ACKNOWLEDGEMENT

The Assignment work on Emerging Trend in Human Resource Management has been given to me as part of the curriculum in 2- Years Degree in business administration . I have tried my best to present this information as clearly as possible using basic terms. I have completed this study under the able guidance and supervision of Dr Sujata P Dash. I will be failed in my duty if I do not acknowledge the esteemed scholarly, guidance, assistance and knowledge that I have received from her, towards fruitful and timely completion of this work.

MOHD SHAKEEL KHAN

INTRODUCTION
Human resource management, if we see it from definition perspective it is a process of bringing people and organizations together so that the goals of each others are met. If we see in practical situation the above definition its just one side of a coin which has limited HRM involvement but HRM today is a different story, it have changed the way we work, and also it helps an organization to survive in recessionary period. Managing and attracting the human resource in todays time is very difficult task. The role of HR manager has changed a lot (Dancing differently on changing tunes of life) from being protector and screener to the role of Savior who acts as planner and change agent affecting bottom of the pyramid where it is blue collar workers & at the Top & Middle level executives. The trends in human resource industry are dynamic in nature which contributes towards to achievement of organization goals. Over the years, highly skilled and knowledge based jobs have increased while low skilled jobs are decreasing. This calls for skill mapping through proper HRM initiatives. Change is inevitable as said and thats what Indian organizations are witnessing in management cultures, systems and working style. Alignment with global companies has forced Indian organization accept and incorporate change in every day life which makes role of HRM all the more important. Human Resource Management has evolved considerably over the past century, and experienced a major transformation in form and function primarily within the past two decades. Driven by a number of significant internal and external environmental forces, HRM has progressed from a largely maintenance function, with little if any bottom line impact, to what many scholars and practitioners today regard as the source of sustained competitive advantage for organizations operating in a global economy.

CHANGES IN HRM
Some of the significant changes that are likely to take place in the human resource management are as follows:

1. Increase in education levels: Due to technological progress and the spread of educational
institutions workers will increasingly become aware of their higher level needs, managers will have to evolve appropriate policies and techniques to motivate the knowledge of workers. Better educated and organized workforce will demand greater discretion and autonomy at the work place.

2. Technological developments: This will require retraining and mid-career training of both 3.
workers and managers. Rise of the international corporation is proving new challenges for personnel function. Changing composition of work force: In future, women and minority groups, SCs and STs would become an important source of man power in future on account of easy access to better educational and employment opportunities. Therefore manpower planning of every organization will have to take into consideration the potential availability of talent in these groups. Changing mix of the workforce will lead to new values in organizations.

4. Increasing government role: In India, personnel management has become very legalized.
In future private organizations will have to co-ordinate their labour welfare programmes with those of the government private sector will be required increasingly to support government efforts for improving public health, education training and development and infrastructure.

5. Occupational health and safety: Due to legislative presence and trade union movement,
personnel management will have to be more healthy and safety conscious in future.

6. Organizational development: In future, change will have to be initiated and managed to

improve organizational effectiveness. Top management will become more actively involved in the development of human resources.

7. New work ethic: Greater forces will be on project and team forms of organization. As
changing work ethic requires increasing emphasis on individual. Jobs will have to redesigned to provide challenge.

8. Development planning: Personnel management will be involved increasingly in

organizational planning, structure, composition etc. Greater cost-consciousness and profitorientations will be required on the part of the personnel department.

9. Better appraisal and reward systems: organizations will be required to share gains of
higher periodicity with workers more objective and result oriented systems of performance, appraisal and performance linked compensation will have to be developed

NEW TRENDS OF HR (A) International Human Resource Management (IHRM)

1. Ethnocentric approach 2. Polycentric approach 3. Geocentric approach.

(B) Human Resource Outsourcing: It consists of three types

1. Application Service Provider 2. Business Process Outsourcing 3. Total HR Outsourcing

(C) Human Resource Information System (HRIS) has three types

1. Strategic HRIS 2. Transformational HRIS 3. Tactical HRIS

(D) Use of SIX SIGMA in HR

THE ROLE OF HR IN ORGANIZATIONS

Boosting Productivity Preparing the Organization for Change Building Employee Commitment and Morale Involvement in Determining and Implementing the Strategic Direction of the Organization

FUTURE ROLE OF PERSONNEL MANAGERS

Some of the emerging trends in the role of personnel manager are as follows:(i) Personnel managers of future will have to stress upon overall development of human resources in all respects. (ii) The scope of human resource management will be extended to cover career planning and development, organization development, social justice etc. (iii) Enlightened trade unions will become an active participant in the organization and management of industry. (iv) The personnel manager will be required to act as a change agent through greater involvement in environment and scanning and development planning. They will have to devote more time to promote changes than to maintain the status quo.

(v) The personnel function will become more cost-conscious and profit oriented. Instead of merely administering personnel activities, the personnel department will have to search out opportunities for profit improvement and growth. (vi) Greater authority and responsibilities will be delegated to personnel managers particularly in the field of employee welfare services. (vii) Personnel managers will have to continuously retrain themselves to avoid obsolescence of their knowledge and skills. Thus, the job of personnel managers will become more difficult and challenging in future. They will have to be experts in behavioral sciences. They will play a creative and development role. They will thus have play a creative and development role. They will have to acquire new skills, values, attitudes to discharge their new responsibilities successfully.

HR IN THE 21ST CENTURY

Becoming the employer of choice Winning the war for talent Contributing to the organization as a strategic business partner Cultivating leadership through e-learning and development Recognizing the workforce as a profit center Thinking globally while complying locally Incorporating flexibility and adaptability into the organization Embracing technology as the underlying facilitator The policies of many companies have become people centric Attracting and retaining of human resource has become difficult as loyalty factor is losing its shine. Human Resource Outsourcing is the new name in the industry to replace the redundant traditional HR department. With the increase of global job mobility, recruiting competent people is also Increasingly becoming difficult, especially in India.

COMPETENCIES FOR 21ST CENTURY HR PROFESSIONALS

Developing Effective Reward and Recognition Systems Creating and Becoming Transformational Leaders Engaging the Workforce in Continuous Change and Innovation Collaborating in Resolving of Strategic Problems Partnering with Community Groups and Business Organizations

Encouraging Real Employee Involvement Coaching and Counseling Individuals and High Performance Teams Empowering and Facilitating Learning, Change, and Decision-making Creating the "Learning" Organization Designing Organizations, Processes, and Performance Systems Keeping Up-to-Date on Technological Advances in HR Applications Maintaining a Global Business Perspective

HR Managers today are focusing attention on the following

a) Policies: HR policies based on trust, openness, equity and consensus. b) Motivation: Create conditions in which people are willing to work with zeal, initiative and enthusiasm; make people feel like winners. c) Relations: Fair treatment of people and prompt redress of grievances would pave the way for healthy work-place relations. d) Change agent: Prepare workers to accept technological changes by clarifying doubts. e) Quality Consciousness: Commitment to quality in all aspects of personnel administration will ensure success.

HUMAN RESOURCE MANAGEMENT IN A CENTURY OF GLOBALIZATION

APPROACHES TO MANAGING AND STAFFING SUBSIDIARIES 1. Ethnocentric: The home country practice prevails with this approach. Headquarters from the home country makes key decisions, employees from the home country hold important jobs, and the subsidiaries follow the home country resource management practice. 2. Polycentric: Each subsidiary manages on a local basis. A local employee heads a subsidiary because headquarters managers are not considered to have adequate local knowledge. Subsidiaries usually develop human resource management practices locally. 3. Geocentric or global: The company that applies the global integrated business strategy manages and staffs employees on a global basis. For example, Electrolux (the vacuum cleaner company) has for many years attempted to recruit and develop a group of international managers from diverse countries. These people constitute a mobile base of managers who are used in a variety of facilities as the need arises.

In the ethnocentric approach, the cultural values and business practices of the home country are predominant. Headquarters develops a managing and staffing approach and consistently applies it throughout the world. Companies following the ethnocentric approach assume the home country approach is best and that employees from other parts of the world can and should follow it.

MAJOR FUNCTIONS OF INTERNATIONAL HUMAN RESOURCE MANAGEMENT

RECRUITMENT AND SELECTION Recruitment and selection are the processes through which an organization takes in new members. Recruitment involves attracting a pool of qualified applicants for the positions available. Selection requires choosing from this pool the candidate whose qualifications most closely match the job requirements. In companies that function in a global environment we have to distinguish different types of employees. Traditionally, they are classified as one of the three types: 1. Parent country national: The employees nationality is the same as the organizations. 2. Host country national: The employees nationality is the same as the location of the subsidiary. 3. Third country national: The employees nationality is neither that of the organization nor that of the location of the subsidiary.

DEVELOPMENT AND TRAINING

The overall aim of the development function is to provide that adequately trained personnel in a company are capable to fulfill their goals, as well as to contribute to better performance and growth with their work Creation and transfer of international human resource development programs may be carried out in two ways: 1.Centralized 2.Decentralized With a centralized approach, training originates at the headquarters and corporate trainers travel to subsidiaries, often adapting to local situations. This fits the ethnocentric model. A geocentric approach is also centralized, but the training develops through input from both headquarters and subsidiaries staff. Trainers could be sent from various positions. In a decentralized approach, training is on a local basis, following a polycentric model. When training is decentralized, the cultural backgrounds of the trainers and trainees are usually similar. Local people develop training materials and techniques for use in their own area.

PERFORMANCE EVALUATION
In companies, the performance evaluation is most frequently carried out for administration or development intentions.

REMUNERATION AND BENEFITS

Remuneration of employees has a key role in acquiring new employees and is important for employees as well as for the employers. Pay is the basic resource of living of the employees, while benefits cover better health care, the possibility of spending holidays in the companys holiday facilities at a favorable price and also other advantage

MANAGEMENT OF EXPATRIATES
One of the most challenging tasks for any company operating internationally is to manage its expatriates. The statistics showing their efficiency on that matter are not encouraging. For example, the failure of U.S. expatriates (the percentage who return prematurely, without completing their assignment) is to be in the 20 40% range. In Japan, the failure rate is less than 5% for their expatriates. One of the reasons for the difference is that Japanese expatriates receive far more orientation and language instruction than U.S. expatriates do. 1. The reasons for expatriate failure In international companies, it is important to understand the reasons behind expatriates high failure rates so that preventive measures can be taken. Six factors account for most failures, although their relative importance varies by firm.These are: career blockage, culture shock, lack of cross-cultural training, an overemphasis on technical qualifications, a tendency to use international assignments as a way to get rid of problem employees, and family problems. 2. Cross-cultural adjustment Expatriates and their families need time to become familiar with their new environment and to become comfortable living there 3. Expatriate reentry After the expatriate completes his assignment and returns home, he must adjust in the same way as when going abroad.. The disorientation experienced by a returning expatriate is known as reverse culture shock. 4. Selection of expatriates To choose the best employee for the job, management should: Emphasize cultural sensivity as a selection criterion Establish a selection board of expatriates Required previous international experience Explore the possibility of hiring foreign-born employees who can serve as expatriates at a future date Screen candidates spouses and families

5. Expatriate training expatriates are more successful when their organizations train them to prepare for their life and work abroad. Lack of training is a major cause of expatriate failure. 6. Expatriate evaluation and remuneration The performance evaluation of expatriate managers is particularly difficult. The job a person does abroad can include much more than what he does at home. A manager often steps into the role of counselor, trainer, troubleshooter, or diplomat, in addition to his assigned job responsibilities. With the need for adapting to a new culture, a different way of doing business, and often a new language, many factors influence expatriate performance. An organizations general policy influences expatriate remuneration. Three common approaches are: a home-based policy, a host-based policy and a region-based policy.With a home-based policy, emloyees remuneration follows the scale of their home countries. The host-based policy sets salaries at the level of the host country, with benefits usually tied to the home country. Finally, region determines the third approach. Remuneration for employees working outside their home countries reflects whether their relocation is within their home region or in another regio

HUMAN RESOURCE INFORMATION SYSTEMS

With the changing world and constant new technology that is available, managers need to be aware of the technology that will increase effectiveness in their company. Human resource information systems (HRIS) have increasingly transformed since it was first introduced at General Electric in the 1950s. HRIS has gone from a basic process to convert manual information keeping systems into computerized systems, to the HRIS systems that are used today. Human resource professionals began to see the possibility of new applications for the computer. The idea was to integrate many of the different human resource functions. The result was the third generation of the computerized HRIS, a feature-rich, broad-based, self-contained HRIS. The third generation took systems far beyond being mere data repositories and created tools with which human resource professionals could do much more.

Applications of HRIS
The efficiency of HRIS, the systems are able to produce more effective and faster outcomes than can be done on paper. Some of the many applications of HRIS are Clerical applications, applicant search expenditures, risk management, training management, training experiences, financial planning, turnover analysis, succession planning, flexible-benefits administration, compliance with government regulations, attendance reporting and analysis, human resource planning, accident reporting and prevention and strategic planning. With the many different

applications of HRIS, it is difficult to understand how the programs benefit companies without looking at companies that have already benefited from such programs. Human Resources Information Systems (HRIS) is an integration of HRM and Information Systems (IS). HRIS or Human resource Information system helps HR managers perform HR functions in a more effective and systematic way using technology. It is the system used to acquire, store, manipulate, analyze, retrieve, and distribute pertinent information regarding an organization's human resources. The HRIS system is usually a part of the organization's larger management information system (MIS)

HRIS can be applied in the following areas of HRM

HR planning Succession planning Work force planning Work force dynamics analysis Staffing Applicant recruitment and tracking Employee data base development Performance management Learning and development Compensation and benefits Pay roll Job evaluation Salary survey International compensation Benefits management Develop innovative Org. Structure Develop IT

Barriers to the success of an HRIS

Lack of management commitment Satisfaction with the status quo No or poorly done needs analysis Failure to include key people Failure to keep project team intact Politics / hidden agendas Failure to involve / consult significant groups Lack of communication Bad timing (time of year and duration

SIX SIGMA IN HRM

Six Sigma is a logical and methodical approach to achieving continuous improvements in areas critical to the success of any manufacturing or service-oriented business. This process improvement methodology was developed in the 1980s in Motorola's high-volume manufacturing environment. This has contributed to the creation of the general opinion that Six Sigma is only applicable to high-volume, manufacturing processes. Actually, Six Sigma is applicable to both manufacturing and service industries, and to both high- and low-volume production environments. The Six Sigma HR team was established, involving HR process owners, facilitator (Six Sigma Black Belt) and mentor (HR Director). Internal customers were identified as critical stakeholders and their participation was secured through their direct/indirect representation or through feedback communication. The analysis started with the development of HR process maps, which effectively revealed shortcomings in the processes with immediate remedies and benefits. Communication, resourcing, rewarding and development were selected as the first process.

Use of SIX SIGMA Improve

Development and implementation of improvement solutions followed identification of vital input parameters that affect selected process measures of performance (MOPs). Monitoring of improvement actions is realized through implemented HR database. Vital process inputs and process results were monitored and correlation verified. The focus has gradually shifted from monitoring MOPs to measuring and controlling inputs that control MOPs and reporting MPOs Trends. .

Control
The key control objective is to sustain and get a continuous improvement process embedded into HR processes. A quarterly HR review report is developed and issued and presented by HR. It contained process analysis results (control charts, histograms, trends and other monitoring charts), conclusions, observations and improvement actions to be completed by the next review and a Six Sigma score chart.

TENTATIVE TOPICS
New Conceptualisation of Jobs Alternative Work Arrangements Balancing Work and Family Career-Related Issues and Workforce Diversity Organizational Learning and Knowledge Management Loyalty and Commitment of Employees: Attracting and Retaining Employees The High Involvement Workplace Teamwork in the Workplace New Pay Practices Multi-source Performance Feedback (360 degree Feedback) Downsizing (Rightsizing) Issues Expected Issues Relevant to HRM Environmental or labour market changes with which the HR function must address Expected changes in HRM practices in the firm Biggest HRM challenges Legal challenges or concerns Use of New HRM Programs and Practices Changes in design of jobs Changes in work structure from individuals to teams, empowering workers Alternative work arrangements (flexitime, job sharing, telecommuting, etc.) Contingent workforce (temporary workers) Diversity of workforce Attracting and retaining employees Work-life balance programs Restructuring & downsizing Employee attitude surveys Career planning programs (e.g., developing skills, mentoring, succession planning) Continuous learning culture Knowledge of management programs/issues

HUMAN RESOURCE MANAGEMENT OUTSOURCING

The use of outside bussiness to perform necessary business activities and process in lieu of internal capabilities. Outsourcing basic human resource services can be the key to achieving a more influential and strategic role for the HR function.

ADVANTAGES OF OUTSOURCING Reducing costs: Key determinator in many outsourcing decisions, but should not to be
considered in isolation from other costs/ benefits;

Increasing effectiveness of HR delivery: Experienced outsourcing providers can often

deal with HR processes more effectively. For example, recruitment may be undertaken more quickly, reducing employee turnover costs and speeding up the pace of growth;

Providing greater expertise: External providers may offer greater levels of specialist
knowledge or experience than affordably available in-house;

Moving HR up the value chain: Outsourcing human resource administration can lead to a
shift in HR focus towards policy and decision making;

To aid organizational growth: Fast-growing organizations can lack the HR capacity to

deliver business objectives, making HR outsourcing an attractive solution.

Outsourcing & its HR Dimensions:

In to-days global village, growth is evident and important for survival of any organisation. During the 1990s, there has been a movement away from vertical growth strategies toward cooperative contractual relationships with suppliers and even with competitors. These relationships range from outsourcing, in which resources are purchased from outside through long-term contracts instead of being made in house (for example Hewlett- Packard buys all its laser engines from Canon for HPs laser jet printers), to strategic alliances, in which partnerships, technology licensing agreements, and joint ventures supplement a firms capabilities (for example, Toshiba has used strategic alliances with GE, Siemens, Motorola and Ericsson to become one of the worlds leading electronic companies). Outsourcing simply means hiring someone from outside the company to perform tasks that could be done internally. Companies often hire the services of accounting firms, for example, to take care of financial services. They may hire advertising firms to handle promotions, software firms to develop data- processing systems, or law firms to handle legal issues.

McBer hired most of Kelloggs secretarial staff, so even though the people were employed by a different company, their job and locations stayed the same. This process is known as employee leasing. In some cases, the outside vendors may actually hire the displaced employees. For example, M. W. Kellogg Inc., a petroleum services company based in Houston, recently outsourced its entire Employee leasing has been growing rapidly. The value of employee leasing lies in the fact that an organisation can essentially maintain its working relationships but shift the administrative costs of health care, retirement, and other benefits to the vendors. The market for providers of outsourced service of all types is growing rapidly. In 1996, American firms spent over $100 billion in outsourced business activities. Globally, outsourcing usage grew by 35 percent for the 12 months during the year 1997. It was estimated that by 2000, expected to increase to $200 billion. According the Hewitt Associates survey of large employers conducted during 1996 found that 93 percent of respondents outsourced some of their HR functions. Another survey conducted by American Management Association (AMA) during 1996 confirms that 77 percent of firms outsourced their HR activities up from 60 percent in 1994. The 1997 survey of Human Resource trend in 1700 organization reported that 53 percent planned to outsource more in the future. HR Departments are facing the classic make or buy decisions that other functional areas confront when considering the outsourcing of services or products. From the review of literature, it has been found that there are five competitive forces that are driving more companies to outsource some or all of their HR activities (1) Downsizing (2) Rapid growth or decline (3) Globalization (4) Increased competition and (5) restructuring. Over the past decade, these factors have significantly altered the strategy and structure of many firms.

The Sourcing Decision

Outsourcing is becoming an increasingly important part of strategic decision-making and an important way to increase efficiency and often quality. Organisations competing in global industries must in particular search worldwide for the most appropriate suppliers. We should now discuss outsourcing in the Indian context. About 60 percent by value of a Bajaj vehicle was outsourced. Virtually no components were imported and 70 percent of Bajaj Autos requirement was sourced from within the State of Maharashtra. Compared to its competitors, Bajaj Autos dependence on vendors was relatively low: over 90% of Hero Hondas components, for example, were outsourced. At the same time, the level of outsourcing had begun to creep upwards. According to Arvind Gupta of Bajaj Auto, we used to take 1.9 man-days to make a scooter. Now because of

outsourcing it has come down to between 1.4 & 1.5 man-days. Of this reduction, 40% is from off loading and 60% from productivity increases. TI Cycles had set itself an ambitious target of becoming the number two bicycle manufacturer by 2000 with sales of 35 lakhs bicycles in the domestic market while at the same time achieving 40% ROI. TI Cycles singled out a few areas of the value chain for special attention and thrust. The company tied up its outsourcing arrangements with Avon Cycles in Punjab and Hamilton Cycles in Mumbai with a view to expanding its reach in the northern and western markets respectively. With these arrangements, TI reached a stage where its outsourcing was much higher than Hero and Atlas, who were more vertically integrated. In the late 1990s, Philips along with Sony took the outsourcing route. Organisations can benefit from the new concepts of outsourcing by generating maximum return on investment through better productivity. Outsourcing lead to reduction in fixed cost, hence a lowering of break even point on capacity utilisation leading to higher sustainability of the company in recessionary market. This also leads to improved cash flow as the investment in fixed cost on tangible fixed assets is reduced. The outsourcing programme is also being practiced in Public & Private Sector enterprises to raise productivity. Nowadays many companies have outsourced the car-pooling services. Many leading PSEs have outsourced their maintenance activities (for example annual over hauling, major repairs work etc) thus saving huge cost on HR. Outsourcing is a fast and flexible approach to cover resource gaps. As expectations continue to rise to higher standards, any business will doubtless continue to benefit from outsourcing technical skill. It is a new coinage of an old decision-making model known as make or buy, but outsourcing has enlarged the dimension of make or buy concept. Quality assurance and cost reductions have become the prerogative for the competitive sustenance in an open international market. Power of outsourcing lies not only, in its capacity to effect a rapid, instant solution to an organisations problems but also in its potential to help the organisation to re-think its entire way of doing business, even its reason for existence.

The two terms contracting and outsourcing are used interchangeably but they are not same at all. Contracting is when a company (buyer) purchases goods or services from another company (supplier or vendor). In this situation the buyer has the control over the situation and instructs the vendor to work accordingly but in the case of outsourcing the buyer turns over the control (ownership) or the process to the supplier. The buyer asks the supplier what results it wants and the supplier decides how to achieve that. In outsourcing the supplier has the expertise and the economies of scale During the year 2002, HP Services the software services arm of Hewlett Packard (HP), got a contract for handling consumers product major Procter & Gambles global IT outsourcing. At $ 3.5 billion and across 160 countries, this was a large and beautifully structured deal. While HP gets the IT services part of the deal. P & G will allot the building and real estate management to another player and employee payroll management and accounts payable to two others. Dont allow sacred cows. Except for core competencies, all other HR activities should be considered as candidates for outsourcing. Determine whether the desire to outsource an activity is driven by its low contribution to core competencies, influences from the external environment, or poor management of the activity. Recognize that performance is more important than low HR department head counts or lower costs. Beware of vendors that supply off-the shelf solutions that do not fit the companys needs. Avoid excessive reliance on vendors. Decide how much control is needed for various HR activities and whether control can be retained with outsourcing. Identify critical personal benefits of outsourcing.

Selecting and Negotiating with Outsourcing Vendors

Assign a high weighting to vendors knowledge of the industry. Perform reference checks of potential vendors. Understand the costs involved in switching vendors for outsourced services.

Managing the outsourcing Transition

Expect the internal HR team to resist outsourcing and develop ways of managing this resistance.

Anticipate conflict and develop a plan for resolving it in a manner that supports the relationship with the vendor. Anticipate changes to HR culture and careers.

Managing Vendor relationships

Develop long-term relationships with outsourcing vendors where such continuity is critical. Develop staff members to become effective mangers of vendor relationships. Maintain stability of the in-house staff who oversee vendor relationships and understand the performance expectations originally negotiated. Require competitive bidding for each outsourced service at regular intervals.

Monitoring and Evaluating Vendors Performance

Establish expectations, measures, and reporting relationships up front for both outsourcing parties. Insist on high quality performance by HR vendors. Insist on accurate and frequent status reporting by
HR vendors and immediate notification when problems arise.

Establish performance targets for vendors with the assistance of outside consultants when necessary. Consider internal customer surveys to evaluate vendor performance. The choice to outsource some or the entire HR domain is becoming increasingly important for most organisations. Macro-economic and environmental forces have compelled organisations to restructure and re-examine all management processes, including HR management. In order to contain costs, organisations have been downsizing, outsourcing and leasing employees, and enhancing productivity. HRs role is to maintain the relationship between a company and its employees, while implementing the changes.

HUMAN RESOURCES PLANNING & DOWNSIZING

Over the past decade downsizing has been in full swing and reductions in the work force became a fact of life in the world of work. For many organizations, these actions were necessary to improve profitability, eliminate obsolete functions and reduce overstaffed areas. As organizations move to-wards more strategic workforce management, downsizing will remain part of the work force landscape, but the catalyst for it will change. Downsizing began as the strategy of sickly companies shedding workers in the face of weak demand, but soon strong firms looking to boost shareholder value also adopted the policy. Downsizing can be used as a strategic option that management can exercise in order to boost equity value. Downsizing sometimes called rightsizing refers to the planned elimination of positions, operations or jobs. This programme is often used to implement retrenchment strategies. A good retrenchment strategy can thus be implemented well in terms of re-organizing but poorly in terms of staffing.

VOLUNTARY REDUNDANCY & WAYS OF DOWNSIZING

There was a time when voluntary retirement used to be the last resort for organizations facing compelling business conditions. But to-day voluntary retirement schemes (VRS) have become an in-thing for surviving in the fiercely competitive market. The ultimate objective is to reduce the total manpower for savings in wage cost to bring down the cost of product or services. If this is the ultimate objective, one has to examine how much the wage cost constitutes as a percentage of the total cost and how much the other factors of production contribute to the total cost of production. Except for highly labour intensive manufacturing or process units, major contributors to the cost of production are basic raw materials and consumables, power and fuel, maintenance and spares, the depreciation charges for plant and machinery and of course the cost of servicing the loans from the banks or servicing the debentures. In many large size organizations, there is no more lifetime employment. Companies have been downsizing through the process of a compensation package based on Voluntary Retirement Schemes (VRS). VRS is viewed as one of the methods for the turnaround of the company when business cycle is on a declining curve. The symptoms of such decline are seen in gradual decline in profits, reduction of market shares, loss of monopoly, fast emergence of new technology, etc. When these symptoms are round the corner, management must initiate action through strategic planning. This chapter focuses mainly on the four major ways of direct downsizing of workforce and also covers practices adopted by different corporate houses in India and abroad. The major ways of downsizing are as follows: -

 Lay-off Retrenchment Closure Voluntary Retirement

Lay off: It is a temporary measure to reduce workforce in case the organisation faces problems
like shortage of fuel or power, accumulation of raw material and finished stock due to recession, shortage of working capital, breakdown of machinery or natural calamity. The reasons under which employers can lay-off workers are very specific and limited in number. According to Section 25-m of the Industrial Disputes Act, 1947 unless the lay-off is due to shortage of Power or natural calamity no worker can be laid off without the prior permission of the Appropriate Government, in case the number of workers exceeds 100. A well-known manufacturer of textiles, Mafatlal Industries had declared a 35 days lay-off in its spinning, weaving and grey-folding departments which would have affected 1,200 workers. It was aimed at cutting production due to recession in the textile industry and cutting costs. The lay-off was declared illegal by the Labour Department. Another Company, Hindustan Motors, one of the key players in Automobiles, in the recent past entered into a legal course against the order of refusal of permission of lay-off. The issue is still pending before Calcutta High Court. Ashok Leyland, a leading manufacturer of automobiles, decided to shut down its Ennore plant for 12 days in June, 1998 when stock piled up due to recession, in the commercial vehicle sector. It was done with the cooperation and approval of the union. That period was not treated as lay-off technically and workers were entitled to full wages and allowances except incentives. According to a study of the top 100 Fortune 500 companies by Kenneth, Paul and Thomas (1994) to track their lay-off announcement Motorola and Texas Instruments, both US-based companies adopted different strategies to cope up with recession. Texas Instrument terminated the jobs of several thousand employees and had to rehire, retrain, and motivate the employees when things improved. Motorola adopted a different strategy. The employees were required to work one day less in every two weeks during the recession period. The Philosophy behind this was We are in the boat together.

Retrenchment: Under the Industrial Dispute Act, 1947, an organization can retrench
employees for any reason other than termination of employment due to disciplinary action. It does not mean retrenching all the employees due to closure. The employer can prune the workforce using this method and pay them the retrenchment compensation as stipulated in the Act. But the employer has to retrench the junior- most employees even if they are competent based on the LIF (Last in First out) principle. Very recently the Union Cabinet has approved the retrenchment of 218 workers in Hindustan Vegetable Oils Corporation a public unit based in Delhi. The unit was ordered to shut down by the High Court a few years back and it had been incurring a monthly expenditure of Rs.25 lakhs on idle wages (Human capital Oct. 199). In February 1994

113-crore Modern Food Industries was allowed to close down its Ujjain factory and retrenched 126 employees. Such cases of Government approvals in case of large companies are few and far between. Retrenchment is not just a simple means to downsize workforce. It involves a tricky and complex process for identifying the non-performers, who are required to be separated from the organization permanently.

Closure: An employer can close down the whole or part of a unit if the circumstances that lead
to closure are beyond the control of the employer. The Government has to be notified at least 90 days before the intended closure, citing reasons there for. Section 2 (cc) of the Industrial Disputes (Amendment) Act, 1982 defines closure to mean the permanent closing down of a place of employment or part thereof . Section 25 (FFF) imposes a liability on the employer who closes down his business, to give one months and pay compensation equal to days average pay for every completed year of continuous service or any part thereof in excess of six months. In case of closure on account of unavoidable circumstances beyond the control of employer, the maximum compensation payable to a workman is his three months salary (Srivastava, 3). The Ghatkapor (Maharashtra) unit of BOC has been given permission by the Maharashtra Government shut down on grounds of continuing losses and poor productivity. The losses were to the tune of Rs. 8 crores in the past seven years (Human Capital, March, 1999). In1994, The Bhandup plant of Hindustan Ciba-Geigy in Maharashtra was closed down and the employees were offered VRS. Levi Strauss & Co., the renowned manufacturer of Jeans has planned to shut down around 11 of the North American facilities and cut 5900 Jobs by shifting most of its production activities overseas to reduce labour costs (Human Capital March, 1999)(4). One of the most important drawbacks of these methods of downsizing is that they cannot be used at the discretion of the employer in case of large organisations (where the number of employees exceed100). Approval of the Government before lay-off, retrenchment and closure is compulsory. In a country like India, where unemployment is a big problem, the Government is very reluctant to give permission for cutting jobs even if the reasons are genuine. Very often, long battles are fought in the court of law where the balance may tilt in favour of any one of the parties. Trade Unions also offer stiff resistance. J.K. Synthetics had closed down its fibre plant in Kota. A case was filed against the company and the legal battle continued for 14 years. The Supreme Court eventually declared the closure illegal and ordered the reinstatement of 1,100 workers with full compensation.

Human resource planning vs. VRS: Perhaps the most important but generally most
neglected aspect of VRS is detailed human resource planning. The basic assumption for introducing VRS is that a number of employees shall leave the company and therefore, for maintaining an efficient and optimum level of production, the retained employees are to be effectively utilized. The issue is not as simple as it appears to be. The first and immediate reaction of the employees is about their traditional concept of work, and the existing work culture perpetuated for long years to which the workers have been accustomed with. For example, in most industries, the skilled workmen or technicians do not attend a job unless they are given a helper to assist them. Human resource planning must take into account as to how such issues are dealt with. A proper work-study would reveal that most of the times while technicians attend to their jobs, the helpers stand idle and their presence is not required technically. But nevertheless being assisted by helpers satisfy their unconscious esteem needs, based on hierarchical concept in the industry. The other aspect of human resource planning is to identify old and ineffective persons who are perpetually sick, alcohol or drug addicts and habitual absentees and thus have least or very low productivity. Along with this, lazy but, self-proclaimed group leaders are also to be identified. For each of these cadres and categories of organisational members different approaches are to be thought of and in this process resorting to administrative actions through the specific provisions of the Standing Order may well be considered, before initiating discussions on VRS. The most vital aspect of human resource planning is to prepare a skill inventory. Persons with specific skill and expertise have to be retained. An important aspect is polyvalent or multidisciplinary skill development programme, which should be organized in a planned manner before VRS is introduced. Job rotation and redeployment are unavoidable and for this, timebound training programmes are extremely necessary. Investments in such programmes give good returns. With the advent of the e-commerce and fast development of technology, organizations are bound to have flatter organisation structure by reducing the number of layers for their survival. A well worked out manpower plan shall be an important pre-requisite to convince the collectives that after the VRS is implemented, the retained workers shall not be unjustifiably burdened with excessive workload. Management must deliberately avoid engaging some chosen retired, employed on contractual basis for availing their skill and expertise. If such practice is followed, possibilities of discrimination and favouritism will not only disrupt the credibility of the management but also will adversely affect the morale of the existing employees.

Benchmarking VRS practices and Compensation Management: Having identified

the reasons for the present downtrend of the organization and also having decided the probablactions required for rectification, the company must compare its vital data for all the

factors with the best company in the same or similar trade. Such benchmarking helps in understanding the level of efficiency at which the company is presently working. The compensation package normally determined on existing salary, past service, future service, types of compensation packages being offered in the industry / region and also the financial situation of the existing company. By and large, the pay back period of the compensation package in companies is less than three years. Voluntary retirement is the golden route to retirement and has become one of the more favoured ways of dealing with the redundant workforce in an organization. The most human technique for downsizing the workforce in an organization is the VRS. The golden handshake, as it is often called, is virtually corporate Indias only option today for shedding manpower. The method offers employees a lucrative severance package: they cannot refuse particularly since law makes it tax-free so that they retire of their own volition. Voluntary separations cause less pain and agony. It gives people choice and discretion rather than making them the victims of management decisions. VRS is considered to be a softer option compared to retrenchment because of legal difficulties, trade union opposition, and obligations under the existing collective agreements and considerations of good industrial relations. Thus, Voluntary Retirement Scheme (VRS) has become one of the ways of dealing with redundant human resources in an organization. As the name implies, opportunity is given to employees to retire voluntarily. As an inducement, higher compensation than is paid under retrenchment /normal retirement is paid along with, in most cases, some allowance for settlement at native place or any place of the persons choice if such settlement/resettlement occurs within a stipulated time. If this is not adequate, some fringe benefits like medical reimbursement/insurance are offered even after voluntary retirement. The VRS is also commonly referred to as Voluntary separation Scheme (VSP) or the Golden Handshake Programme (GHP), Venkat Ratnam. In this context, INDALS Belgaum Smelter case is a unique success story of dealing with 472 redundant workers when 187 operating pots at Belgaum were de-energised and went off production during 1992. This was the sharp escalation in power costs imposed by KSEB. Power is an important input in aluminum smelting and is considered almost a raw material for the production of the metal world over. In the year the smelter was losing Rs. 6 lakhs. Reflecting its old value system and respect for its people, INDAL handled the situation in a very human and compassionate manner. It is worthwhile to mention that the VRS that the company designed and implemented was unique. Before designing and introducing scheme the company did a lot of preparatory work. A team of senior officers was sent to Bombay to visit some of the well-known companies, namely, Premiere Automobiles, Ciba-Geigy, Hindustan Lever, etc. with a view to collect their VR schemes. The team also studied the strengths and weaknesses, success and failures of the different VR schemes, before developing, designing and implementing their own scheme. The decision to implement the VRS though painful was carried out as the last available

alternative to reduce surplus manpower. What was unique about VRS (policy) adopted by the company was that over the benefits payable as per public sector enterprises, the company built in additional incentives based on age-like medical insurance, etc. The scheme was designed to enable the retired employees to identify with the company. It provided adequate medical and insurance coverage for the employees in the post- retirement years. The company also granted education scholarships to the children of retired employees. Entrepreneurial Development Programmes were developed for employees accepting VRS. This covered counselling, arranging loans, helping them with project profiles, tax and investment planning, organising relevant training, etc.(for details please see the enclosed case on Belgaum Smelter.

CARE FOR THE SURVIVORS

The survivors experience an emotional shock that prevents them from suddenly changing direction. They freeze like a deer in the head lights. The familiar pattern is broken and the momentum that comes from routine and repetition will take time to recover. Not knowing what to do people will wait and see what happens. They are waiting for leadership, some one to tell them what to do. People fell at seeing their friends leaving or their positions eliminated. It feels very much like a death in the family and needs the compassion and time for mourning we expect whenever a loved one is lost. A good manager will have the compassion for the human need to cope with the shock and fear that people feel, combined with a sense of optimism direction and mission will help them through the often painful transition from what was to what is to be. Thus, planned separation is not an end itself. It is a means to an end and the end result contemplated is to rejuvenate the company is in the highly competitive market place. It is therefore essential to plan for working out schemes that the retained organisational members are not demoralised. A fall out of VRS is that the retained employees are a scared lot, always afraid and apprehensive that anyone or some of them may be asked to retire at any time. Though in reality it is not possible to assure all the retained employees about their retention for all time in future, management should demonstrate by its action that retained employees are considered and treated as valued members of the organisation. It is important to maintain the morale of the retained staff. It is therefore, necessary to maintain close communication with them and dispel rumours that are generally rampant in such condition.

COUNSELLING SERVICES
From the very beginning initiation of VRS, it is to be realised that for making the scheme successful, efforts to be made to build a good deal of counselling services. Counselling should be used as a process to communicate effectively with the orgasnisational members so that they realise that the VRS is last resort for the revival and survival of the organisation.. A good couselling session must include practical advice about how to use

or invest the sum received as compensation under VRS. The retained employees shall also need advice not only on investment but also on income tax implications. It is evident that if a decision is taken for downsizing the organisation, a good amount of planning and preparation is essential. All the issues pertaining to it must be considered concurrently in tandem. Transparency in the management actions and fairness in its dealings are extremely necessary.

CONDITIONS FAVORING THE EFFECTIVE USE OF VR

The fact that management to use or willing to use VRS is a prerequisite for introduction of the technique, but certain conditions encourage or perhaps are necessary for its deployment. The facilitating factors comprise: Availability of sufficient finance Favourable workforce characteristics Absence of union opposition of control; and Availability of work for non-volunteers It seems clear that more money is needed if an individual is to be persuaded rather than forced to leave. Age profiles, length of experience, employment pattern and earnings levels may be relevant to the effective use of VR. An age profile of employees with a high proportion of people in the early retirement age group means that what is typically the best financial deal is available to a relatively large proportion of workforce. On the other hand, a relatively old workforce, with substantial length of service in individual cases will increase the size of retirement packages because the statutory formula is based on partly upon age and length of service. The question of union attitude towards VR and the extant which a union can prevent its members volunteering it thinks it is necessary to communicate directly to employees in the hope of bringing forth volunteers. If the union has little control over its members, this may prove successful. The initiative for VR may come from the union rather than the employer. VR assumes that work is available for those who want to stay. VR should be applicable to any company for slimming exercise rather than closure.

MANAGING HUMAN RESOURCES ACROSS THE GLOBE

What kind of a new form of glue helps to manage human resources worldwide? Two ideas emerging from organizational behaviour literature in recent years will help to find the answer. The first comes from the work of Paul Evans and Yves Doz from INSEAD business school in France. The second from research conducted by Meridith Belbin in UK, Cambricge university. Evans and Doz have described the managerial challenge in complex international organizations in terms of balancing opposing dualities (Hoecklin, 1996). They believe that the pace of change and the new complexity of globally operating companies create the need for harmonizing seemingly opposing forces, such as: Thinking global Acting local Decentralization Centralization Planned Opportunistic Differentiation Integration Change Continuity Top-down Bottom-up Delegation Control Competition Partnership They urge that such forces should be considered not as binary, either/or decisions, but rather as complementaryforces that need to be balanced. The analogy of the human personality is a useful one. Instead of trying to maximize anything (decentralization, teamwork, formality, and so on), an organization should seek to ensure that it maintains a minimal threshold of desirable attitudes. This conceptual framework itself is a useful one in which to consider differences in culture. The whole challenge of managing across cultures is about balancing seemingly opposing values and practices in such a ways as to create advantages from them. The Cambridge university professor Meridith Belbin provides another useful frame in which to consider the impact of culture on various aspects of HRM. In his original research with highperforming teams, Belbin identified eight team roles that individuals can play when working in teams and that are required for effective team working. He suggested that each individual has a primary role that he or she tends to feel most comfortable playing, and one to four back-up roles that they are able to play, but which they are less comfortable with. Such research are particularly relevant to all the areas of strategic HR across cultures and are directly related to the work of Evans and Doz. In addition to recognizing that dualities exist and must be balanced, Belbins work adds the necessary dimension of considering diversity, or dualities, constructively. If Belbins findings can be generalized to broader organizational functioning in complex, diverse organizations, it is clear that HRM requirements become less a matter of having the right people at the right place at the right time, and more a matter of integrating selection, reward and appraisal practices within organizational values which will allow a balanced outcome under a range of cultural conditions.

TRENDS AND VALUES IN HRM IN THE UNITED KINGDOM, USA AND JAPAN UNITED KINGDOM
(labour force 29.4 million, unemployment s rate 5 per cent in 2004). The general context within which HRM changes have taken place in the UK is a reflection, primarily, of changing regulatory frameworks, globalization and strong pressures to drive costs downwards. The latter are often focused on labour issues, because labour costs make up a significant proportion of total costs in many sectors of economic activity. The key role of labour, and thus HRM, in modern organizations is emphasized by Becker (Bercker, 1998). He concludes that getting the people issues right is critical. This perspective is reflected in the increased professionalism of the HRM function in the UK.

Regulation:
HRM practices in the UK are influenced by increasing levels of regulation arising both from the UK government and from membership in the EU. The UK governments tighter legislative controls on labour unions are the major contributory factor in the dramatic fall in strike activity. Working days lost annually per 1000 workers plummeted from 330 between 1980 and 1983 to only 11 days in 1999/2001. HRM practitioners, for the most part, have less concern with organized labour. The establishment of more employee supportive legislation is found in the introduction of the minimum wage. Nevertheless, much of the current UK employment legislation remains restrictive and controlling of labour. Policies emanating from the EU have worked in the opposite direction and seek to emphasize employee welfare, involvement and commitment.

Incentive compensation:
In addition to well established incentives for equal pay between men and women, there are strong pressures to move away from standard pay scales towards systems which reflect individual performance and behavior and the specific demands and characteristics of particular (regional) labour markets. Despite the 1970 Equal Pay Act and the subsequent 1983 amendment incorporating the concept of equal value, a gender gap still exists in the UK (Sparrow, 1994). For example, in 2002, in manufacturing the average wage of full-time male employees was 415 per week compared with 273 per week for women (Institute for Employment Studies, 2003). Such contrasts are typical of all sectors. The monitoring the equal opportunities on the basis of sex, raceand disability remains a high priority for HRM professionals. The continued move towards increased use of performance related pay presents a particular challenge to the HRM professionals.

Globalization:
Owing the globalization, the UK economy has been driven by a push for greater productivity with the resultant outcome of downsizing or total closure of plants (Parker, 1998). A second major challenge arising from globalization has been foreign investment in the UK. In manufacturing, almost one-fifth of UK workers are employed in foreign companies. Foreign investment has brought with it new HRM practices, which can spill into domestic forms. Employment in Japanese manufacturing firms has risen from fewer than 5 000 in 1980to over 60000 in 2000 (Institute for Employment Studies, 2003). Japanese plants have brought new HRM strategies focused around team working and total quality management. Labour shortages. Like many advanced economies, the UK has an ageing population. By the year 2040, one in four will be a pensioner and barely half the population will be under 45 (Institute for Employment Studies, 2003). It may become a necessity to make fuller use of the older employee. Hiring older employees is a strategy already adopted by some UK companies. Employees work longer hours per week than employees in other EU countries. The average working week is 44 hours with only 28 days holiday per year. Breaking this long hours culture may become a major task for the HRM professional. From October 2000, changes in the UK work permit system have made it easier for immigrants to fill gaps in the labour market. Act 2004 sets out a progressive policy of welcoming immigrants where that helps UK economy.

Flexible working:
A particular interest in the UK has been the debate about the extent of new forms of working, which include outsourcing, flexible working patterns and the emergence of new forms of work.

Outsourcing:
The move towards the flexible firm has seen a trend towards the outsourcing of activities ouside the core (Gooderman, 1999). This may take the form of outsourcing to new suppliers or changing employment contracts to hire individuals as consultants rather then employees. Increasingly too, UK firms are externalizing actual HRM activities. For example, a period of downsizing often sees the hiring of outplacement specialists. Flexible working patterns. An indicator of the importance of numerical control of labour costs is seen in patterns of short term contacts, temporary working and parttime working. The proportion of workplaces characterized by the first two forms of flexible working increase from 19 per cent to 36 per cent between 1980 and 2000. Similarly increases have been recorded in the numbers of part-time workers. By 2000, the UK had over 6.7 million part-time New forms of work. The most striking new types of workplaces are called centres. These tend to be located where labour costs are low. Because of their newness, they have employed female with little experience of office work.. Teleworking is another emerging trend. In the UK, the number of teleworkers is now estimated to more than 1.6 million. HRM practitioners need to develop skills appropriate to the recruitment, selection, and motivation of the workforce of a

virtual office. In conclusion, todays HRM professional in the UK needs the ability to operate within an increasing degree of labour regulation and to simultaneously respond to a wide range of changing individual and organizational needs in new and creative ways.

USA
(148.6 million labour force, 6.2 per cent unemployment rate in 2004)

Labour shortages:
US economic prosperity during the 1990s has led to labour shortages, which are pushing organizations to engage in creative recruitment and retention practices and to employ workers from non-traditional sources, leading to a more diverse workforce (Becker, 1999). HR professionals are realizing that they need to update their technological skills and develop systems for managing more virtual organizations. In the 2000 Society of Human Resource Management carried out Survey on HR Priorities, 64 percent of respondents indicated that recruitment would be a top issue and 46 percent said that training would be a top priority due to labor shortages (Konrad, 2001). Labor shortages have turned companies attention to retention practices, including fostering a sense of community, identifying and investing in the organizations best people, making it easy to move within the organization, hiring very selectively, providing decision-making authority to all employees. The reason why US labour shortages have remained manageable is an expanding labour supply, as firms tap previously overlooked groups such as people with disabilities, former welfare recipients, older workers, ex-convicts, and foreign students. A more diverse workforce requires organizations to change practices, attitudes to enhance performance.

Globalization:
MNCs are becoming increasingly important players in a global economy, and their HR practices are increasingly influenced by diverse cultures. A certain degree of fit between HR practices and local culture enhances performance, because congruent HR practices are consistent with existing behavioural expectations and routines that transcend the workplace (Parker, 1998). Management practices that are congruent with the nationalculture have been associated with enhanced firm financial performance. US firms seem to have learned this lesson.

Variable compensation:
Companies in the USA are moving toward pay systems that are flexible and strategically aligned with complex and changing business environments. Examples include the increasing use of competency based pay, in which pay is geared more to individual skills and abilities that contribute to company success than the job individuals perform, and broadbanding. The most significant trend is the increasing use of variable pay plans which conventionally refer to payments that are based on an objective or quantitative assessment of individual, group, or company performance, that do not add to base salary (for example, gain sharing plans, profit sharing, and stock based plan). According to a report by Hewitt Associates (Konrad, 2001), 78

percent of surveyed organizations currently have at least one type of variable pay plan in place, up from 70 percent in 1999 and 47 percent in 1990. Perhaps the most interesting variable pay trend is the increased use of stock option plans not only for top executives but for lower level employees, too. Stock options are a way to link employee pay to firm performance.

Strategic HRM:
HR is increasingly seeking a strategic role in business to help firms create value and gain competitive advantage in the marketplace. Effective HR practices that competitors cannot duplicate easily or quickly provide a competitive advantage to firms. HR can create value by developing systems to make an employer of choice to attract and retain top quality talent. Becoming an employer of choice is costly, however, and these costs are only justifiable if the firms workforce demonstrates high productivity. In addition, HR can become a strategic partner by providing tactical support for implementing a business strategy (Becker, 1999).

Future directions:
In late 2000 the US economy is slowing. Though workers may become easier to find in general as the economy slows, recruitment is likely to continue to be challenging in areas where skill shortages exist, such as IT. The US workforce will continue to become more diverse, so firms are likely to continue experimenting with variable compensation and high performance work systems to enhance productivity.

JAPAN
(68 million labour force, 5.3 per cent unemployment rate in 2004). During an extended period of economic recession for the most of the 1990s, broad and striking changes have been made to the Japanese employment system. How fundamental or reversible they are is harder to evaluate. Japans economy finally began to show signs of a recovery in 1999. If the economic recovery prevails, a considerable stabilization of Japanese HR practices can be expected, although at a higher level of market-oriented flexibility than previously existed (Selmer, 2001).

Traditional practices:
Employment is based on lifetime system, hiring of workers and managers into entrylevel positions directly out of college is common. Pay rises and promotions are automatic. In the wage system based on seniority, status and seniority are tied to length of service, rather than to job duties or merit. Although subordinates know that they can influence decisions, the ultimate decision comes from the top. Japanese managers make an active commitment to preserve harmony, through intricate53 social rituals like gift giving, bowing to superiors, and using honorific language to show deference (Bechler, 1995). Workers often gain a broad perspective on production by being rotated through different departments. Such investments in breadth of skill and overall understanding of the production process are justified by the strong lifetime

employment guarantees bonding workers to their companies and allowing the skilled and experienced production workers to contribute to management decisions.

Changing HR practices:
The breakdown of the inter firm network system of cross shareholding and preferential trading among member corporations of a business group has badly hurt the safety net of supporting the long-term growth strategy of Japanese firms and their ability to protect employees from downside market risks. Deregulation is another force for change. It has made Japanese markets more accessible to competitors, foreign as well as domestic. The aging population also has clear implications for corporate HR practice. With an aging workforce, the permanent employment and seniority system burdens firms with rising numbers of higher-paid and less productive workers (Selmer, 2001). Recently, growing numbers of companies are explicitly weighting ability and performance over tenure and age in salary decision. Finally, the transition to a service economy combined with socio-cultural and socio-economic changes has had a profound effect on Japans employment institutions. Although leading-edge manufacturers are still competitive, their contribution to Japanese domestic employment and income is shrinking, in favor of the emerging service sector as the next great engine of jobs and wealth. Employment practices of sales and service firms are different from those of manufacturing. Their younger workforce is more mobile, less committed to work and the firm. Furthermore, since the organization of work in service firms is less team based, individual performance is more easily evaluated. Accordingly, occupational skills are valued over firm-specific skills, so that broad job experience becomes the main driver of wages and performance rather than loyalty to one employer. Gender issues are rapidly surfacing in the Japanese traditionally male dominated corporate world. Japanese women, long locked in the crouch of tea serving office ladies or contract workers performing low-skilled work on the assembly line, are standing up. Professional young women are flocking to new high-tech ventures, where gender does not seem to matter much. Such opportunities have been increasing steadily over the past few years and the Equal Opportunity Law, passed in 1985, which requested employers to make efforts not to discriminate, was recently revised to make discrimination illegal. In conclusion, there are broad and striking changes sweeping the Japanese employment system. How fundamental they are, it is difficult to evaluate. No matter whether it regards performance pay or reductions of the workforce, the change of HR practices in Japanese companies seems to be slow and incremental, carefully avoiding abrupt or traumatic breaks with the past.

THE EMERGING TRENDS COULD PLAY A CRUCIAL ROLE IN

Selection of employees requires careful evaluation of the personal characteristics of the candidate and his/her spouse. Training and development extends beyond information and orientation training to include sensitivity training and field experiences that will enable the manager to understand

cultural differences better. Managers need to be protected from career development risks, re-entry problems and culture shock.

To balance the pros and cons of home country and host country evaluations, performance evaluations should combine the two sources of appraisal information. Compensation systems should support the overall strategic intent of the organization but should be customized for local conditions. Six- sigma uses rigorous analytical tools with leadership from the top and develops a method for sustainable improvement. Human resource outsourcing is a new accession that makes a traditional HR department redundant in an organization. Organizations are also required to work out a retention strategy for the existing skilled manpower by enabling culture organization

CONCLUSION
Trends in Human resource management have changed the way we work, as organizations are more depended on HRM to increase the success ratio in todays competitive global environment. Trends will continue to come as time and opportunities will keep you guessing whats next. Human resource management (HRM) will be a key area of focus in 21ST century as companies and government organizations put in place strategies to cope with the economic crisis and recovery. The so called "war for talent" is on the backburner as the focus shifts to hiring freezes, benefits and compensation cost management, and workforce reductions in the hardest-hit segments. HRM technology solutions can help savvy human resources (HR) professionals strategically manage through the crisis and prepare as the climate shifts to the upside. Trends that we will follow in 21st include managing and developing talent, embracing HRM analytics and HR technology strategy.

SOURCES
www.scribd.com www.wikipedia.com www.economicstimes.com