The major challenges of profitability and increased competition have made the

HRM function more important to business success than ever before. Discuss.

Respond your finding with examples.

Introduction

Human resource management is more important in a changing environment than before.

There are some challenges and changes, which have great impacts on organizations

respective to human resource (HR) function behaviors. These impacts know as

globalization, increasing customer’s expectations, transparent market, and human

resource management (HRM) provides possibilities to make organizations more healthy

and competitive. Where the firm may focus on cost for employee compensation and make

conclusions on share services or outsourcings.

We can say that, the function of HR units offers and increases some potential of

organizations structure and some of human capital, globalizations, increasing information

technology, enhanced customer expectations and the transparency of global markets that

know as a main shift in a developing world.

Content

To be more profitability in the challenging economy with a large competitors, TIMATCH

SDN BHD have globalize their business where they explain that “Globalization is the

terms used to describe the increased pace of economic and cultural interconnectedness

between different countries.” TIMATCH SDN BHD had increasing the competition

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depends on the developments of consumer expectations. Consumers await more

performance and their needs are more difficult to handle. Moreover, consumer has more

access to information and is more informed than ever before. The result of this changing

knowledge is the customers anticipation has become stronger than ever before, where the

market participants increased the competition because better product and services for

more favorable conditions are offered. They know that HR can influence customers’

satisfaction and the performance of the company, where the HR activities as pay,

communication, ensuring fair work conditions and others related activities, those

activities have impact on the work behavior of an employee, and the employee conditions

will influence the production and service process.

A main reason of new transparent market is the information technology. Computer and

mainly the internet are the fastest growing technologies in he present and one advantage

through the internet for customer is that they can compare various feature of product

easier and faster. In a transparent market consumers know that they can usually receive

lower cost and higher quality goods and services.

TIMATCH SDN BHD knows that to be more profitability, they reduce costs and increase

potentials to be profitable and to exist in a fast changing market structure. The functions

of HRM may contribute to a ‘healthy’ company development and one component to be

profitable is to analyze cost structure and their cost drivers. HRM cost have to be

measured, for instance almost 70 per cent of companies’ expenses can be spent on

employment issues. Where the cost for recruitments, induction, training, compensation

and benefits should be evaluated and compared to alternatives like shared services and

outsourcing strategies. If cost is too high, a firm has to think about outsourcing the human

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resource function. In that case shared service models help to minimize cost by cutting the

costs for bureau accommodations in the organizations.

By using the HRM function in staffing area, the issues of workers selection and

continuous skill development, work design, equipment maintenance, process

improvement, quality control and process reconfiguration are integral to the

competitiveness of the water and steel industry. Increasing globalization of this mature

industry will heighten competition between regions and countries for new, essentially

mini-mill, installations and jobs. If high-paying jobs in steel are to be retained, and new

jobs created, enterprises will need a workforce that is flexible and more competitive in

terms of quality and quantity.

The integration of HR issues into business plans has not been widespread and the sharing

of information with workers is a relatively recent phenomenon in the steel industry in a

number of countries. Similarly, the incidence of consultation and cooperation on

technical change has been insufficient in the eyes of some trade unions. In countries

where the unions have been strong and where the HR function has had little strategic

importance in decision-making it has proved difficult suddenly to introduce radical

workplace change without workers being extremely sceptical of "management

gimmicks". It is not until management demonstrates a genuine desire to involve workers

and unions in decision-making that progress has been smoother and quicker, particularly

when coupled with workers' enthusiasm for new work practices that promised potential

for greater autonomy and career advancement. But the unions' response to work

reorganization was often slow, at least initially. It was not a key issue for them until

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employers began aggressively to pursue it, specifically employee involvement, job

reclassification and consolidation, job rotation and teamwork.

Many enterprises are developing new HRM policies that are an integral part of business

strategy and long-term planning. Changes in technology, modernization and

rationalization of manpower mean that each employee is responsible for a wider range of

more complex equipment. This makes it vital to recruit people with relevant knowledge,

skills, attitude and potential. These are the ones who can benefit from appropriate

training.

Rather than hiring according to narrow job specifications, employees who fit the strategy

and culture of the organization, or have the potential to do so, are being selected. At the

same time, performance-planning and appraisal systems, incentive schemes and training

and career development programmes are being linked, with increased employee

participation and more cooperative labour-management relations, so that the

organizational changes required for a competitive industry can be achieved.

In the highly capital-intensive and increasingly automated steel industry, the need for

continued emphasis on human resource development is becoming as important as any

other aspect of running a steel plant. Changes in the job requirements of production and

maintenance workers, coupled with the introduction of new technologies and a greater

emphasis on quality assurance and particularly in the light of the spread of ISO quality

standards, have necessitated much greater emphasis on training, including more formal

training of production workers. In the future, additional computerization of production

processes and control will lead to increased demand for computer and numeric skills

among those recruited to and promoted within the steel industry. Steelworkers in turn will

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be more highly trained than hitherto, and be more likely to operate in multi-functional

teams, performing a wider range of tasks and carrying greater responsibility for quality

assurance.

Attitudinal change, the optimal use of existing human resources by redeployment and

multi-skill training, preparing employees for modernization projects, enhancing

efficiency, safety and pollution control and quality improvement are the major targets of

training. A variety of skills and aptitudes will have to be imparted and absorbed if the

objectives of training are to be achieved. This variety reflects a combination of technical

and systemic elements which point to a change in the function of the operator from the

mere carrying out of set tasks towards having the capacity to master a work process in

which the worker has to carry out simultaneous and alternate activities combining routine

tasks, the assimilation and evaluation of information and unexpected tasks. To do this the

worker will have to use this series of skills and aptitudes in a systematic way, having

fully assimilated them.

The criteria for fulfilling training objectives should not be the amount of training

provided, rather they should reflect growth in steel output and labour productivity. But,

without evaluation and follow-up, it is not easy to find out whether and to what extent the

additional investment of time and other resources had led to new skills or increased

performance.

New investment, sometimes in conjunction with new ownership, has been the engine of

change in many steel plants. Also important are a set of related changes in quality, work

organization and skill. Six integrated developments are relevant here: devolution to single

business units with related changes in management status and function; total quality

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control; new technology; the move from seniority to competence-based job structures;

broader but more specific job classifications and descriptions; and related skill formation

activities. The significance of these developments is only apparent in the context of steel

industry traditions of hierarchical management, production driven systems, low

automation, seniority-based job structures, narrow skills and skill acquisition through

experience. These were the hallmarks of steelworks for generations. Although some

changes to managers' and steelworkers' jobs started nearly 20 years ago, many did not

occur until much later. The late starters have required large step changes in work

organization rather than taking an evolutionary path.

Changing work practices are the latest in a series of initiatives to increase productivity

through work reorganization. Multi-skilling and teamworking have had the greatest

effects. After a lifetime of rigid occupational structures based on semi-skilled production

workers and skilled maintenance workers, the steel industry has done away with many

single-skilled occupations, such as welders, boilermakers and bricklayers. Skills made

redundant by computerization are being replaced by a need for computer and diagnostic

skills. Greater functional flexibility has been the death of demarcation and skilled

workers are now multi-skilled.

With the arrival of microelectronic technology, work processes began to change, shaking

the foundations of traditional work organization. Historically, on-the job-training had

been central to most core production processes in the iron and steel industry. Senior

foremen who controlled workforces of several hundred workers, had moved through the

traditional hierarchy of classifications which would have been recognizable to a

nineteenth century steelworker. The non-trades hierarchy was mirrored by that of the

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skilled trades, each with its own set of traditional practices and benefits as workers

moved up the ladder. New technology, with its requirement for precision, overturned

these traditions. For example, where the temperature of steel or the amount of alloys to be

added had previously been gauged by rule of thumb, computer technology offers greater

precision but demands different skills. The owners of these new skills are both

technically educated and trained on the job. The internal labour market based on seniority

and on-the-job skill acquisition gave way to job structures based on competence. Fewer

promotion possibilities with a shrinking of classifications and grades means that progress

must be marked in another way, such as through obtaining higher levels of skill and

acquiring more autonomy.

Rapid technological change means that experience is no longer the best criterion for

selecting workplace supervisors where training, qualifications and adaptability are often

more relevant. Having already made large cuts in the workforce it is necessary for

management to look harder for further rationalization. Making fuller use of a worker's

time and having groups of workers become more self-supervised and take more

responsibility (e.g. for quality inspection) has led to further savings in employment. An

added benefit of having workers more responsible for the quality of their production is

the savings arising from not having to re-work material that failed to meet quality

standards.

Accompanying the focus on customer relations and service is substantial investment to

deliver higher quality output. New technology has not only improved quality, it has also

eliminated many dirty and arduous tasks, reorganized the way work is done, reduced the

number of operators needed and changed the nature of the workforce. An increasing

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proportion of workers became responsible for operating costly equipment at the same

time the market demanded improved quality. As facilities and equipment becomes more

advanced, production becomes more dependent on their condition. Consequently, work

teams must be well-versed in process logic, diagnosis and mechanics. The maintenance

function of work teams can be critical to their successful operation of complex processes.

Along with team work, job rotation, greater employee involvement and responsibility,

employment security and broader jobs, work reorganization needs to include good job

design and extensive training and retraining opportunities. Workers are seeking more

authority, not just extra responsibility; opportunities to learn more skills, not just to

perform additional tasks; and more mobility in the workplace, rather than just being

moved around.

That new work organization has been widely and successfully implemented at many steel

plants is often a tribute to the extent of labour-management cooperation from the start of

the process.

The human dimension is the key to the future. Technical advances are short-lived and

new procedures are developed at an increasing rate. Managerial demands for higher

quality, commitment and flexibility are often being pursued against a background of job

insecurity in the industry. Successful steelmaking in the 21st century will depend more

than ever on an enduring but responsive and flexible partnership between the enterprise

and its workforce. The loyalty of the workforce to the goals of the enterprise and the

competence and determination they show in achieving them must be matched by a

commitment from the enterprise to increase the skills, responsibility, authority, job-

satisfaction and job security of the workforce. In the long term, management may be best

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able to secure increased commitment and flexibility by linking its demands to guarantees,

such as no compulsory redundancies within a given period. The introduction of such

exchanges could extend the degree of labour-management reciprocity.

Conclusions

As had been show by the TIMATCH SDN BHD using the HRM function to cope with the

challenges in being more profitable and increased competition, its show that the HRM

function are more important to them, where they using the HRM function to archive and

drive them to their goals by planning, organized, staffing, leading and controlling.

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Reference:

1. Gary Dessler, International Edition, Human Resource Management, tenth edition.

2. Stephen P. Robbins, Mary Coulter.8thedition, Management, Person Education

International. Chapter 1, Pp 9-13

3. Robert A. Pitts, David Lei. 4th edition, Strategic Management, Thomson Higher

Education.

4. TIMATCH WATER MANAGEMENT,(online), available:

http://www.timatch.com

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