Environment of hrm

INTERNAL+EXTERNAL

1. Environment of HRM
•Environment of HRM includes all those
factors which have bearing on the
functioning of HR department.
•These forces can be divided in two
categories, i.e. External Forces and
Internal Forces.
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2. Utility of Analyzing the Environment
•To become proactive and not remain reactive to the
environment.
•Reactive strategy are useful in stable and
competition less environment.
•Today’s environment is characterized by intense
competition and change where proactive steps are
vital to survive.
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4. Environmental Forces
External Forces
•Political-Legal
•Technological
•Cultural
•Economic
Internal Forces
•Unions
•Strategy, Task &
Leadership
•Organizational
culture & conflict
•Professional Bodies
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5. Political-Legal Forces
•Plethora of Labour laws related to
employment, working conditions, pay &
wages, and laws related to industrial
disputes.
•Which political party is ruling. Different
parties can have a different outlook.
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6. Economic forces
•Economic growth, industrial production, agriculture,
population, national and per capita income, money
and capital markets, suppliers,competitors,customer
& industrial Labour are the components of economic
environment.
•Economic forces relevant to HR:
Suppliers
Competitors
Customers
Economic growth
Industrial Labour
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7. Technological
•Jobs tend to be more intellect.
•Obligation of HRM to train workers acc. to new
technology and to rehabilitate those who can not
be trained.
•Workers acquaint with new technology are more
demanding.
•Technology has impact on human relations.
•Job holders have become highly professional and
knowledgeable.
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8. Cultural Forces
•Culture refers to complete whole which
includes knowledge, belief, art, morals, laws,
customs, and other capabilities & habits
acquired by an individual as a member of
society.
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9. Strategy, task & leadership
•Alignment between the strategy, structure,
people, and management is important for
organization’s success.
•Nature of task/ job also affects HR in terms of
hiring, compensation, training etc.
•Leader also impact any of function area of
organizations.
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10. Unions
•Unions are considered a part of internal as
well as external force in an organization due
to its affiliation from outside political parties.
•Unions have influence on all HR activities right
from hiring to separation.
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