Factors Influencing the Personnel Function


There are a number of critical trends affecting the employment relationship that further affect how organizations need to manage their employees. Some of these trends pertain to changes taking place in the external environment of the organization; others pertain to some of the ways organizations are responding internally to such trends . The term environment of business refers to the aggregate of conditions, events and influences that surround and affect it.

External and internal factors influencing the personnel Function:

External factors

1) Technological factors
2) Economic challenges
3) Political factors
4) Social factors
5) Local and Governmental issues.
6) Unions
7) Employer’s demands
8) Workforce diversity

Internal factors

1) Mission
2) Policies
3) Organizational culture
4) HR systems.
5) Organization structure

The external environment consists of those factors which affect an organization’s human resources from outside the organization. Each of these external factors separately or in combination can influence the HR functions of any organization. The job of an HR manager is to balance the demands and expectations of the external groups with the integral; requirements and achieve the assigned goals in an efficient and effective manner. Likewise, the internal environment also affects the job of an HR manger The functional areas, structural changes specific cultural issues peculiar to a unit. HR systems, corporate policies and a lot of other factors influence the way the HR function is carried out. The HR manager has to work closely with these constituent parts, understand the internal dynamics properly and devise ways and means to survive and progress. In addition, to these the personal man has to grapple with the problems of workforce diversity. Let us examine these in detail.

Technologies changes

An organization’s technology is the process by which inputs from an organization’s environment are transformed into outputs . Technology includes tools, machinery, equipment, work procedures and employee knowledge and skills. In the present competitive world, technological break through can dramatically influence an organization’s service markets, suppliers, distributors, competitors.
Customers manufacturing processes, marketing practices and competitive position:

Technological advances can open up new markets, result in a proliferation of new and improved products, change the relative cost position in an industry and render existing products and services obsolete. Technological advancements can create new competitive advantages that are more powerful than existing ones. Recent technological advances as we all known in computers, lasers, robots, satellite networks, fibre optics , biometrics cloning, and other related areas have paved the way for significant operational improvements

Impact of Technology on HRM

New skills required: As new technologies are developed and implemented there is an urgent need to upgrade existing employees skills and knowledge if the organization wants to survive and flourish in a competitive world. Additionally, there will be growing demand or workers with more sophisticated training and skills especially in emerging hot sectors like telecommunications, hospitality, retailing, banking, insurance, biotechnology and financial services. For example service sector employees require different skills than those utilized in manufactured. They need strong interpersonal and communications skill as well as the ability to handle customer complaints in a flexible way.

Impact of technology

The impact of new technology on the total number of jobs available has been quite devastating. It has placed power in the hands of a small group of elite people in most large scale organizations. This has taken place because of deskilling of most jobs, where a few individuals tend to control the organizations through the increased availability of information . Lower and middle level positions are the worst hit in this scenario, because computers do the compilation and processing of information now. Work roles have also become more integrated. New technologies generally compel people to learn a new set of skills altogether and also learn to work together in project teams time and again.


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