HRM AND EXTERNAL ENVIRONMENT

HRM and External Environment



HRM and External Environment

Introduction

This paper intends to discuss the external environment in relation with the human resource practices. Human resource practitioners usually need to monitor the external environment in order to deal with the challenges and opportunities faced by the field of human resources. The most important external analysis tool used to assess the environment is PESTEL. The impact of political, economic, social, technological, environmental and legal factors on human resource practices is immense. However, this paper will particularly focus on the political factors in more depth. Explanation of one political change that has affected the human resource practices from each of the last three governments of United Kingdom will be provided. The governments in focus are the government of Conservative from 1979 till 1997, the government of New Labour from 1997 till 2010 and the present coalition government of Conservatives and Liberal Democrats. The purpose of this paper is to make the reader aware about the impact of external environment on the human resources practices.

Discussion

The field of human resource is extremely important from the viewpoint of maintaining employee morale and motivation for the purpose of enhancing the productivity of business thus benefiting the society on the whole. The human resource practitioners need to constantly monitor the external environment because of its impact on the practices of the field. The field of human resource plays a vital role in organizations to increase the job satisfaction and employee morale. Human resource department is essential for enhancing the achievement of business objectives because the human resource department manages the 'people' most important source of competitive advantage of any organization (Burchill & Casey, 1996 Pp. 5-17).

All the practices of human resource are impacted by the factors that are related to the external environment commonly known as the PESTEL factors. The performance of human resource departments is directly related to external factors. For example, political system plays a significant role in assessing the types and skills set available in the labor market along with in creating overall national values and thus shaping the human resource strategies. Political system is usually assumed as a key factor of organizational human resource department practice.

All the factors of external environment impact the decisions of human resource managers of any organization. The changes in government policies regarding employment and labor laws, demographic changes, tax changes, technological advances and amendments in various employment laws are few examples of external environment changes that can impact the working of human resource practices. Political factors remain the most important of all the factors included in PESTEL. Political factors basically are related to the changes in government policies (Bevan & Thompson, 1992 Pp. 5-76).

PESTEL and Human Resource Practices

Human Resource practices are usually impacted by the changes in government policies regarding the employment laws and regulations. For example, the basic educational requirement of the workforce determined by the government usually impacts the human resource strategies in relation with recruitment and ...