The following paper talks about the Human Resources Department which is the essential element of every

organization. It also talks about the various challenges that are being faced by Human Resource Management
in order to provide an insight about the growing challenges in the industry including both internal and external
challenges with proper examples of organizations such as Standard Chartered Bank, Unilever and McDonald.
The report also makes an effort to make recommendations for the challenges in order to increase productivity
and achieve growth by unimaginable heights. Factors such as technology, globalization, organizational
structure, managing workforce by virtue of diversity, incentive pay and performance management are
continuously leading towards challenges as mentioned above. Furthermore, unionism is yet another challenge
which has already been a point of major concern for managers throughout the world. These entities tend to
assume power and decrease the actual participation of the management. Hence, the roles of HR managers are
changing and so are the external factors which are giving birth to the above mentioned elements.
Introduction
Human resources department is mainly concerned with the management of the company whereby policies and
other elements that contribute to this act are considered in the field. In particular the term Human Resources
itself is very explanatory and reveals the fact that it is concerned with the human capital that is of highest
concern in every organization. Employee development and other such features are of main concern to the
Human Resources department.
Like every other department of the company, this sector is also related to the overall strategies of a company
and it thus acts to create a super program whereby it can use its current resources to develop a strategy which
further strengthens the companys true goals and objectives.
There are a certain challenges associated with it which develop with the passage of time. These include both
global and central challenges that are to be addressed to in order to achieve the perfect framework. In the
modern era, the world is shifting towards a central entity and the Human Resources department acts as the
managing hand in this regard. Thus, it is of intrinsic value and despite the presence of numerous challenges
that are to be addressed, the department has lived up to its expectations in creating a managing hand whereby
everyone is judged and led by the hand of authority. There are various factors such as technology and other
such areas which influence Human Resources practices worldwide.
Global Challenges for HRM
Many studies and philosophies, ideologies and methodologies, diagrams and matrices have been established
in order to support human resource management. Everyone has a different perspective of an organization;
some consider it as a family while others make an attempt to maintain professionalism in decision making.
The various factors, decision making patterns, various methodologies are being implemented on a daily basis.
This is due to the fact that a widened sense of employee management has been established over the past years
whereby the managers are not related to old fashioned tactics in problem solving. Thus, in order to achieve
the goal of attaining maximum utility, human resource management is subject to various challenges. These
include both internal and external challenges in which the organization faces challenges from within itself and
from its surrounding respectively.
The major two types of challenges that are being faced by Human Resource Management include:

Fluctuating role of the manager

The developing environment

Fluctuating role of the manager

In the modern era, the manager is entitled to more roles than the ones that are made available to him in his job
description. Thus, he has to play various roles, at first he has to become a part of the company and develop its
employees and then he has to manage the diversity that persists in the organization. The following aspects can
be considered while keeping this changing role in mind:
Flatter Organization
A flatter organization serves as an organizational setting where the number of layers between the staff
members and higher management is reduced to great extent. Such a setting results in a higher productive
strategy due to various reasons, firstly, due to the presence of a thin layer between the management standards,
the lower level employees are able to efficiently coordinate with the higher management and convey their
messages. This is essential as the lower staff or workforce is mainly in line with the actual customers and
implements the created strategies. Thus, there is a global challenge of attaining such an organizational
structure.
Example
Standard Chartered Bank which is quite well-known for its international standing and its financial records
implements and supports flat organizational structure. This is evident from the fact that all managers are
provided with a vast communication network whereby they can easily interact with the different levels of
management. Furthermore, decision making authority has also been provided to all levels of management.
Employee Empowerment
Empowerment of employees is yet another challenge that is being faced by HRM. In some sectors people
consider that employee empowerment refers to a situation whereby the management loses its actual control
and is entitled to perform as per the standards of the employees. However this statement is incorrect, it is still
considered to be true by many. Adams Six-sigma is one method of achieving employee empowerment under
which employees are trained and are given a more professional outlook. The official website of Adams sixsigma in its newsletter named Employee Empowerment will increase with six-sigma suggests that employee
empowerment refers to a situation in which there is complete accountability and management of ideas and
individuals. Six-sigma, through its six approaches of creating a better workforce empowers employees to take
charge of certain situations (Adams Associates).
Example
One such example of employee empowerment can be observed in McDonalds where the staff members have
the authority to take back an order and provide amendments as per requirements made by the customer. This
step has been one of the major reasons why the company has faced such huge revenues and extravagant
business in various sectors of the world where it operates.
Team Work
Everyone one has to work as a team in order to achieve the true objectives. The different sectors of the
company make an effort of completing tasks by creating small teams so that tasks could be delegated
efficiently. Furthermore, everyone has to work together as a single unit in order to achieve the strategic
implications of the decisions made by the higher executives.

A team is thus an essential part of the company and a major concern for HRM as more teams are being created
on a daily basis to overcome various tasks.
Example
In an organization, various teams are created for various projects that are led by managers which help in
coordinating and completing tasks. Thus, HRM seeks to find methods with which it can increase work
efficiency in teams.
Ethical Management
Ethics is another major point of concern for HRM as it is responsible for making sure that all elements are
kept in order. Though there are various approaches towards ethical management by the virtue of various
theories such as utilitarianism which focuses on maximum benefits for the maximum number of people. The
human resources department has to thus make sure that the promised ideas are being delivered with efficiency
and effectiveness. Furthermore, it has to also take into account the various factors that are to be included in
ethical management such as unethical behavior of individuals and the firm alike.
Example
Many companies have faced lawsuits due to cases such as discrimination and harassment in the office setting.
All such issues and other related factors are dealt by HRM in order to make sure that such practices never
occur in the organization. Thus, HRM tends to make an attempt towards keeping an ethical outlook of the
company.
Changing Environment
There is a constant and persistent change in the environment in which managers operate. There is a constant
need to adhere to such challenges that are given birth due to this changing environment (Scribd). These are as
follows:
Globalization
International unity and globalization has given birth to various challenges as now the managers have to act as
global leaders to adhere to the changing requirements. Managers now have to become more flexible as they
are expanding over boundaries worldwide.
Example
Vodafone for example has been deeply associated with globalization and thus catering to the needs of various
sectors including Europe, Africa, South-Asia and even India. Thus, the globalization impact has seriously
affected the actual potential of business worldwide.
Technological Impact
Every field is associated with the technological change in the world and thus, the Human Resources sector is
also affected by technological changes in the world. It sometimes hinders and sometimes creates a better
managed human resources sector whereby it completely serves its purpose with great efficiency and
effectiveness. Joanne Christie in the article named HR in the future: The impact of technology talks about
the impact of technology in the human resources department. The author persists that due to the increasing

trend in technology in the recent scenario the term Human in human resources seems to be alienated from
its true purpose as the human element is being decreased with the passage of time. Furthermore, the author
also persists that the human resources department can indulge itself in the trend of increasing awareness of
social networking websites and can utilize this feature to interact with more individuals so as to ensure a
widened sense of choices before recruitment and for the transfer of information. Moreover, many softwares
have been established recently which eases the job of the individuals associated with the department itself.
These softwares make an effort to utilize the given resources and provide the ultimate solution with decreased
human consideration and interaction thereby saving precious time and making the perfect choice by the virtue
of its artificial intelligence (Christie, 2009). To exemplify the above mentioned factor consider a company
which utilizes Linked In, a professional networking website for engagement purposes. If it chooses individuals
from these sources where all information is already available regarding the potential employee, the manager
would have saved precious time by not dwelling upon unmatched individuals for the position available. Thus,
it helps in recruiting of employees.
Hence, it can be said that there has been a major shift in the technological factor in the global arena which has
gained popularity among the HR co-coordinators as it makes an attempt to reduce their own workload by
relying more on artificial intelligence. Thus, some people consider this a blessing while others think of it as a
tool which destroys the original essence of the department and deteriorates the actual purpose for which the
sector was given birth.
Managing Workforce
Managing workforce is the most essential item to be considered by the HR department as this is the sole reason
why it came into existence. The following sections further provide an insight towards managing workforce:
Recruiting
Recruiting of employees is the most essential job of the HR department whereby it has to make sure that it is
taking in the best available resources that are provided. In the current scenario, there is a huge amount of
potential workers who are willing to attach to a particular company. Thus, a challenge of recruiting the best
individuals for the job has emerged for managers.
Example
A common example would be Unilevers intake of fresh graduates under its Management Trainee program.
The international marketing giant recruits only the best individuals under this program by the virtue of various
tests and other features.
Selection
After initiating the recruiting process, the companys HR department has to make sure that the selection is
made fair and on the basis of merit itself. Thus, unethical practices are avoided in this framework.
Example
In the above example of Unilever, selection is made by virtue of multiple tests and interviews so that only the
best available force is taken to become the asset for the company.

Managing Workforce Diversity: People belonging to different demographics have joined in the global
venture and are being recruited by various companies. This results in workforce diversity. An anonymous
writer on managementstudyguide.com in the article named Managing Workforce diversity talks about the
issues in managing such diversity. The author suggests that it is an important phenomenon as an unmanaged
diversified workforce would ultimately decrease the productive capacity of the company. Thus, issues such as
managing different ethnic groups, genders and locals are to be properly addressed by managers in order to
attain the complete picture and to achieve the goals of the organization efficiently and effectively.
Example
Standard Chartered Bank operates in various regions and thus it has to adhere to the various people that create
the workforce of the company. For this purpose, it has to manage such a diversified workforce and is doing
so currently. This is one of the reasons why it has reached unimaginable heights. People from Malaysia,
Pakistan, India, Bangladesh, UK and other sectors are involved in the process of creating a standardized
workforce which has been diversified in almost every way. Thus, it helps to increase productivity and is
currently the major issue to be addressed by the international spectrum.
Performance Management: Performance management is another critical challenge being observed. The
various companies are looking towards managing their employees via their performance. For this purpose,
many have even set performance standards as per which one has to provide ultimate result.
Example
Standard Chartered Bank offers a half yearly and a year-end evaluation standard scale on which the employees
are measured in between 1 to 3. 1 refers to an innovative individual who is providing the company with his
best efforts while 3 refers to an employee who is a bit backward in this regard. On the basis of this evaluation,
many different bonuses and rewards are given to the individuals. Hence, by the virtue of such standards, they
are managing performance.
Reward System
Nicholas Bloom and John Van Reenen in their paper named Human Resource Management and Productivity
make an attempt to explain various HRM practices. The authors talk about the incentive pay system under
which it is considered that people tend to work efficiently under an incentive pay system. This again comes
under a proper reward system as per the companys policies. It is an undeniable fact that people operate better
under a reward system.
Example
The sales department of various companies work on the principle of incentive system as the workforce is
motivated by the pay and the additional benefits that they will be entitled to after the completion of the job or
the task at hand. Thus, it serves as a tool towards increasing productivity by unimaginable heights.

Change Management: Mary Ann in her article named The challenge of change talks about the fact that
change is usually referred to as a situation where an unwanted or unexpected changes come in front of
individuals. These changes are challenges that are to be addressed properly if one seeks to increase

productivity by a great amount. The HR department makes an effort to resolve this issue by not allowing
change to gain popularity or a firm standing.
Example
Changes are a part of every organization for example a change in trends such as formality of clothing in an
office environment. The main solution to solve this challenge is to stop the change when it starts appearing
and doesnt gain popularity. The management has to address such challenges efficiently in order to ensure
enhanced productivity.
Unions: Unionism is yet another challenge that has always been of great importance for the management as
they control the basic labor workforce. A manager has to thus strike the balance by creating a scenario whereby
unions are given consideration, yet they should not be empowered so much so that they utterly take control.
Example
Problems of unionism lead towards reduced work morale as people tend to get scared of such forces. For
example, in countries like Pakistan, these unions used to control the banking sector back in 1970s which thus
created a chaotic situation for all employees and the actual workforce deteriorated with the passage of time.
Conclusion
Hence in a nut-shell, it can be stated that the HR department is facing a lot of increasing number of challenges
that are gaining international popularity in the modern era. These include factors such as technology,
globalization, organizational structure, managing workforce by virtue of diversity, incentive pay and
performance management. Furthermore, unionism has also gained popularity as it is a source powerful enough
to damage the actual framework of the organization. Hence, the roles of HR managers are changing and so
are the external factors which are giving birth to the above mentioned elements. Thus, it can be concluded that
these challenges are increasing tremendously and are to be addressed in order to become successful.
Recommendations: As mentioned above, there are many challenges that are to be addressed by the
management. These challenges have created problems for various firms and organizations both locally and on
a global platform. In some cases, the damages are unrecoverable and have led serious hardships. Hence, the
following recommendations can be made in this regard:

Ensuring effective teamwork by promoting teamwork.

Management of diversified workforce by providing each with equal chances to excel.
Addressing inevitable globalization by respecting the cultural and other values of others.
Incentive pay system should be strengthened as it is the best alternative for increasing motivation and
thus productivity.
Ethical element should be given proper consideration and all values are to be kept in line with the legal
obligations of the management and the company.
Unions should be regarded but not given complete authority as this would result in a chaotic situation.
Employees should be empowered timely to take decisions on its own so that it can efficiently create a
superior work environment.
A flatter organizational structure should be encouraged as in this way people would tend to be more
productive.