The Age of the 4G Workforce: What's to be done about ageing workers?

The CIPD has published a report last month which urges employers to begin preparations for an age-diverse workforce as the 4G generation is on the horizon. 
At present, only 1/3 of employees have an HR strategy in place for managing ageing employees. 

Despite the fact that the UK's working population is getting older, the report declares that 69% of employers have no HR strategy in place to manage their ageing workforce. 

Businesses need to start preparing for a more age-diverse population now or they risk skills shortages and being at a competitive disadvantage in the future, the report ‘Managing an age-diverse workforce’ said.

The report is based on recent research conducted by the UK Commission for Employment and Skills (UKCES). The latest CIPD research reveals that issue at hand is that people are delaying retirement into their 70s and 80s, thereby entailing workforces which span four generations, otherwise known as "4G" workforces. This is a growing trend, At present,  1 per cent of employers have employees aged 64 and above, but more than half of the employees questioned by the CIPD said they "plan to retire at 66 or later".

Despite the increasing trend, the report unveils that many employers were unprepared for this shift. 31% of HR divisions chose to react to challenges associated with ageing populations as and when they arose, as opposed to having a solid HR strategy in place. Moreover, only 78% of employers have the relevant resources in place in order to provide sufficient levels of training to all age groups. 

To add to this issue, the survey results reveal that one in five believing that their line-managers were ineffective at handling teams comprised of different generations. Despite this challenge, both employers and employees recognise the benefits that workers from different generations bring.

"Indeed, fears of intergenerational tensions in the workplace couldn’t be further from the truth. Companies report important business benefits such as knowledge sharing and enhanced customer service, while employees clearly enjoy the new perspectives and fresh ideas inspired by working with people of diverse ages" according to CIPD research analyst Claire McCartney.  She goes on to discuss that businesses must adopt a proactive attitude in order to best capitalise on available opportunities and benefits of age diversity in the workforce. For instance,she states that "practical and immediate steps [employers] should take include strategies to bring in and develop talent of all ages and providing line managers with more support.”

In lieu of these results, The CIPD plans to launch practical guide on how employers can manage an increasingly age-diverse workforce in Summer 2014. 

Image sourced from: darmano.typepad.com

ULRICH'S VIEW: Should we get rid of HR?

The debate arises out of serious and widespread doubts about HR's contribution to organizational performance. Ulrich agrees that there is a good reason for HR's struggling reputation. It is often ineffective, incompetent, and costly; in a phase, it is value sapping. But the truth is that HR has never been more necessary.

·         The competitive forces that managers face today and will continue to confront in the future demand organizational excellence. To state it plainly: achieving organizational excellence must be the work of HR.

·         The question for managers, then, is: What should we do with HR?

The answer is: create an entirely new role and agenda for the field that focuses it not on traditional HR activities, but on outcomes. HR should be defined by what it delivers – resultsthat enrich the organization's value to customers, investors, and employees.

·         HR can help deliver organizational excellence in the following four ways:

1. HR should become a partner with senior and line managers in strategy execution.

2. It should become an expert in the way work is organized and executed, delivering administrative efficiency while quality is maintained.

3.It should become a champion for employees, representing their concerns to senior management and at the same time working to increase employee contribution.

4. HR should become an agent of continuous transformation, shaping processes and a culture that together improve an organization's capacity for change.

But the fact remains: the activities of HR appear to be - and often are - disconnected from the real work of the organization. In fact, the primary responsibility for transforming the role of HR belongs to the CEO and to every line manager who must achieve business goals.--> The reason? Line managers have ultimate responsibility for both the processes and the outcomes of the company. It follows that they should lead the way in fully integrating HR into the company's real work. Indeed, to do so, they must become HR champions themselves. More important, they must hold HR accountable for delivering it.

WHY HR MATTERS NOW MORE THAN EVER

Companies today face five critical business challenges. These challenges require organizations to build new capabilities. It is HR's opportunity to play a leadership role in enabling organizations to meet the following competitive challenges:

Globalization - With the rapid expansion of global markets, managers are struggling to balance the paradoxical demand to think globally and act locally. That imperative requires them to move people, ideas, products, and information around the world to meet local demands. Globalization requires that organizations increase their ability to learn and collaborate and to manage diversity, complexity, and ambiguity.

Profitability through Growth - The drive for revenue growth puts unique demands on an organization. Companies seeking to acquire new customers and develop new products must be creative and innovative, and must encourage the free flow of information and shared learning among employees. They must also become more

market focused - more in touch with the fast changing and disparate needs of their customers. And companies seeking growth through mergers, acquisitions, or joint ventures require other capabilities.

Technology - Ideas and massive amounts of information are in constant movement. The challenge for managers is to make sense and good use of what technology offers. Managers will need to figure out how to make technology a viable, productive part of the work setting.

Intellectual Capital - Knowledge has become a direct competitive advantage for companies selling ideas and relationships and an indirect competitive advantage for all companies attempting to differentiate themselves by how they serve customers. From now on, successful companies will be the ones that are the most adept at attracting, developing, and retaining individuals who can drive a global organization that is responsible to both it customers and the growing opportunities of technology.

Change, Change, and More Change – Constant change means organizations must create  healthy discomfort with the status quo, an ability to detect emerging trends quicker than the competition, and the agility to seek new ways of doing business. In other words, companies will need to be in a never-ending state of transformation, perpetually creating fundamental, enduringchange.

HR'S NEW ROLE

The five challenges described above have one overarching implication for business: the only competitive weapon left is organization. In the new economy, winning will spring from organizational capabilities such as speed, responsiveness, agility, learning capacity, and employee competence. Successful organizations will be those that are able to quickly turn strategy into action; to manage processes intelligently and efficiently; to maximize employee contribution and commitment; and to create the conditions for seamless change. The need to develop those capabilities brings us back to the mandate for HR. Let's take a closer look at each HR imperative in turn:

--> Becoming a Partner in Strategy Execution
 Strategy is the responsibility of a company's executive team - of which HR is a member. However, HR executives should impel and guide serious discussion of how the company should be organized to carry out its strategy. Creating the conditions for this discussion involves four steps:

1.HR should be held responsible for defining an organizational architecture. Jay Galbraith's star model identifies five essential organizational components: strategy, structure, rewards, processes, and people. The well-known 7-S framework by McKinsey & Company distinguishes seven components in a company's architecture: strategy,

structure, systems, staff, style, skills, and shared values. It's relatively unimportant which framework the HR staff uses to define the company's architecture, as long as it's robust. What matters more is that an architecture be articulated explicitly.

2.HR must be accountable for conducting an organizational audit. Organizational-architecture plans are critical in helping mangers identify which components of the company must change in order to facilitate strategy execution.

3. HR must identify methods for renovating the parts of the organizational architecture that need it. HR managers should be assigned to take the lead in proposing, creating, and debating best practices in culture change programs.

4.HR must take stock of its own work and set clear priorities. HR needs to join forces with operating managers to systematically assess the impact and importance of each one of these initiatives.

This is a new role for HR and therefore it may have to acquire new skills and capabilities. In time, the concept of HR as a strategic partner will make business sense.

-->Becoming an Administrative Expert - In their new role as administrative experts,

however, they will need to shed their traditional image of rule-making policy police,while still making sure that all the required routine work in companies is done well. In order to move from their old role as administrators into their new role, HR staffwill have to improve the efficiency of both their own function and the entire organization. But decreased costs aren't the only benefit of HR's becoming the organization's administrative expert. Improving efficiency will build HR's credibility, which, in turn, will open the door for it to become a partner in executing strategy.

àBecoming an Employee Champion - Companies cannot thrive unless their employees are engaged fully. Engaged employees - that is, employees who believe they are valued - share ideas, work harder than the necessary minimum, and relate better to customers, to name just three benefits. In their new role, HR professionals must be

held accountable for ensuring that employees are engaged - that they feel committed to the organization and contribute fully. HR must now take responsibility for orienting and training line management about the importance of high employee morale and how to achieve it. In addition, the new HR should be the employees' voice in management discussions.

àBecoming a Change Agent - The new HR has as its fourth responsibility the job of building the organization's to embrace and capitalize on change. HR's role as a change agent is to replace resistance with resolve, planning with results, and fear of change with excitement about its responsibilities.

Perhaps the hardest and most important challenge facing many companies in this era of flux

is changing their culture. In helping to bring about a new culture, HR must follow a four-step process:

-First, it must define and clarify the concept of culture change.

-Second, it must articulate why culture change is central to business success.

- Third, it must define a process for assessing the current culture and the desired new

culture, as well as for measuring the gap between the two.

-Fourth, it must identify alternative approaches to creating culture change.

FOUR CHANGES FOR THE LINE

Perhaps more important, than the new mandate for HR, it also requires that senior executives change what they expect from HR and how they behave toward the HR staff. The following are four ways senior operating managers can create an era in which HR is focused on outcomes instead of activities:

• Communicate to the organization that the "soft stuff" matters - For instance, CEO Jack Welch of General Electric claims he spends 40% of his time on people issues. For HR to be taken seriously, senior managers must demonstrate that they believe typical HR issues - the soft stuff like culture change and intellectual capital – are critical to business success. Operating managers can signal this belief in several ways. They can talk seriously about how organizational capabilities create value for investors, customers, and employees. They can invest the time needed to make sure organizational changes are debated and implemented. They can include HR professionals in strategy discussions and state explicitly that without the collaboration of HR, strategies are more hopes than realities, promises than acts,

and concepts than results.

• Explicitly define the deliverables from HR, and hold HR accountable for results– A company has a much better chance of achieving its goals if senior managers state specifically what they expect from HR and then track, measure, and reward performance.

• Invest in innovative HR practices - Investing in new HR practices is another way to signal to the organization that HR is worthy of the company's money and attention. It is also a way to make sure that HR has the tools, information, and processes that it needs to execute its new mandate. As new practices are identified, line managerspractices should focus on learning not only what works elsewhere but also how a new practice should work in the company's unique competitive situation.

• Upgrade HR professionals - Finally, the hardest but perhaps most important thing senior managers can do to drive forward the new mandate for HR is to improve the quality of the HR staff itself. Companies need people who know the business, understand the theory and practice of HR, can manage culture and make change happen, and have personal credibility. Regardless, HR cannot expand its role in an organization without the requisite expertise.

Becoming a strategic partner demands a degree of knowledge about strategy, markets, andthe economy. Becoming an administrative expert demands some knowledge of re-engineering, as well as the intricacies of what the line actually does. If HR is to effect real change, it must be made up of people who have the skills they need to work from a base of

confidence and earn what too often it lacks - respect.

HARD WORK AHEAD

Senior executives who recognize the economic value and the benefit to their customers of intellectual capital and organizational capability need to demand more of the HR function. They need to invest in HR as if it were a business. And they must get beyond the stereotype of HR professionals as incompetent value-sapping support staff. It's time to destroy that stereotype and unleash HR's full potential.

Managing Overqualified staff in the workplace

What do we mean by overqualification?

Overqualification (or underemployment) is the situation where individuals have surplus qualifications such as education, skills, knowledge, abilities and experience that exceed job requirements.

The term can be expressed in terms of:

• Objective Overqualification: Focused on education from the perspective of potential employers. 
• Subjective Overqualification: Focused on individual perception, a predictor of attitudes and behaviours. 

It has been said that overqualification leads to a number of adverse consequences such as disengagement with work, low job satisfaction, and turnover. However, is it all that bad?

Perceived Benefits of Over Qualification

In cases where employees have chosen jobs for which they are overqualified so that they can handle their non-work responsibilities and interests, overqualified employees may experience lower levels of work–family conflict. A high-level employee may want to leave behind a high-paying corporate job demanding 60- hour work weeks in favour of spending more time with family and friends and devoting more time to hobbies, which would result in lower levels of work–life conflict and higher satisfaction with life.

·                Moreover, individuals may take a job for which they are overqualified but still get a deep sense of satisfaction from it if the job fits with their values and interests. For example, individuals may be attracted to occupations such as teaching, selling medical equipment even when they are overqualified because working in these jobs would give individuals a sense of helping others, doing meaningful work, and performing a job that satisfies their sense of belonging. 

-      Thus a consideration of over qualification within the broader meaning of work for the individual— such as the values fit of the job and the organization, or whether the job is instrumental for achieving some non-work goals—may provide a better picture of whether over qualification will hamper or enhance productivity and morale and provide the individual with a sense of enjoyment.- In fact, García-Montalvo and Peir ´o (2008) pointed out that choosing a job for which one is overqualified is more frequent among Spanish young adults when they give a strong priority to a job with a permanent contract and a regular work schedule or when they have no geographic mobility.
        
        Being overqualified may have positive consequences when there are other, compensating factors that add to the desirability of the position and when the person makes a positive choice to take the position rather than doing so solely for reasons of extreme need or economic desperation.

What About Organizational Practices?

Although a number of questions remain about the positive and negative effects of over qualification, we provide some suggestions for organizational HR practices.

Recruitment and Selection

-Workers who bring additional skills to the job can provide increased opportunities for organizations, perhaps even a competitive advantage.-What may be most important is that both employees and employers go into this situation ‘‘with their eyes open’’ so it is clear what the employment conditions will be and what each party would gain from the employment situation. This avoids feelings of psychological contract violations and feelings of inequity on the part of workers, and helps employers recognize whether the additional qualifications and skills provided by an individual worker are actually relevant and beneficial to the organization. Furthermore, what the employer can and cannot provide to the overqualified individual as part of the employment relationship should be made clear up front.-In short, the more apparent the conditions of the over qualification relationship are at the time of hire, the better. Finally, although by necessity organizational decision makers rely more on objective measures of over qualification

-During the selection process, they should remember that such objective measures are different from subjective over qualification as perceived by the employee and that the latter may be most relevant to attitudes and behaviour.

Performance Management & Reward systems

-When taking on overqualified employees, organizations should be prepared to provide the additional opportunities and rewards for these workers to gain the greatest advantage from them. -Furthermore, because there are many factors that may mitigate the negative consequences of overqualification in the minds of workers (e.g., fulfilling work, facilitating family responsibilities), organizations should be aware of what overqualified individuals may gain from the employment relationship and support these to the extent possible. 

-Most important, organizations should follow through on any agreements made with overqualified individuals at the time of hiring.

Training and Development

-Keep them challenged and stimulated. One way to do this, which should also lead to a better utilization of the skills of overqualified workers, is to train them in areas that will help them to progress. For example, an overqualified job applicant may be hired for a low-level position with the purpose of grooming them for advanced management positions, but this benefit will only be realized if the organization can provide them with the necessary management training. In other words, an overqualified individual may still need training in other areas to be effective. 

-In addition, organizations may need to train managers and supervisors on how to recognize the potential value of overqualified job applicants and how to best use the skills of these over qualified individuals.

To Conclude..

-Over qualification is an issue that is salient to both employers and to employees, and through the years it has been assumed to negatively affect attitudes, performance, and turnover.However the empirical research on over qualification is not conclusive in this regard.

-In fact, although over qualification can clearly have serious, negative outcomes, we believe that there are times and circumstances when overqualified employees may provide a valuable resource to organizations, and certain over qualification situations may actually benefit workers.

-What we need at this point is a better understanding of what over qualification is, how to measure it, how it is perceived by different actors in the organizations, how it is experienced by different employees, and when it might actually be beneficial… In other words, how can individuals and organizations make the best out of a potentially bad situation?

A New Model of CSR for HR

As the global market changes, companies have the opportunity to capitalise and move with these changes by greater involvement of corporate social responsibility (CSR), which this article argues should be aligned as closely as possible with and as a key part of business strategy.

Businesses must play a part in creating healthy societies and create shared value rather than just try to maximize profit, in order to drive the economy, and many forward-thinking businesses seem to be trying to do just this – crucially led by HR.

Although reputation is a strong driver of CSR, so is the need to think strategically about “mega-trends” (which can be greatly innovative for new products and services), as well as improving trust and growing the business by finding commercially sustainable ways to fix problems. Social and business value must go hand-in-hand, as merely creating social value is not enough – there must be a higher purpose. According to James Watts, CSR is “not something you choose to do or not do”; it is an obligation of any big business to give back to the community.

One useful strategy to understand markets and address related challenges is to consult with and partner third sector experts in charities and volunteer organisations as a form of “immersive, experiential learning” – this helps to embed community involvement deeply into business strategy, and in return, the third sector partner gets strategy advice and help from the organisation.

HR can take responsibility for CSR by linking it to performance management, in order to make workforces think about CSR in everything that they do. One example is Anglian Water, who now refer to themselves as a “campaigning organisation” and aim to engage employees and customers in valuing their product. According to Phil Brown, head of people development: “we are asking people to think slightly differently, and that means managing them in a different way.”

This will require business leaders who have powerful, personal first-hand experience, and understand the importance of sustainability, market diversity and customer needs. This will enable the alignment and integration of CSR into the business strategy, as well as to make the business value obvious to all its stakeholders.

Ben Brown, responsibility manager at Sky: “If we can help address these issues, it makes society more resilient, which makes our business more resilient.”

Successful CSR that reaps business benefits does not always have to involve high costs – for example, volunteering and mentoring programs can be a good way to put learning into practice, and other forms of giving back help to deliver more to the community when the business is fully invested and is measuring benefits. The link between HR and CSR is slightly blurry at the moment, but it can be cost-effective, and deliver benefits to both – HR are increasingly interested in "stretching their people’s skills in the community”.

Additionally, CSR can be a useful competitive advantage when it comes to recruitment: 70% of Millennials surveyed by Deloitte in 2011 said that their decision to work at companies is affected by the companies’ commitment to the community.

Four key ingredients to achieve real shifts in mindset and new sustainable behaviours:

1.      First-hand experiential learning of today’s global and societal challenges is crucial.

2.      People need to realize and understand the business relevance of their experience in addition to the experience.

3.      Senior leadership must provide clear sponsorship and involvement.

4.      After the experience, active support must be provided once back in the organisation to make the mindset and behaviour more habitual. 

Embracing the Virtues of Virtual Teams

Dispersed teams can actually outperform groups that are in one location. To succeed, however, virtual collaboration must be managed in specific ways. In the past, managers used to co-locate team members because of the high levels of interdependencies that are inherent in group work. Recently, though, more and more companies are beginning to organize projects over distance, with teams increasingly consisting of people who are based in dispersed geographical locations, come from different cultural backgrounds, speak different languages and were raised in different countries with different value systems.

Over the past 10 years, various studies have investigated the differences in performance of co-located and dispersed teams, quietly assuming that members of the latter never meet in person and members of the former work together in the same office throughout a project. And as past research has repeatedly shown, even the smallest degrees of dispersion, such as working on different floors in the same building, can greatly affect the quality of collaboration. 

Such studies have found that virtual teams offer tremendous opportunities despite their greater managerial challenges. In fact, with the appropriate processes in place, dispersed teams can significantly outperform their co-located counterparts.

So here's what you need to know about the bright and dark sides of dispersion:

The teams level of dispersion is never fixed, it is flexible. Thus when making decisions, managers must take into account the various pros and cons of dispersion.

• Pros: Heterogeneous knowledge resources, Utilization of cost advantages, Access to diverse skills and experience, Knowledge about diverse markets.

• Cons: Language differences, Cultural incompatibilities, Difficulties establishing “common ground”, Fewer synchronous face-to-face interaction, and good teamwork more difficult to achieve.

Bear in mind that despite the cons above, dispersion potentially has substantial advantages:

• First, in order to accomplish increasingly complex activities such as research and development, companies (particularly larger ones like IBM, General Electric or SAP) tend to cluster their competencies in different centres of excellence, which are often scattered geographically although part of an international corporate network of operations. SAP, for instance, has its global headquarters in Walldorf, Germany, but has built up large R&D centres in India, China, Israel and the United States in order to reduce costs and leverage their global know-how in software engineering.
•  Within each of these competence centres, the depth of expertise tends to be very strong, while the diversity of functional backgrounds is relatively weak because of specialization. Managers can take advantage of this organizational structure by assembling employees from different locations in such networks to create a team that can optimally integrate the different pools of expertise to perform a particular task.
• Moreover, higher levels of structural and demographic diversity in dispersed teams can be highly beneficial. Structural diversity is a direct consequence of having team members from multiple locations associated with different business units and reporting to different managers. Such diversity can be highly valuable for teams, because it exposes members to heterogeneous sources of work experience, feedback and networking opportunities. In addition, virtual team members are often diverse in nationality. Although such diversity may complicate team dynamics, it can also enhance the overall problem-solving capacity of the group by bringing more vantage points to bear on a particular project.

The Do’s and Dont’s of managing dispersion

The following key lessons can help companies maximize the performance of their virtual teams:

1.      Don’t underestimate the significance of small distances

Research shows that performance is noticeably lower for teams with people located in the same building but on different floors when compared with teams where all members are on the same floor. Interestingly, teams with members in the same building but on different floors also performed worse than teams with greater degrees of dispersion, including those that had members spread across a city, country or even continent. In fact, the only teams that fared worse were the intercontinental teams, with a significantly higher level of inter-cultural diversity and temporal dispersion (spanning many time zones).

Explaining these results: Teams with members in the same building, albeit on different floors, do not usually consider themselves as being dispersed and, hence, may easily underestimate the barriers to collaboration deriving from, for instance, having to climb a flight of stairs to meet a team mate face to face. In contrast, groups that are dispersed across a country or continent are more aware of their situation and may make extra efforts to improve such vital processes as task-related communication and coordination. To prevent that from happening, companies such as Cisco Systems, BMW and Corning have designed their office layouts to maximize interpersonal interactions. At Cisco Systems Inc.’s sites in Germany, for example, only three people have their own individual offices. All of the other 850 employees work in an open-space maximising opportunity for interaction.

2.      Emphasise team work skills

Many companies make the mistake of staffing such teams primarily on the basis of people’s expertise and availability. Instead, managers must also consider social skills — a major prerequisite for good teamwork. It’s unrealistic to bring together individuals from different locations with the expectation that they will automatically know how to collaborate in a virtual environment. Groups with increasing levels of dispersion are also progressively more dependent on their level of teamwork, specifically, their ability to perform key processes such as mutual support, communication and coordination. In order for virtual teams to achieve their greater potential (and take advantage of their functional and structural diversity), members must first and foremost be able to establish a basis for the effective exchange of their varying capabilities — all of which requires teamwork-related skills as a critical ingredient. Otherwise, the virtual team could very likely perform worse than a co-located group.

3.      Promote self-leadership across the team
 

When a group is closely co-located, an individual leader can more easily detect any deficiencies in teamwork and address them with a hands-on managerial style. An interpersonal conflict, for example, might be resolved by talking in person with the different parties in an informal setting. Such an approach is largely non-existent in virtual teams. Geographic dispersion and cultural diversity make it difficult for any individual leader to ensure that the team is functioning effectively. Even though the advanced use of the latest information and communications technologies can help, time zone differences and cultural problems can’t be overcome. Members generally need to be aware of the difficulties of dispersed collaboration and find effective ways to overcome those obstacles on their own. This highlights the need for people to be more self-sufficient in how they manage their own work because the team leader is less in a position to help. Consequently, companies that are serious about virtual collaboration must target their HR efforts not only at designated team leaders but also at team members so that those individuals can develop the skills necessary to work in a virtual setting.

4.      Provide for face to face meetings

Particularly effective for initiating and maintaining key social processes that will encourage informal communication, team identification and cohesion. A project kick-off meeting, for example, can be used to bring everyone together in one location for several days so that people can develop a shared understanding of the task at hand and begin to identify with the team.

5.      Foster  a global culture

Accordingly, managers and team members need to recognize and frame their company as such, communicating the international nature of the organization’s operations and markets. Various human resource strategies can help foster that mind-set, including temporary staff assignments at foreign locations and inter-cultural training. Nestlé, General Electric, IBM and SAP — all known for the global reach of their business activities — provide good examples of how to actively foster a global employee mind-set. Managers at Nestlé S.A., for instance, are expected to move to another country every three or four years so that they can learn about the specifics of each of those markets and develop a global mind-set from their experiences. Such practices advance the development of diversity-friendly attitudes and the ability to work in different contexts, which in turn help employees cope with the challenges of distance when working on virtual teams.

Concluding Points

Virtual teams can outperform their co-located counterparts when they are set up and managed in the right way. A firm needs to ensure that the group has the necessary socio-emotional and task related processes in place. Only then can virtual teams effectively integrate dispersed knowledge to take advantage of their cultural and structural diversity, thereby avoiding some of the drawbacks of dispersion while reaping its benefits.

image sourced from: biz30.timedoctor.com

Do we really need HR? -Hot topic of the week!

Bernard Marr,Best-Selling Author and Enterprise Performance Expert has just written an article expressing that we no longer require HR departments: 

http://www.linkedin.com/today/post/article/20131118060732-64875646-why-we-no-longer-need-hr-departments?trk=tod-home-art-list-large_0

A follow-up article has been written in response to Marr's by Josh Bersin,Principal and Founder, Bersin by Deloitte who argues for the vitality of HR in business as we know it today.

http://www.linkedin.com/today/post/article/20131118164721-131079-why-we-do-need-hr-departments

I'm with Bersin. What's your opinion?

And so the On-going debates in HR continue....

Recent debates in HR:
-Most current debates generally focus on the extent and nature of the responses needed in the face of development in the business environment. Three of the most prominent current debates focus on:

i. the nature of the psychological contract
-due to the evolving environmental pressures there is a significant and fundamental change the “psychological contract”. This refers to expectations that employees have about the role that they play and about what the employee is prepared to give them in return. By its nature, the psychological contract is not a written document. Rather it exists within people’s heads.
-while people disagree about the extent to which this change has in fact occurred, there is general agreement about the phenomenon itself and the notion that an “old” psychological contract to which generations of employees have become accustomed is superseded to some extent by a “new” psychological contract which reflects the needs of the present business environment.

Old Psychological Contract (From an employee perspective)
“I will work hard and act with loyalty towards my employer. In return I expect to be retained as an employee provided I do not act against the interests of the organisation. I also expect to be given opportunities for development and promotion should circumstances make this possible.”

New Psychological Contract:
“ I will bring to my work effort and creativity. In return I expect a salary that is appropriate to my contribution and market worth. While our relationship may be short term, I will remain for as long as I receive the developmental opportunities I need to build my career.” – Involves a sense of less job security and less loyalty from employers in return. Instead the employees will be flexible and will be given developmental opportunities in return,

 

-the key question is, how far has a change of this nature actually occurred? Are we really witnessing a slow decline in the old contract and its replacement by the new one? Or have reports of its death been exaggerated? This is a highly disagreed issue. Evidence of reduced employee loyalty have been found by Coyle et Al (2000) however Guest et Al (2000) have found little change in the state of the psychological contract.

ii. Best Fit HR strategy Vs. Best Practice?

Best-practice theory : The 'best-practice' theory is based on the assumption that HR practices observed in high-performing firms can be transformed to other companies with the same results. Pfeffer's list of seven HR practices for competitive advantage through people is one of the best known set of best-practices.
1. Employment security
2. Selective hiring
3. Self-managed teams or team working
4. High pay contingent on company performance
5. Extensive training
6. Reduction of status differences
7. Sharing information

In essence, recruiting and retaining talented, team-oriented, highly motivated people is seen to lay a basis for superior business performance or competitive advantage. But this theory, like several other universal models, has been criticised for a variety of reasons:
• Disconnection from company's goals and context
• Disregard of national differences such as management practices and culture
• Inconsistency between the RBV's emphasis on in-imitability and best-practice universalism
Although best-practices are too general, some researchers have found empirical evidence showing a correlation between the application of best-practice theories and company's performance. The reason can be seen in the validity of the underpinning "AMO" (ability, motivation, opportunity) framework.

Best-fit theory : The contingency or "best-fit" approach questions the universality assumption of the best-practice perspective. Instead it emphasises the fit between HR activities and the organisation's stage of development ("external-fit"). According to the "best-fit" theory, a firm that follows a cost-leadership strategy designs narrow jobs and provides little job-security, whereas a company pursuing a differentiation strategy emphasises training and development. This approach is a counterpart to the "one strategy fits all" seen in Pfeffer's seven best practices. The 'best-fit' school, therefore, argues that all SHRM activities must be consistent with each other (horizontal fit) and linked to the strategic needs of the business (vertical fit).

However, 'best-fit' approach has been criticised for the following reasons:
• Lack of alignment with employee interests, compliance with prevailing social norms and legal requirements
• Too simplistic view of business strategy (the reality is more complex than only innovation, cost-reduction and quality-enhancement strategy in the Schuler and Jackson model)
• Too much focus on existing competitive strategy (reactive) rather than on-going environmental changes (proactive)

iii. Predictions about the future of work:

-this is a highly speculative debate, but predictions about the future of work are very important now from a public policy perspective. Why? --> Judgements about employers’ HR needs in the future must determine decisions about education and training now. Government actions in the fields of economic policy, employment legislation and immigration are also affected.
- Authors such as Handy and Greenfield argue that the world of work (i.e. the type of work we do and the nature of contractual arrangements will change profoundly as we complete our journey out of the industrial era into a new post-industrial age.

Consequences will be:

1. A marked shift into knowledge work. In the future, most people will be employed to carry out tasks which involve the generation, interpretation processing or application of knowledge. We will see further declines in manufacturing activity. More specialists will be employed (demand for professional and technical people will increase, which demand for lower skilled, manual workers will fall). This means that from an employer’s perspective, sustaining competitive advantage will mean more effective capacity to create and deploy knowledge than others.

2. Jobs will become more rare, where fewer people will occupy defined jobs in organisations. More people will work on a self-employed basis, carrying out time-limited projects for organisations. Due to the volatile nature of business, firms will not be able to guarantee long term work and long term employment contracts will reduce. (lower job security).

Note these consequences are rational as they are based on the face of recent business trends and globalisation. They are quite persuasive, yet highly controversial.