Influence of PEST Factor on HR Policies in the Spheres
Of Training and Development
Employee training and development is any attempt to improve current or future employee performance by increasing, through learning, an employee’s ability to perform, usually by increasing his or her skills and knowledge (1992). Employee training and development is important in any organization to increased job satisfaction and morale of employees. It is also important to increase employee motivation and the efficiencies in processes which would result to financial gain. Moreover, it can increase innovation in strategies and products. This would also result to reduction of employee turnover. Furthermore, training and development enhance company image and risk management.
An organization’s human resource development system is a key mechanism for enabling the achievement of business goals through what has been argued to be one of the few remaining sources of competitive advantage which are the people (1988). Policies of the human resource are affected by the macroenvironmental factors which are also known as the PEST factors. This includes political, economic, social and technological factors. One part of the human resource system, that is training and development, has been promoted as a key strategic lever in the attainment of competitive advantage (1994).
(1994); (1994); (1985) research suggests that training and development is linked to positive organizational outcomes. It is also closely linked to national contextual factors such as the political system that play an important role in determining the types and levels of skills available in the labor market as well as in shaping national values and approaches to training and development issues. National context can therefore be considered a key predictor of organizational HRD practice.
Human resource training and development policies differ from every other country. This is because the state determines the training policies an organization should disseminate to their organization.
(1994), (1995), (1997) concluded that there is considerable evidence that the national context of a firm’s operations plays a significant role in shaping organizational practices. (1994) identified clusters of countries showing how organizations in the different parts of the world operationalize HRM differently as a result of environmental pressures. In Germany, highly regulated institutional arrangement restricted the freedom of large companies to go to their own way on HRM and IR issues (1998). Cultural studies of (1990), (1986), and (1986) reveals that the people of different countries share values, cognitions, and behaviors which differentiate them from other cultures.
In addition, national legal frameworks also impact on organizations. collective agreements which differ in scope and centralization across countries define a range of organizational practices ( 1990; 1993;1994); while 1990 identified legal differences in education certification, recruitment and dismissal procedures in Europe and the United States that make for significantly different HRM practices in those countries. There is also evidence that specific legislation has led to different training and development.
French government, for example, re-evaluated organizational-based training that has resulted to companies with more than 10 employees required by law to spend a specified percentage of the annual pay-roll on training. Today, this policy has extended to include companies employing less than 10 people. Legislation also requires companies to devise a training plan in consultation with works councils (1996). The works council in France acts as an additional pressure to ensure that training and development is carried out by all organization.
(1992) argued that current government policy has resulted in an increased awareness of training investment levels by human resource specialists in French companies compared to other countries. (1994) also added that evidence has suggested that the legislation in France has had a positive effect on training expenditure which is, on average, higher than that for other countries in which reported in 1992 more than two percent of the annual salary and wages budget was spent on employee training and development by 80 percent of companies in France compared with 26 percent in the U.K. However, the impact on the efficacy of the employee development system is less clear.
In contrast, the U.K. government dismissed the idea of a training levy with the abolition of the Industrial Training Boards. Instead, intervention takes place through government policy aimed at influencing organizational training and development activity.
The three primary mechanisms for implementing government policy are: the promotion of ‘best practice’ via initiatives such as Investors in People (IIP) and National Training Awards (NTA). These initiatives aim to increase training levels which are criticized as being too low and detrimental to national competitiveness (1984; 1989, 1991; 1989; 1985).
Secondly is that local rather than national delivery of training via training and enterprise councils (TECs) and local enterprise councils (LECs) to effectively identify skill need and deliver against that need. They also focus on how employee development systems should be constructed to be effective and efficient (1995).
Finally, the adoption of a competence-based approach to vocational education in order to provide nationally recognized skills’ qualifications and meet the demands of employers. The current government policy is not without criticism ( 1995; Keep and Mayhew 1996). However, its emphasis is considerably different from that of the French government and as such is likely to have an impact on how employee development is managed in U.K. companies.
The economic system of a country also has significant impact on the human resource policies. For example, in China’s economy wherein there is an undergoing market transition from a centrally planned economy to a socialist market economy, that is, a market economy with Chinese characteristics. With this new market transition, management practices are affected especially human resource management practices and also human behavior needed much revision.
1989 states that production and reward systems are changing with a stronger emphasis on efficiency and performance. In addition, (1987, 1991) note that managers in China are already showing an increasing interest in using human resource techniques and motivational systems which emphasize productivity at the individual, group, and enterprise level.
Therefore, (1989) concluded that the transition from a centrally planned economy to a socialist market economy has resulted in significant changes in the economic system, which is and will continue to have major implications for the practice of human resource management.
According to (1990), training and development is clearly a need in China given the low efficiency and low productivity in China’s enterprises, as well as the relatively poor educational background of Chinese employees, with mismatch of employee skill and job requirements. (1990) note that in China, only about 10% of the population have tertiary level education, while in the USA it is 54.1% and in Norway, 86.9%. Only 30% to 40% of newly recruited workers of the urban or township enterprises had vocational or technical training ( 1992). It is estimated that by the year 2000, about 200 million members of the rural labor force will need new employment opportunities ( 1988). With this figures presented it is clearly shown the large gap the present educational and skill standards and the requirements of modern industry and technology. In addition, according to (1990), the more striking situation is the lack of suitably trained technical and professional personnel. (1990) notes that a major problem found by foreign joint venture companies in China is the shortage of well-educated people. This pattern was confirmed in a recent study by (1992) in which showed that the technical skills and qualities of employees in China were well below the demands of modern industry and technology, and stressed the necessity and significance of training and development in enterprises.
Training courses at the secondary or vocational technical level have been offered to employees along with on-the job training ( 1990). Moreover, management training has been given an unprecedented emphasis (1987: 1990). However, (1993) notes that in China, “training remains narrowly defined, in contrast to the Western HRM notion of planning for long-term staff development” (). With the market transition in China, a market economy has given enterprises more autonomy and decision-making power, some enterprises with “far-sighted” strategies have established scholarships or invested research and development funds in universities. This has not only helped the enterprises to develop their production but has also increased their ability to recruit the talented people they need (9 May 1993).
Moreover, technology has also influence the human resource policies and practices. The recent shift toward integrated human resource information systems technology and self-service functionality for employees and managers alike is a direct response to the competitive challenges of today’s knowledge economy. For this reason, offering technology-based self-service is now the preferred method for enhancing the lines of communication between the company and its employees. In addition, there are clear tangible rewards from self-service that include lower cost of operations, increased productivity and, for those who are prepared to leverage this advantage, the opportunity to firmly position HR as an organizational leader and strategic business partner.
SHRM HR Technology Survey Report (2005) reported that technology is now a fact of life–it has become an invasive part of everyday living. Technology can provide conveniences and allow for efficiencies both at home and in the workplace, particularly in relation to communication between people, as well as in relation to the secure storage of employee data. Unfortunately, the benefits of technological conveniences can quickly be lost and/or may not be realized at all if planning is inadequate and/or if unskilled staff does not understand how to capitalize on its use. The top three obstacles that make it challenging to implement an HR technology system in organizations are budget/funding approval, resistance to change and an infrastructure that has not been properly prepared.
According to The Investment is Paying Off 2003 report, human resource departments have been quick to adopt Web-based applications as a communication and transaction tool. The Internet has contributed to a new model for HR service delivery one that is beginning to make good on its promise of increased productivity and a change for the better in the routine activities of HR professionals. Of the companies surveyed, 60% report a reduction in HR administrative work as a result of employee self-service. Manager self-service, while still not as prevalent, is also achieving positive results, with 47% of respondents reporting less administrative work for managers and for HR overall. Over and above the reduced workload, respondents report significant improvements in both data accuracy and timeliness of self-service transactions. In addition to the workload reductions from Web-based self-service, organizations have been able to eliminate other HR service delivery “channels,” such as voice response systems and paper-based transactions, thus adding hard-dollar savings to the workload reduction
Credit:ivythesis.typepad.com
0 comments:
Post a Comment