typically indicates unintentional preconceptions that should be exposed and rooted out. Likewise, the procedure of interviews is also flawed. The outcome of this is that people are frequently being employed for their confidence rather than their competence. HRM must identify the flaws in recruitment processes as well as utilising a broader collection of data and insight to improve hiring decisions (Parry & Tyson, 2010). This will subsequently assist HRM foster new recruitment methods and strategies with the aim of finding the appropriate person for the advertised position.
Certain challenges encountered during the process could include the cost of advertising job positions while indefinite hurdles can be communication disparities among recruiters and hiring managers (Nasir, 2017). Mahendru & Kaleka (2011), consequently state that selecting the cream of the crop from a pool of applicants is exceedingly vital for 21st century managers to expand their viewpoint on assessing candidates on the basis of their origin, beliefs, morals, culture and background.
Technology has transformed the manner in which businesses function. Nowadays most operations are being automated and the demand for human interface is being reduced (Parry
& Tyson, 2010). However, the period when HRM won’t be required is still multiple years away so in the meantime it is the responsibility of HRM to apply the appropriate strategies to tackle the rapid technological changes within the office. Lengnick-Hall, Lengnick-Hall,
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Andrade & Drake (2009) state that several of these strategies involve training and development systems that benefit present and future workers of all ages to accelerate their technological abilities and knowledge. Companies need to bring attention to the benefits of technology to employees in the workplace and that once it is learnt it can enhance productivity whilst rendering the job easier (Kaur, 2013). However, when new technology systems are being introduced, managers need to ensure there is excellent communication between employees.
3.4 Globalization and Economic Environment
In a modern business sphere, markets have become battlefields where both the local and international competitors attempt to seize the maximum market shares available (Choy,
2007). In an economic predicament, organisations undergo both internal and external pressures, whereby the external competitive pressure occurs when the economic predicament generates a decrease in demand and a rise in unemployment, which consequently affects the international competition in the market (Kaufman, 2014). Hurn (2014) states that alternatively, the management of the internal business emphasises efficiency which leads to an increased pressure to minimize costs and lower expenditure. HRM and management are faced with the challenge of high unemployment rates and layoffs, which undoubtedly has an influence on the strategic HRM approach. In an economy that faces inflation frequently, resources tend to become limited and the costs of machinery, materials and labour increase which in turn multiply the cost of capital and operational activities (Hurn, 2014).
3.4.1 Competitive Advantage
– With an increase in globalisation in the marketplace, firms are finding it increasingly challenging to obtain competitive advantage. David, David & David
(2017) state that in order to adjust to this transitioning environment, the organisation’s traditional management approach had to evolve into a more strategic approach towards HRM.
Namada (2018) states that before this shift, firms previously pursued a competitive advantage from outside, by evaluating the cost of goods and trade prices. There now exists a notion that the key sources of a competitive advantage people dependent.
This belief has transformed the role of HRM from being just a supportive function to having a strategic impact on competitive advantage (Hashim & Hameed, 2012). The demand to continuously expand markets on both a local and international scale has grown to be quiet the trend, the effects of which, has unfavourable effects on employees as well as the HRM function (Namada, 2018). HRM plays its role in attaining and retaining the right personnel so
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that the organisation can expand successfully, as well as handling the development of current employees so there is unity within the workplace (Henson, 2003).
3.5 Performance Management, Employee Engagement, and Attrition Rates
According to Beauregard & Henry (2009) performance management is currently a heated discussion in HR and Industry and Organisational Psychology. In 2015 and 2016, many large corporate firms (such as Deloitte, SAP and General Electric) publicized that they were terminating traditional performance review structures, and replacing it with a more personalised, feedback-driven, approach (Pandey & Moynihan, 2010).
Marko & Sridevi (2010) expresses, that when it comes to the multi-generational workforce, generations X, Y and Z lean towards being less responsive to an authoritarian style of management, and usually favour regular and direct feedback. Alternatively, Baby Boomers are more familiar to a hierarchical organisation structure, and will normally react better to conventional and constructive feedback where there is an awareness of their work ethos and dedication and that it has not overlooked.
3.5.1 Employee Engagement – For the past five years, employee engagement has been a
HRM buzzword, however among organisations that have placed more focus on their labour assets and altering the workplace culture, only a few are seeing major developments (Gruman
& Saks, 2011). Productivity standards throughout the world continue to languish, implying additional efforts should be made to engage employees (Kompaso & Sridevi, 2010). The challenge is that firms are still focusing most of their efforts on assisting the individual when in reality; engagement is just one component of the broader employee experience (Pratap,
2017). Additionally, firms should also focus on significant influences like group dynamics and the emotional environment across their organisation.
3.5.2 Attrition rates - High turnover rates or attrition rate is also a usual HRM challenge that creates a difficult situation for organisations and HR managers (Hashim & Hameed, 2012). In addition to raising recruitment costs it also wastes a great deal of time dealing with hiring.
Hurn (2014) postulates that a firm should not only focus on acquiring the best talent but should also focus on retaining the said talent. A high turnover rate stems from mediocre training and retention strategies which can lead employees to become disinterested, which in turn can lead to lower productivity levels and employees leaving the organisation quicker than expected, especially in more technologically advanced organisations (Kaur, 2013).
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Rulashe (2011) maintains that performance management is declining as a practice as new generations enter the workforce, therefore companies need to make way for innovative methods that can help record and communicate progress in contemporary manner. This will not only allow employees to be more engaging in the workplace and with organisational systems but they will also see that there needs to be unison in the workplace in order to achieve the goals of the organisation (Lockwood, 2013). Once there is unison in the workplace and organisational goals are aligned, employees are keener to stay in an organisation. Organisations can still emphasise employee satisfaction while retaining its talent by means of keeping employees engaged and interested (Nasir, 2017).
4. Conclusion
Human resource management has come a long way from just being administrative function for the personnel within an organisation, it has now become one of the most important functions that is critical to the success of an organisation. In addition to that, employees now are not just seen as a means to an end (productivity), they are instead seen as assets that should be taken care of and managed properly. Due to the emerging role of strategic HRM, organisations have had to deal with the impact of 21 st
century trends on the employees and the HRM function. The role of HR has transitioned, and is still transitioning for some, towards becoming strategic partners of an organisation which in turn forces HRM to coordinate with all the functions and provide support in various activities. With these new trends, companies are faced with certain challenges that impact on the organisation, these trends include; multigenerational workforce, diversity, technological advancement globalisation, and performance management, employee engagement, and attrition rates.
However, new trends will always arise and with that, new challenges. These challenges can best be managed when the HRM function implements essential HR practices, such as; effective recruitment and selection policies, rotation of jobs, encouraging diversity and accepting a multigenerational workforce in the workplace, efficient training and development of the work force, developing innovation and keeping up with technological advancements, accurate delegation of duties and responsibilities, managing employees’ performance and giving feedback. It is the responsibility of HRM to enhance organisational efficiency and effectiveness by adding value and obtaining competitive advantage over competitors for long-term survival in the multifaceted and vastly uncertain market place.
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