Welcome HRM as a Productivity Center in 21st Century

Figure 1 - 21st Century (Leonard, 2018)

According to Cindy (2007), in the past HRM department was considered as a cost center as it only costs money for the organization and do not brings any revenue or profit. HRM departments has tracked job applicants, maintained employee paperwork and filled annual performance evaluations. At that time line managers were responsible on managing employees directly.

But in 21^st century according to Bloom & Reenen (2010), a survey done on Fortune 1000 companies between 1987 to 2002, HRM department is considered as a productivity center as it enhances profitability via enhancing productivity of the employees. According to Burke & Esen (2005),  productivity is amount of output can be get from a one unit of input. With human usually it consider unit of time. Cindy (2007) stated that productivity can be achieved by having effectiveness and efficiency.

                    Figure 2 - Definitions of Effectiveness and Efficiency (Cindy, 2007)

Since both of them are important, most of the companies focus on achieving high efficiency, in order to earn profits.

Challenges for HRM on getting high efficiency from employees

According to Assesshub (2018) as Chairman Emeritus, Infosys Ltd. Mr. N.R Narayana Murthy quoted, with the changing complex business environment; tighter labor markets, economic uncertainty and globalization, to protect the respect and dignity among employees in order to get high quality minds to work for the company, is challengeable.

Sometimes HRM department might get unsatisfactory results on employee performances. This is a challenge for HRM, as main goal of any company is to earn good profit, this costs time and money in order to retune it. According a study done Cindy (2007) on her Human Resource Certification Institute, HRM should analyze situations and identified the cause whether inefficient employee or inadequate resources.

Table 1- HRM Department practices need to be followed when employees are not efficient enough

Cause	HRM department practice
Inefficient employee	On-site and off-site job trainings Recruit new staff
Inadequate resources	Find alternative resources for sufficient input.

        (Author developed based on Cindy, 2007)

Employees who developed professionalism and knowledge through experience have a good demand in job market and at any point there is a possibility of resigning which will be a cost for the company in terms of training and recruitment cost. This a great challenge for HRM to retain employees for a long time period. Employee development and engagement, health and safety, recognition, flexible work timings, work-life balance are some novel approaches to retain employees. 

References 

Assesshub. (2018). 9 challenges of human resource management and how to manage them. Retrieved May 7th 2018: 7.15am, from Assesshub: https://www.assesshub.com/blog/9-challenges-of-human-resource-management-and-how-to-manage-them.

Bloom, N., & Reenen, J. V. (2010). Human Resource Management and Productivity. Cambridge: Working Paper, (19), pp.160. 

Burke, M. E., & Esen, E. (2005). Workplace Productivity. United States of America: SHRM Research Department .

Cindy, W. (2007). 21st-Century Human Resource Management Strategic Planning and Legal Issues. London: Press.

Leonard, J. (2018). 21st Century Manufacturing: A World of Difference. The U.S. Chamber of Commerce Foundation , pp. 1-6.

Cause

HRM department practice

Inefficient employee

• On-site and off-site job trainings
• Recruit new staff

Inadequate resources

• Find alternative resources for sufficient input.