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Globalisation Represents The Biggest Challenge Facing HR Professionals in 21st Century 1

The challenges of 21st century human resource management are significant. Globalization represents the biggest challenge as it has led to changes in workforce demographics, diversity, and expectations. HR professionals must now deal with multiple generations in the workforce, changing views on work-life balance, new approaches to employee engagement, and the effects of increased employee migration and digital transformation. Adapting to these rapid shifts is critical for HR to help organizations succeed in the current environment.

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33% found this document useful (3 votes)
445 views20 pages

Globalisation Represents The Biggest Challenge Facing HR Professionals in 21st Century 1

The challenges of 21st century human resource management are significant. Globalization represents the biggest challenge as it has led to changes in workforce demographics, diversity, and expectations. HR professionals must now deal with multiple generations in the workforce, changing views on work-life balance, new approaches to employee engagement, and the effects of increased employee migration and digital transformation. Adapting to these rapid shifts is critical for HR to help organizations succeed in the current environment.

Uploaded by

Devinda Herath
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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GLOBALISATION REPRESENTS THE BIGGEST CHALLENGE

FACING HR PROFESSIONALS IN 21st CENTURY

Name -
Reg Number -
Acknowledgement

I would like to express my sincere gratitude to London Metropolitan University for allowing me
to fulfill my academic area. I would also take this opportunity in thanking the lecturer for his
valuable contribution in providing the necessary knowledge in order to complete the proposal.
An extended gratitude to the coordinator of the MBA who actually guided us in completing the
assignments through his valuable and an effective way of communication and motivation.
Abstract

Human Resources departments ' Roles and responsibilities are being remodelled because the
current business is facing globalization pressures. The global talent supply is short of its long-
standing demand, and the deficit is a global problem for employers. The dearth between the
demand and the supply of skills is likely to increase, especially for highly qualified workers and
for the new generation of business leaders. Today companies want to put more emphasis on
attracting human capital than on financial capital. The important goals of the global human
resource are global staffing and management of a diverse workforce in culture and language
skills, and dispersed in different countries.

The roles of human resource departments have turned out to be important for modern enterprises
of the 21st century in today's context. This report focuses specifically on the challenges of 21st
century human resource management situations. It further establishes approaches to addressing
these problems..
Table of Contents

1.0 Introduction...........................................................................................................................1
2.0 Challenges Faced by HR Professionals in 21st Century........................................................2
2.1 Evolution of HRM............................................................................................................2
2.2 Generations Shift...............................................................................................................2
2.3 Work Life Balance............................................................................................................4
2.4 Employee Engagement.....................................................................................................5
2.5 Employee Migration.........................................................................................................6
2.6 Workforce Diversity.........................................................................................................7
2.7 Digital Revolution.............................................................................................................8
3.0 Critical Evaluation..............................................................................................................13
4.0 Self - Reflection..................................................................................................................14
5.0 Conclusion..........................................................................................................................15
References......................................................................................................................................16

List of Figures

Figure 1 - Evolution of HRM with Technological Changes............................................................9

List of Tables

Table 1 - Generations.......................................................................................................................3
Table 2 - Digitalization of HRM Funcations in 21st Century.......................................................10
1.0 Introduction

As the world is moving into new era with the dawn of 21st century human lifestyle, work
pattern, preference & expectations shifted to a completely new aspect. Organisations are in bond
with people & the Human Resource Management is the chain between the organisation & the
people. Organizational resources can be identified as anything that could be thought as a strength
or weakness of a given firm including tangible and intangible assets. There are four main
organizational resources. Such as, land, capital, labor and entrepreneurship. Any organizations'
success depends on how it manages its resources. Human Resource Management (HRM) is that
part of management which concerned with people and their relationships in the organization.
There are many definitions for HRM developed by many authors. In order to reach the corporate
objectives of the organisation HR Managers of the organisations is required to align the people in
the organisation. In order to align a group of people to a common objective it is necessary to
ensure their satisfaction. Satisfying employees is one of the biggest challenges faced by the HR
officials today. Due to the rapid changes in needs & wants of people HR officials has a major
role to play in managing human resources of the organisation within available budgets. When the
challenges of the HRM is 21st Century is considered the Globalisation can be considered as the
most critical challenge. As stated by Neo, et al. (2006) the business world in 21st century is
frequently changing, hence the organisations need to compete harder in every aspect for their
survival. Harrison & Kessels (2004) argues that the Globalisation affect the change of the world
which ultimately force the organisations to change. Globalisation is the bridge that connects one
corner of the world with the other corner. Globalisation refers to growth of social systems & at
other hand it can be the process of connecting the eras. Globalisation is the bridge between the
past & the future. It is a very broad topic & it influences many sectors in different
ways[ CITATION Dub04 \l 2057 ]

Human Resources Management is frequently challenged by the Globalisation & in the 21st
Century there are some major challenges that the HRM is facing such as providing Learning &
Development in changing environment, Generation shift, Work life balance of employees,
Employee engagement & trends such as migration.

1
2.0 Challenges Faced by HR Professionals in 21st Century

HRM is a broad area which was developed over the period of time. “HRM is a strategic approach
to managing employment relations which emphasizes that leveraging people’s capabilities is
critical to achieving competitive advantage, this being achieved through a distinctive set of
integrated employment policies, programmes and practices” [ CITATION Flo15 \l 2057 ].
Armstrong (2014) stated that, HRM is defined as a strategic and coherent approach, which is the
most valued assets of company and employees individually and collectively contributes to the
achievement of its objectives in the business context. “HRM is a managerial perspective which
argues the need to establish an integrated series of personnel policies to support organizational
strategy” [ CITATION Gup08 \l 2057 ].

2.1 Evolution of HRM

Lynton & Pareek (2000) said, if consider two centuries back, HRM which was defined as “labor
welfare” or “personnel” was associated to keep employee records, ensure of following company
rules, determent wages and compensations. According to Armstrong (2014), in 19th century at
industrial revolution, with the labor office, HRM has been came along way till Artificial
Intelligence in 21st century. Evolution of HRM is figured in below with the time ranges. If
consider today, with the digital world and changes in the business environment, the advent of
analytics, big data, robotics, automation machine learning has been highly influential regarding
HR transformation. Experts in HRM say that HR transformation has still a long way to go with
the technology changes. Some of the critical challenges faced by HRM professionals with the
evolution of HRM are discussed below.

2.2 Generations Shift

There are many generations has been identified in the modern world. Dubois (2004) stated that
only four types of generations are involed in employment. Such as baby boomers, Generation X,
Xennials and millennial (Generation Y).Which means with the time passes, in today there is a
trend of in one end workforce is aging and in other end getting younger. It can be evaluated that
there is a gap wide upping in between aging and younger population and as prime age workforce

2
is shrinking, it has become a contemporary issue in today HRM for retaining aging people and
searching talented well experienced people among youngers.
Generations can be classified according to the age as below.

Table 1 - Generations

Generation Birth Start Year Birth End Year Youngest Age Oldest Age
Name today Today
The lost 1890 1915 103 128
generation
The interbellum 1901 1913 105 117
generation
The greatest 1910 1924 94 106
generation
The silent 1925 1945 73 93
generation
Baby boomer 1946 1964 54 72
generation
Generation X 1965 1979 39 53
Xennials 1975 1985 33 43
Millennials 1980 1994 24 38
I Gen 1995 2012 6 23
Gen alpha 2013 2025 1 5
(Robinson, 2018)

Coon (2017) research done among USA multinational companies has identified, Baby Boomers
are about to be retired and Generation X and Y steps into upper level management and according
to a research done by Allen (2004) among Canada workforce, it has been highlighted that, after
economic crisis, youth hiring percentage is increasing much faster than recent years. It identified
that companies lost their knowledge as there knowledge is not formalized or written down with
the retirement of aging people and it is about to be increased in future and world is now in the
palm of millennial.

Abraham (2009) research done among selected USA young employees has identified, young
generations tend to leave office on off-time without staying overtime or work in weekends by
comparing for old generation employees. It can be identified that, Generation X and Y tend to be

3
more concerened on what the company can do for their family and friends rather than the
company loyalty. This is a great challenge for HR department for getting the maximum output
out of them via transforming core dynamics of workplace, as their behaviors and mindsets cross
the functions each other.

Cheese (2009) stated, still 30% of people form total work force is baby boomers and still exit in
workforce. In order to get the maximum contribution out of Generation X and Y by allowing
youngers to thrive in an environment that designed to ensure successive, HR department will
have to transferring knowledge and ethics for young generation from older generation via
mentoring and consistent training, which is wisdom transfer” and work life balancing
programmes, which will lead HRM to be a cost center, though goal is to be a profit center.

2.3 Work Life Balance

With the recent trends in world, people tend to be more focused on their personal life & the
freedom. Most of people want to be flexible in their activities; probably they expect the same
flexibility at their work place as well. Due to this trend most of the people prefer to work from
home or prefer to be self-employed. According to research done by Kurtzleben (2013) among
US people, both male and female are increasing their stress level due to lack of WLB that cannot
be even controlled by HRM. It can be evaluated that, employee WLB effecting factors can be
controlled by HRM only up to a limited extend, which enables a great challenge. Most of the
time HR will directly able to control organizational factors, but only limited influence can be
done on individual, societal and other factors. According to CIPD Research Report (2009), a
research done among London multinational companies’ employees, it has been identified a
positive relationship between WLB and employee commitment. It can be analyzed that
employees who have great WLB will have good performance and commitment for company,
which has been a key challenge in 21 st century for HR for ensuring WLB on each and every
employee. According to Clutterbuck (2003), study done on Roffey Park Institute, 38% of the
sample of employees considers leaving current employer to gain better WLB, even if it meant
reduced pay and low percentage of employees make use of available WLB practices. It can be
analyzed that, employees worth WLB more than money and possibility of maintaining employee

4
WLB by HR influence on company talent retention. As HR goal is to become a profit center,
though it creates cost, HR invest money with a risk on WLB programmes, assuming for getting
better performances and talent retention from employees. But in most of companies,
implementing WLB programmes is not enough to ensure employee WLB, proper trainings and
knowledge must also be provided about WLB programmes in order to convert this HR invest in
to a profit center, which has been a great challenge created by the Globalisation in the 21 st
century business world.

2.4 Employee Engagement

Organizations have realized that in today’s constantly changing business scenario, the most
valuable recourse which needs to be leveraged is Human. This means not just attracting and
retaining employees, but also keeps motivated and committed for organizational goals achieving
which is employee engagement. Many authors have defined employee engagement as below.
“Employee engagement is an outcome measured or seen as a result of people being committed to
something or someone in the business, a very best effort that is willingly given.” [ CITATION
Nal00 \l 2057 ].

“The degree of which employees are satisfied with their jobs, feel valued & experience
collaboration & trust. Engaged employees will stay with the company longer & continually find
smarter, more effective ways to add value to the organisation. The end result is a high
performing company where people are flourishing & productivity is increased & sustained can
be defined as employee engagement.”[ CITATION Gro02 \l 2057 ].

According to Hymowitz (2000) research in Procter and Gamble Company, actively disengaged
employees directly impact company under performances. It can be analyzed that actively
disengaged employees might change company culture even to reduce commitment of engaged
employees and can be figures as cost sources for HR, as company is not able to get high
commitment out of them though company give wages and other allowances. This will pull HR
for being a cost center though goal is to become a profit center.

5
According Baumruk (2006) research done in international passenger airline Jordan, company had
lower turnover rates and higher company performances due to high commitment of employees. It
indicates that if employees’ commitment and engagement towards company is high, company
will be able to achieve high performances and obtain competitive advantage. But employees will
not give their maximum contribution if the company procedures do not match with their
requirements. In order to fulfill their expectations, HR will have to take the main role on
motivating employees in order to maintain good employee engagement, which has become a
contemporary issue and a hot topic in HR agenda today.

According Harter (2000) research done among US 36 companies, it has been identified 70% of
highly talented and engaged employees inside the company was built due to management style of
the company. It can be analyzed that, monetary rewards are not only the answer for increase
employee motivation. Employer-employee relation is also an important to increase employee
engagement level, and ensuring it is a great contemporary challenge for HRM in today.

2.5 Employee Migration

Past decades have witnessed growing international migration due to emergence of integrated
open economic system and push and pull factors from both home and host country. United
Nations (2013), estimates there are currently 232 million migrant workers worldwide and it is to
be increased higher in future. In organizational point of view, migration can be result with skilled
and non-skilled employees, which have been a contemporary opportunity and challenge for
HRM on managing talent pool by aligning with migration laws.

Ulrich (2012) stated, skilled migrants play an important role in talent pool via contributing for
company competitive advantage. But as migrant talent pool is included with both skilled and
non-skilled employees, non-skilled employees are a contemporary issue for host countries’ HR
by comparing to skilled-employee migrations, as companies will not be able to get expected
output, healing for training costs and other expenditures which HR has been utilized. Apart from
that HR will have to utilize finance for rapid training as employee performance evolution will
resulted with gaps in every time on this category.

6
According to Neo, et al. (2006) in 2012 Microsoft's HR has spent $8 million on lobbing and filed
a 33 reports mentioning migration. Which can be identified that, due to migration though being a
profit center is the main goal of HR, as migration generates costs for HRM on procedures
practicing for retaining skilled migrants for a long time period, it will pull HRM for being a cost
center. According Bloom & Reenen (2010), survey done on Fortune 1000 companies, it has been
figured, companies’ HRM allocate more financials on training (language, cultural, and
operational) and migrants’ personal benefits (schooling, medical, accommodation facilities and
etc.) in order to align them with new environment.

According Connell and Burgess (2009) research done among Canadian multinational companies,
they used to pull skilled workers from developing countries for low wages. It can be analyzed
that developed countries pull skilled employees from developing countries for cost advances,
which entitle costs on developing countries’ HR on retain skilled employees within the country,
on practicing employee retention programmes. By considering all above, it can be analyse that
main challenge for HR in term of migration is to take advantage of skills and labor power of
migrants by minimizing tension created by diverse workforce in aligning with migration laws.

2.6 Workforce Diversity

According to Loysk (1996), with globalization, as the whole world became a village, today
people are no longer living and working in an insular environment. They are part of a worldwide
economy competing within a global framework. According to Burns & Barton (2012) a research
done in U.S workforce, companies are required to be interact among people from diverse
backgrounds in order to maintain competitiveness in the global market.
According to Moorhead & Griffin (1989), workforce diversity can be defined as, “similarities &
differences in such characteristics as age, gender, ethnic, heritage, physical abilities &
disabilities, race & sexual orientation among the employees of the organisation”

According to SHRM (2007), research done among 5000 SHRM HR proffesionals, in order to
manage diversity, HRM practisesis must adapt to accommodate a multicultural work

7
environment. Loysk (1996) stated that, bringing all the people of different nature under a one
roof of organization the key responsibility of HRM on diversity management. 

According to McCourt & Derek (2003), in past diversity was treated as a legal issue which is
only a challenge but now in 21st century accoring to Roosevelt (2001), companies realize that
diversity is a reality to build a stronger, competitive enterprise rather than something deal with.

According to Neo, et al. (2006) , research done on Starbucks, as an international company, HR is


responsible on recruiting qualified candidates while promoting diversity by recruiting employees
from all genders, races, religions, nationalities and etc. where two roles appear to be at cross
purposes to each other, which is a great challenge for HRM in today. According to Patrick &
Kumar (2012), a research done on IT sector of India, training employees to be sensitive and
accept to cross-cultural differences and offering foreign language trainings to increase
inclusiveness, is a challenge for HRM as it pushes HRM more for a cost center inside the
company. Especially in Multinational companies practicing mindful of ‘Think Global, Act
Local’ approach in order to motivate highly qualified culturally diverse professional and assure
foreign professionals are not a threat for career advancement of local professionals is a great
challenge of HRM. At last according to SHRM (2007), author would suggest for HRM to
practice culturally relative perspective (Let's take the best variety of ways) rather than
ethnocentric view (our way is the best) in the business context to manage diversity in an effective
manner.

2.7 Digital Revolution

The world has changed in cultural, societal and economical sectors due to digital technological
changes. Those changes play a role in employees’ lives and HRM. According to Ashbaugh and
Miranda (2002), in this digital age, HRM has transferred as E- HRM, as companies have to be
adopted for the digital technological changes in recruit to retire functions, to be success.
Evolution of HRM in according to technology changes is given below.

8
Figure 1 - Evolution of HRM with Technological Changes
[ CITATION Flo15 \l 2057 ]

Stage Functions Example


Paper-Based Systems/Legacy HR was the sole custodian of In earlier time HR manager
mainframe systems the data. send employees to HR
department to get their all
Reporting was very their needed personnel
rudimentary information noted down by a
HR officer.
Personal Computer (PC) HR data were stored on a In Hemas Ltd. earlier time all
Technology and local area client server which is HR the information on HRM
network (LAN) systems network. practices are entered in to a
PC and stored there.
Able to produce reports that
simply listed employee
information.
Electronic Database Systems Emergence of relational Singer HR department was
database that stored a piece of able to generate employee
data in more than one file, report could from different
with different types of data. databases that included name,
address, and salary and
Develop more complex benefit information.
reports that integrated several
data elements.

Enterprise-wide system was

9
initiated (SAP) which
interrelate HR functions with
all other departments.

E-HRM has begun.


Web-Based Technology Interactive voice response Omega Line Ltd. HR
(IVR) department used to get basic
information needed from
To interact with databases to candidates for the recruitment
get information or enter data process via website
into it a touch-tone phone is information forms.
used.

Web-based applications

Applications that use a Web


browser as a user interface
(Ashbaugh and Miranda, 2002)

Along with the technological development most of the functions in HRM was digitalized & some
of the main functions that were digitalized are discussed below.

Table 2 - Digitalization of HRM Funcations in 21st Century

Function Technology Tools Process


Employee recruitment, E-recruitment web portals Post available job positions
selection and placement. and qualifications in web
Social Media Sites portals and job seekers select
(Facebook, LinkedIn) their expertise and apply.
Employee Development E-learning Employees are able to
increase their skills through
Career Development Online e-learning as they are
provided with necessary
Appraisal System (e- inputs for career growth and
performance) feedback on their
performance via E-learning.
Compensation E-compensation, Determine the cost to
company for the
Compensation settlements compensation plan awarded
to employee and employee
Flexi-reward Packages can determine the pay he will
get in hand via e-
compensation system they

10
have lounged.
Employee Relations, Intranet OD exercises help in bringing
Communication and Work Team Development organizational change and
Environment effective team development
and build better employer
employee relations.
Decision Making Decision Support System DSS Technology tool used to
(DSS) get HR decision enable for
taking quick business
Artificial Intelligence (AI) decisions as it summarize
System large amount of data with
speed to a useful result.
Online Analytical Process
(OLAP)

Group Decision Support


System(GDSS)
Human Resource Information Intranet availability of Data All the information on
System (HRIS) record of  Employees company portals, employee
portals, company policies,
employee feedback etc. of
Google.com is available in
company intranet.
(Beer, 1997)

It can be analyzed that with the concept of E-HRM, all the HRM data are mainly stored and
handles via technological systems. According to a research done in China on E-HRM by
Shrivatsava and Shaw (2003), it is a challenge for HRM, with the advance of technology,
security of the data privacy also has to be advanced. HRM will have to lounge security systems,
prevent privacy breaches and provide trainings for employees on data securing, which will cost
high and time consumable and it will directly impact on company profits.

According to a web based survey 136 US and Canadian on E-HRM by Tansley and Watson
(2000) stated that with rapid technological changes in according to remain competitive
advantage, companies will have to adopt for the technological changes. Therefore companies
will have to lounge new digital systems with the trend. It is required to provide trainings for
employees which will be a cost for the company that have to be bared anyhow.

11
According to Ulrich (1997) a research done on Motorola in Russia he has stated that, changes in
technology can result in anxiety and resistance among employees. Most of the roles of
employees are replaced by a machine or computer which is cheaper and fast, but this enables
lack of trust on employees towards the company and de-motivated. It is a challenge for HRM for
assure employees of their worth and meaningful place within the business and by help to see the
technology as an aid not a hindrance to their work.

3.0 Critical Evaluation

HRM is frequently challenged by the Globalisation is 21 st century. Due to Globalisation every


nook & the corner of the world is inter connected. Hence one practice or a trend in one place of
the world is easily getting circulated among all around the world. These trends create very
challenging environment for HRM as they are required to handle various demands of diversified
workforce[ CITATION Saa01 \l 2057 ]. Development of the society is something that we cannot
restricted, hence the real challenge faced by HR professionals in 21st century is moving forward
with these developments.
Times to time various generations are passing & between every generation there will be certain
differences in thinking pattern, attitude, expectation & behavior which are called as generation
gap. These changes in generations within the workforce are something that HR professionals
should be very concern as the workforce of an organisation includes employees from every
generation. Hence HR professionals of the organisations should be able to fulfill the demands of
every generation by the same HR policy without discriminating or humiliating employees of any
age range.

Earlier the life patterns of the people were less complicated & relatively people have less
expectation but with the recent trends in 21 st century the life style of the people has become
complicated. I order to fulfill needs of this complicated life now employees prefer more
flexibility from their workplace. Since employees are now more focused on their personal &
social life HR professionals in 21st century is in a critical situation to provide work life balance to
employees to minimize the disturbance to their personal lives through the employment. Aligning
their policies to the changing demands of the employees most of the organisations are now

12
offering flexi or semi-flexi working hours & roster based working schedules for their employees
to enable them to manage their personal lives as well[ CITATION Hym00 \l 2057 ].

Further migration of skilled & knowledge workers is the most common challenge in the HRM
today. Especially in developing countries like Sri Lanka this trend can be seen very commonly.
Most of the time when employees reach a specific level in their career with necessary academic
qualification they are more oriented towards migrating to a better country. This has created a
huge gap in organisations in their skilled employees. The other most challenging area for the HR
professionals today is the digital evolution[ CITATION Mon05 \l 2057 ]. Now most of the
manual functions in every industry are being replaced by technological functions such as
artificial intelligence & robotic technology. This has replaced the routine job of many
employees. Further the demand to implement latest Human resource management platforms are
another challenge faced by the HR professionals. In general when the business environment of
the 21st Century is considered the willingness the change can be described as the key to success
for every industry as the Globalisation challenges the current environment everyday which
compelled the environment to change.

4.0 Self - Reflection

Author of this study were benefitted in many aspects to enhance the academic knowledge related
to the recent changes in HRM through this study. Further I realized that the HR department is not
only a cost center, it should be a profit center. The often challenge for the HRM in 21 st Century is
moving ahead with the change at a minimum cost. Through this study I enhanced my knowledge
on the Impact of the Globalisation to the functions of the business environment & also to the
functions of an organisation. Globalisation is something that we cannot control or restrict & it is
something that we should adopt. Further I learnt that the Globalisation should not be considered
as a challenge, instead we should consider the Globalisation as an opportunity to grown. In the
positive view Globalisation provides many opportunities for the businesses such as adopting the
international standards, benefit of reaching the global best practices & also it provides the

13
advantage of reaching the new knowledge. Author believe that the business world is entering
into a more challenging era every day & as the Globalisation creates these challenges, the
solutions for these challenges also could be find through the Globalisation.

Realizing the upcoming challenges in HRM is another benefit I earned through this study which
would make me a better HR professional by enhancing my critical thinking abilities.

5.0 Conclusion

Few decades has created a complete transformation in HRM functions from desk work to
computers & artificial intelligence based work. It is not the eras we have passed in HRM, the
coming eras are the most critical fact for the HRM. Since the future cannot be predicted in order
to be succeed HRM should always be ready to welcome the change. Talent management,
acquiring the best skills out of the floating candidates & ensuring the highest efficiency would be
the most common challenges that can be possible for HR professionals for next couple of years.
But along with these challenges the biggest question that is popping up is the methods that HR
professionals are going to use to face these matters. When few past decades in HRM are
evaluated it can be seen clearly that the basic functions of the HRM is still the same but the way
of processing the function has completely changed several times over the period of a time. For
instances recruitment & retention of employees was a basic function of HRM since 19 th Century
& 21st Century as well. But in 19th Century the same was done by looking at the printed
application & t present the same is done through online applications, video call based interviews
& even some employees are hired by simply looking at their LinkedIn profiles. Hence the critical
fact that the HR professionals should be concerned about is the rapid change is essential for the
HRM in 21st Century to be succeeded in HRM functions.

14
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