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Human capital - the talent, skills and knowledge of an organization - is one of those buzzwords that makes the rounds periodically. The concept of leveraging the human resources of an organization is not new, but the reality is that few companies realize the importance of looking beyond employees as merely an expense and recognizing the intrinsic value of human capital. The key is to calculate the return on investment (ROI) of that capital and leverage it to increase revenues. Of all the assets an organization has, the only one that produces any value is human capital. "You can have the most advanced equipment, but it just sits there until a human being leverages it, " says Dr. Jac Fitz-Enz, founder of the Saratoga Institute and author of The ROI of Human Capital. "Human beings are the only active assets a company has. " An enterprises, industries and countries are faced with grater competition as market are opened to global competition, the competitiveness of an enterprise or economy in the globalized market depends largely on its ability to adapt to changes in markets and to take advantage of the latest technological innovations. To enhance this ability, the labor market have to be made more flexible.
The terms labor flexibility can have two different interpretations. The first interpretation is so called negative flexibility which focuses on making workers more disposable and more adaptable to the changing requirements of the employer. Flexibility, as defined in this way, is opposed by most trade unions. The alternative to this meaning I flexibility in the interest of the workers.
It allows greater freedom for workers in organizing their work and private lives, and also stimulates skilled and ambitious workers, because they have a better opportunity to progress. What is labor flexibility? Labor flexibility can be defined as the ability of a firm and its employees to: adjust the level and timing of labor inputs in response to changes in demand vary wage levels according to productivity and / or profitability change workers tasks in response to changes in demand. There are four main types of flexibility: time flexibility flexible employment pay flexibility work organization flexibility.
Improving every type of flexibility, appointed main advantages, the enterprise can create its own HR strategy. The main advantage of time flexibility is a worked-oriented meaning of flexible working time which includes the idea of time sovereignty: the ability to influence the patterns of the working day, week, year and lifetime to optimize the temporal linkages between employment, leisure, career development and domestic life. The flextime provides for personalization of the working day. Traditional rigid conceptions of working time do not anymore suit the diversity of employee interests.
Working-oriented time flexibility leads to more women, particularly mothers, entering the workforce, encourages life-long learning as more time is allowed for study and training, and enables older workers to continue working while enjoying some of the benefits of retirement. This can be beneficial to employers as well, as they have a lager, more diverse, and higher skilled supply of labor and can negotiate time schedules that benefit both employer and employee. One trend annual ization of working time, which refers to the practice of calculating the working time on a yearly basis and enabling the working time to vary from week to week. but time flexibility has another type. It involves making workers more available and disposable to suit the changing requirements of employers.
This can mean the extension of working time to unsocial hours and days, e. g. evening and night work or weekend work. It can also mean payment only for those hours when the employee can actually used at work.
An example is zero-hour contracts where the employee must be available, but is paid only if called to work. This can be very beneficial for employers, as labor expenses are incurred only when labor inputs are necessary. But treating labor mainly as a cost, as opposed to a valuable asset, also tends to cause the employees to be less loyal and less skilled, leading to higher employee turnover and lower productivity. Flexible Employment Flexible employment is any form of employment that is not full-time employment for an indefinite duration.
Similar to the time flexible work described above it is also called atypical employment, contingent employment, precarious employment. It provides employers with an alternative standard, full-time, open-ended employment. It can be favorable for employees, because they could have more than one job at the same time and can freely organize their private lives. It provides the labor market with mobile workforce. Its main types are: 1) part-time employment, 2) temporary work, 3) casual employment, 4) employment under training contracts, 5) seasonal employment.
Of coerce, this type of emplacement not for everyone. Most people still desire a more traditional type of full time emplacement. Pay Flexibility Throughout the world both employers and governments are today seeking to enhance pay flexibility. Pay flexibility refers to the responsiveness of wages to changes in individual and collective productivity, and to competitive cost pressures exerted by markets. The current debate among paying is focused on the following aspects: systems of wage bargaining minimum wages linking pay to performance wage indexation alternative forms of remuneration. The advantage of pay flexibilities can helps to choose one most suitable way of payment for future HR strategy.
Wage barbarian tend to focus on the level at which bargaining takes place: should it take place at the centralized or branch level, or at enterprise level where it might take better account on the particular conditions of the firm. Minimum wages are often seen as an obstacle to job creation, in particular for young and lower-skilled applicants for job sector, as they impede employers from recruiting workers at the lowest wage scale. Linking pay to performance is viewed as a mean of motivating workers and improving the overall productivity of the enterprise. Most such pay schemes are using quality, cost reduction, and adaptability as the means to measure performance rather than simple output. Another trend is to reward work group or company performance rather than individual performance.
Profit sharing rewards improves productivity, quality, cost cutting or other facts that improve the firms or work groups performance. Wage indexation is considered to reduce the responsiveness of the labor market to changes in labor supply and demand by creating downward rigidity of real wages. Alternative forms of remuneration include stock or stock options, bonuses based on company or division performance or profitability, and awards (of cash, travel, promotion etc. ) Work Organization Flexibility Traditional work organization established a workplace where front-line workers had very little control over their job. Changes in work organization are needed because of technological change, customer demand for higher- quality goods and services, increasing global competition, and a better educated workforce. New forms of work organization include: dismantling job classifications cross training workers to perform multiple tasks promoting workers Many employers have discovered that they can increase competitiveness by introducing changes in work organization, including streamlining work practices, reducing the number of job classifications, expanding job definitions and promoting greater cooperation and teamwork. This also provides the opportunity for the workers to participate in managing the organization.
Employers benefit from having front-line workers contribute their first-hand knowledge and expertise, and workers benefit from having a forum for their ideas and concerns. Changes in work organization have accelerated in recent years as competition has intensified, new technology requiring multiple skills has been introduced and new management concepts like Just in Time, Total Quality Management, and Total Productive Maintenance have been popularized. But despite the growing need for greater flexibility on the job, not all attempts to introduce changes in work organization have run smoothly. The movements from one mode of work organization to another are very complicated. Successful introduction of work organization flexibility depends on a number of factors, not less a commitment from both management and workers to implement these changes.
It requires more active involvement and participation of workers. For instance, in a restricted work environmental workers are typically called upon to use their problem-solving capacities, rather than relying on management to resolve every issue that arises. This requires a change in mentality and habits. It also requires training so that workers have multiple skills and the ability to manage. A recent Industrial Society survey of 516 human resource specialists found that 91 % of respondents' organizations use some form of flexible working. This compares with 84 % in 2002. 75 % of respondents said that flexible working made good business sense for the organisation, with almost two-thirds (63 %) saying that it builds trust, loyalty and commitment.
But many businesses (31 %) apply flexible working practices only at an informal level. The Industrial Society argues that there is a risk that informal policies can short-circuit employee consultation and lead to inconsistencies. Other, less significant problems, may prejudice some employers against the concept, including: - communication difficulties (cited by 43 % of respondents) - difficulty in managing varying working arrangements (31 %) - and resentment from staff on standard contracts (27 %) Theo Blackwell, Industrial Society policy specialist says: "Our...
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Research essay sample on Minimum Wages Hr Strategy
