The Impact of Technology on HRM
The business environment represents an important base for contemporary organizations, including the human resources management (HRM) activities. The internal and external environments that the HRM have to manage is a very complex process. The internal environment of HRM includes factors like the organizational mission, objectives and structure. The external environment of HRM includes factors like the economic, political, social and technological aspects (Boxall, Ang, & Bartram, 2011).
Michael Hill Diamond company was founded in 1979, currently, it operates 303 Michael Hill stores and 29 Emma & Roe stores in New Zealand, Australia, Canada and the United States. The company succeeded in building brand quality over its lifetime (Michael Hill, 2018). It expanded its operation in Australia since1987 and in 2016, the stakeholders voted for moving its primary listing in the stock exchange from the New Zealand stock exchange to the Australian securities exchange. In July 2017, the company employed about 2,820 permanent employees across its retail sales, administration and manufacturing roles. The company strategic goal is to grow the wealth of its shareholder over time by adopting the philosophy of controlled profitable growth (Michael Hill, 2017).
This report concerns with the impact of the technology development on the HRM. It analyses the major HRM roles of planning, job design and quality of work practices with an application on Michael Hill Diamond company. Important recommendations to the HRM at the company are discussed and justified.
The environmental factors
The organizational environment impact on human resource management is continuously developing. Kane and Palmer (1995), as cited in Genc (2014), argues that environmental factors have a significant impact on the overall human resource management (HRM) strategy. HRM plays several roles in the organization that makes it a strategic partner that aligns HR strategies with the business goals. Also, it develops the business processes and strengthens them through providing its services. In addition, it fulfills the individual and organizational demand in managing the change process (Cascio & Boudreau, 2014).
The factors that impact the organizations are internal and external factors; the external factors include, changes in the international economy, changes in technology, changes in the national economy, national culture and traditions, industry characteristics, legislation and regulations, actions of unions, actions of competitors, impact of professional organizations and HRM staff’s experiences in other organizations. The internal factors include organizational mission, strategy or objectives, actions of corporate headquarters, the size of the organization, structure of the organization, priorities of top management, changes in of power and politics and priorities of line managers. This report concerns with the changes in technology that represents an external environmental factor (Genc, 2014).
Changes in technology significantly and positively impact the business organizations. They affect the organizational substructure and influence the profits to increase, which is likely to increase the employees’ wages. Also, it facilitates the human resources functions of selection, recruitment, induction, training and performance appraisal. In addition, international practices and developments in HRM can be learned faster by organizations seeking global expansion. Although technology can negatively impact the HR policies if it replaced the labor that results in lower levels of employment and leads to dismissal of low skilled employees. Technology development could result in social cost represented in the retirement of workers, breaking their contracts causes anxiety and low-spirit. But it definitely increases the demand of talented employees, the matter that decreases the training costs, but the cost of hiring the qualified workers is high and might lead to higher spending. Also, the highly qualified employees are creative individuals who can well perform in flat organizational structures (Genc, 2014).
Changes in Technology
Michel Hill company vision is to expand its global footprint by opening additional one thousand stores. This vision is challenging for the company to achieve for its failure to identify the differences between its HR policies in Australia and New Zealand, Canada and the United States. There exist differences between the employment policies in each country. In addition, the company was not able to recruit the right local talents required to build a positive candidate experience that matches the local culture of each country. The HR initially relocated its senior staff from Australia and New Zealand to work in its stores in Canada. The matter that resulted in missing out the knowledge of the local market conditions and delayed success. Also, the lack of brand awareness in the American and Canadian markets resulted in a condition of business start-up rather than business expansion in new markets, the matter that complicated the attraction of new customers and local employees. Accordingly, the company was highly challenged in adopting the suitable country-specific human resources, practices of talents management and HR systems in globalizing its business. The HR of the company took the responsibility of outreaching other companies to gain their support and assistance. It aimed to learn from their experiences through partnerships with organizations to achieve success. The HR adopted the “try to learn” strategy, which depends on learning valuable lessons from their mistakes. The major lesson was to understand that what works in one region does not mean that it is going to work in the other region. Along with its learning process, Michael Hill realized the importance of technology in managing its global business operations that also involve managing multi-national talents, recruitment technology space and automating the business process required for its expansion plan (PageUp, 2016; Reddington, et al., 2011; Smith, Wenn, & McKinnon, 2014).
Planning represents a major HR role in organizations because people are the most valuable asset that requires to be well planned to enable organizations to achieve their long-term goals. They should be allocated among the departments according to the organizational needs. The HRD should prepare 3 to 5 year plan, including the number of employees, their educational level and skill levels to be able to fulfill the changing needs of the internal and external environment. Flexible and dynamic HR is required to ensure a timely response to the changes in demand and future expansion objectives (Hudson, 2015).
Michael Hill should follow the effective workforce strategy planning that could be done according to Sambartolo (2015) and Quam (2015), as follows:
- Demand: The company should select its demand pattern, whether static or dynamic and to predict the demand fluctuations to employ the skillful employees who can adapt to the changes in demand. In fulfilling its global expansion, Michael Hill should carefully study the market demand depending on technology tools in the countries of expansion and hire the employees accordingly.
- Utilization: The organization’s success in fitting the workforce in the right place to effectively respond to the demand reflects its capability of demand utilization. Michael Hill productivity is likely to increase due to the cost reduction and increased output volume. The automation of these factors in an information system facilitates the HRM activity of evaluating the utilization level of the employees.
- Improving employee performance: Selecting the highly skilled workers and monitoring their performance through an information system facilitates the process of monitoring the employee’s performance, including skills, capabilities, risk-taking, satisfaction level, certification and experience.
Hiring the qualified employees is a challenging activity to the HRM due to the limited number of the highly qualified employees in the job market. Being the most valuable asset in the organization, top management seeks to attract them to create competitive advantage. Technology acts as an enabler of aligning the strategy with the business strategy to ensure the effectiveness of collaboration and communication among the functional teams and help to steer the organization towards working to achieve the organizational goals (Eaglebarger, 2016). Accordingly, the HRD at Michael Hill should hire the qualified workers from the local markets it operates within to benefit from their local experience and effectively respond to the market needs.
The Challenges Faced by Michael Hill Diamond Company
The HRM at any organization is challenged by utilizing the innovative potential of the employees. Employees who possess the capital tacit knowledge about the business process and operations should be fully utilized. They directly represent a competitive advantage to the organization that requires to be mobilized through enabling innovation at workplace.
According to Bakker & Demerouti (2007), as cited in Hootegem, De Spiegelaere, & Gyes (2012), the Job Demands-Resources model (JDR) categorizes job characteristics into two main groups; job resources and job demands. The job resources are the work aspects that perform functional role in achieving the work desired goals that are likely to reduce the job demand and its associated costs represented in motivation and learning and development. The job demands are the aspects required to sustain the employees’ skills. They are related to the cost of health and employees motivation.
The approaches to job design reveal the existence of trade-offs between the mechanistic and the motivational job designs. The mechanistic job design is derived from the industrial engineering and directed towards simplification of processes and efficiency. Where the motivational job designs are derived from the organizational psychology and aim to increase the employee satisfaction.
Michael Hill is recommended to use the lean manufacturing job design because the lean system is mainly designed to enable quick adoption with the small variations in demand and it reduces the process variability. The company needs this type of job design to enhance the efficiency of its production system through designing a system where employees get a timely feedback on their performance, like the defect rate and product quality (Cullinane et al., 2012).
Also, the lean job design will enable the company to be more dynamic in responding to the environmental changes with variable rates, including the technology change. The HR professionals can design the employees’ jobs in the appropriate way to flexibly respond to strategic challenges (Sheehan, et al., 2016).
Adopting a culture of continuous learning, quality management and process re-engineering are linked with lean manufacturing. Also, feedback has a significant role in enhancing employee performance and work practices. It depends on visual management tools and statistical process control. For example the statistical process controls are fed by the behavior of continuous data processing that influences the product quality through short feedback loops to the process operator. Feedback is likely to enhance employee knowledge, self-efficacy and motivation (Curson & Skidmore, 2010; Cullinane et al., 2012).
The HRM has a major role in managing the quality of work practices through facilitating the process of continuous learning. It requires to be embedded in the organizational culture and leaders should adopt it by leading with an example. Using technology facilitates the organization learnability and enhances the feedback process (Deshler, 2016).
Michael Hill strategy recognizes the importance of building solid organizational capabilities to support its strategic growth plan. Accordingly, it builds a world-class team and focuses on the ongoing development of the working team across the company. Also, the company invests in technology to develop its systems and infrastructure in order to improve efficiencies and productivity. In addition, the company asses impairment of all of its assets regularly through the evaluation of the internal conditions in relation to its assets to eliminate the impairment. This process includes store, technology and economic environments, product and manufacturing performance and future product expectations (Michael Hill, 2017).
Recommendations for Michael Hill Diamond Company’s HR team
Utilizing the technology solution that was specifically tailored for Michael Hill international expansion empowered it and enabled its HRM to manage the recruiting activities by using a single software platform. The company could manage the different local employment conditions and workflows to manage its talent acquisition requirements in each market. The company could effectively manage its global team and work distribution. Utilizing technology solutions enabled the company to manage its global process while maintaining its ability to localize these processes when needed. Michael Hill could improve its needs from the local workforce and support their local regulatory policies, social and cultural needs. It also facilitated the HRM job by managing its global expansion without the need of increasing the number of recruiters. Moreover, the technological facilities enable the company to open its desired one thousand stores supported by the facility of online commerce (PageUp, 2016).
Michael Hill should strengthen its team engagement across various global markets by improving its tools and technology in order to create superior customer experiences that are likely to increase individual performance, income, productivity and engagement. Also, it should continue developing its omni-channel capabilities to improve the customer experiences and enhance the repeated business process. In addition, it has to attract local talents to help in accelerating its expansion strategy and the establishment of new products, including differentiated bridal and fashion brands. Adopting the lean manufacturing strategy will assist in implementation of the strategy of ongoing development and establishing the new branded bridal and fashion collections. It is likely to support the relevant stories that deliver incremental margin and drive the consumer preference (Michael Hill, 2017).
Michael Hill should fully depend on online recruitment, which is increasingly used in the recruitment process by other organizations. This could take place by utilizing the social network in addition to its website to attract the job applicants. It is important to provide accurate information about the job for organizational attraction. The social media pages should be utilized in sharing experiences and achievements with the outside community that help in brand expansion. Moreover, the social networks provide the recruiters at the company with all necessary information required about job candidates that facilitates the selection process. Technology embedded in the social networks enables in content analysis through the IT tools that relate different factors and shortlists the most fitting skills (Ladkin & Buhalis, 2016; Smith & Cantrell, 2011).
Conclusions
Changes in technology significantly and positively impact the business organizations. They affect the organizational substructure and influence the profits to increase, which is likely to increase the employees’ wages. Technology increases the demand of talented employees, the matter that decreases the training costs, but the cost of hiring the qualified workers is high and might lead to higher spending. The HRD should prepare 3 to 5 year plan, including the number of employees, their educational level and skill levels to be able to fulfill the changing needs of the internal and external environment.
Technology acts as an enabler of aligning the strategy with the business strategy to ensure the effectiveness of collaboration and communication among the functional teams and help to steer the organization towards working to achieve the organizational goals. Accordingly, the HRD at Michael Hill should hire the qualified workers from the local markets it operates within to benefit from their local experience and effectively respond to the market needs. Michael Hill is recommended to use the lean manufacturing job design because the lean system is mainly designed to enable quick adoption with the small variations in demand and it reduces the process variability.
The HRM has a major role in managing the quality of work practices through facilitating the process of continuous learning. It requires to be embedded in the organizational culture and leaders should adopt it by leading with an example. Michael Hill strategy recognizes the importance of building solid organizational capabilities to support its strategic growth plan. Accordingly, it builds a world-class team and focuses on the ongoing development of the working team across the company.
References
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