Making RI's human resources ready for globalization
By Budi Hanoto
JAKARTA (JP): The Jakarta Post on Sept. 14, 1998 carried an article entitled "Competition causes angst among employees".
The article explained how companies the world over are responding to the challenge of globalization by finding smarter ways to exploit employees.
According to the article, there is a correlation between job stress or employee stress and tight global competitiveness in the workplace.
In practice, companies tend to exploit their employees to fulfill organizational goals in response to the rapid changes of the globalization era.
It is recognized that this phenomena -- pushing employees to achieve organizational objectives to increase global competitiveness -- finally makes many employees unhappy, less productive and sick.
The article quoted Rob Moodie, the chief executive of VicHealth, who is responsible for the wellbeing of workers in the state of Victoria, Australia. He said that according to a survey in Australia, nine out of 10 workers were stressed, and 85 percent admitted that stress was a problem in the workplace. The results of the survey were very surprising.
Why is this happening amidst the wave of globalization and enduring change? Why are many employees stressed, less productive and unmotivated? Why do they have more conflict in their lives, and low rates of performance?
All of these questions are strongly connected to how companies implement strategic human resources management and to what extent the role of human resources in companies responds to the changing environment in the workplace.
It is understood that it is not easy to implement the entire Strategic Human Resources Model, which has a number of key dimensions.
This model requires human resources management (HRM) to be integrated with "corporate strategic issues". This integration has implications for the "involvement" of different parties in shaping the framework in which HRM policies are developed (Kramar, 1994).
Generic human resources itself traditionally encompasses activities such as organizational design and development structures, recruitment and selection, compensation and benefits, training and development, assessment and promotion, occupational health and safety, and communication.
However, much has changed in the last two decades of globalization. The larger companies in many segment industries have already established a presence in the global market. They have implemented their strategies to gain a market share by building networks, creating information technology, investing in research and launching an aggressive marketing strategy in order to increase their sales volume and win business in a competitive market.
This indicates that in terms of products and companies (including employees) involved, the rivalry in the global segmentation of such industries is intense, as the number of competitors is relatively equal in size and capability. With competitors in such segments of industry (for example, banking, automotive, insurance, etc), companies tend to strengthen rivalry within the industry.
The intensity of competition within an industry may then create unexpected employee behavior, such as stress and unhappiness which may result in poor performance. Companies are inevitably faced with a lack of productive, loyal, committed, and dedicated employees. This situation occurs due to the following issues:
* Differences in the interests of companies and employees.
There is a contradiction in the interests of company's and employees. A company usually has long-term goals such as profit and growth, cost reduction and improving market share, meanwhile individual employees tend to have short-term goals to meet their needs such as wages, working conditions, fair treatment and facility, and promotion. This problem requires solutions such as offering non-monetary rewards to employees and creating clear job descriptions and career paths. The imbalance in these interests leads to stress and a decrease in the performance of the employee.
* Expectation, contradiction, and problematic corporate roles of personnel
There are many other reasons that companies may not have productive, loyal, committed, and dedicated employees. The following four reasons are considered triggering factors to this phenomena. The managers' expectations may be too high, the staff's concept of professionalism may contradict the manager's own vision, problematic corporate roles of personnel may exist, and managers may hold assumptions which undermine efforts to motivate employees.
* Equal Employment Opportunity
This is also concerned with staff appreciation. Implementing competency, rotations, and a balance of tasks, therefore, become important issues to ensure equal employment opportunity. This point reflects that in building the needs of employees, in conjunction with working conditions and opportunities for them, companies have to divide tasks according to the needs, different skills and attitudes of the employees. This placement division, of course, is based on the strategy of organization. Therefore, in some divisions, employees become cost effective and other divisions have adaptive employees. More importantly, the concept of competency must be properly executed.
Stress, lack of productivity, and poor performance can be triggered by the low priority given to individual psychology, leadership, power and social interaction, collaboration, and interpersonal relationships between employees and managers. Individual (employee) behavior might be formed by the employee's attitude to their job and attitude to the company. If this attitude can be improved, it should result in employee retention and increase productivity. The question is then, how to develop positive employee behavior by changing the attitude of employees?
Lack of appropriate rewards also lead to stress and a lack of dedicated and loyal employees. Rewards can be divided into two categories, extrinsic and intrinsic rewards. If the employees believe that their efforts are not rewarded, they, in turn, demonstrate undesirable behavior and a lack of motivation. Conversely, when the rewards system is well executed, employees tend to show an increase in morale and productivity.
Human resources in businesses of the future will need to demonstrate not only the ability to deal with the "domestic" market but also the global market, amidst these and other forces. Companies will have multiple stakeholders both in the internal and external environment such as employees, competitors, suppliers, foreign governments, customers, investors, financial institutions etc. To exist and compete in the future, new roles need to be adopted by human resources for dealing with the global economy and competitive forces and creating a sound workplace.
Borrowing the terms from Dave Ulrich in his article New Mandate for Human Resources (Harvard Business Review, January - February 1998) new human resources (HR) should not be defined by what they do but by what they deliver -- results that enrich the organization's value to customers, investors, and employees. It means that human resources should be involved in strategy execution. By doing this, employee morale (also management morale) will increase due to appreciation of the work involved.
Further, new HR should be held accountable for ensuring that employees are engaged and committed to the organization and contribute fully. HR must 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, offer employees opportunities for personal and professional growth, and provide resources that help employees meet the demands put on them.
In this case, HR's involvement in the decision making process clearly represents employees' views and supports their rights. This role will minimize problems of individual psychology such as stress, lack of confidence, lack of motivation etc., creating a better environment in the workplace.
To achieve employee satisfaction and company goals, competency should be properly executed, particularly by managers. There are at least three competencies that lead to managerial success in this case i.e.: (1) Personal impact: The ability to create a good impression and instill confidence in the eyes of others, (2) Resistance to stress: the ability to maintain work performance even under stressful conditions, and (3) Tolerance for uncertainty: The ability to maintain work performance in unstructured and uncertain situations. These competencies are at the very least expected to maintain a conducive atmosphere in the workplace.
The work environment should be as conducive as possible enabling employees and managers to develop creativity and innovation in order to meet organizational goals.
A compelling place to work program should be implemented to air employee attitudes about the job and about the company. On one hand, employees should: feel a sense of accomplishment, feel proud working at the company, understand the company's business strategy and feel good about the future of the company and others.
On the other hand, the company should create the physical working conditions that influence overall attitudes to the job and enable it to compete effectively (fair treatment, etc). This program is intended to create desired employee behavior.
By implementing the new roles of HR, at least, the problems encountered by the individual can be minimized, and the company's ability to compete in global business can increase.
The writer is a researcher in the Foreign Exchange Reserve Management Division of Bank Indonesia, Jakarta.