HRM environment refers to all those factors which effect the performance Human resource management department directly or indirectly.
HRM is affected by many interrelated components. Such components are part of either internal environment of organization or external environment of the organization.
Human Resource Management Environmental (HRM)
There are two types of a dynamic Human Resource Management environment, External Environment and Internal Environment. Control over external environment influences the management of its human resources and internal environment of HRM totally affect the internal matter of business.
Read Also: Functions of HRM
The External Environment of HRM
Components that influence the human resource human resources of a business organization from outside the organization boundaries is refer to as external environmental factors. Following are the external environmental factors that affect business organization.
- Labor Force
A pool of persons external to the organization from which the organization gets its employees is known as a labor force. How well an organization can do its mission is decided to a large extent by the capability of employees of the business organization.
- Legal Considerations
Another important factor influencing human resource management relates to state, federal and local legislation and many decisions of court interpreting this legislation. In addition, human resource management is mainly affected by many presidential executive orders.
- Society
Human resource management is also affected by the society. The business organization must achieve its aim in line with societal norms in order to remain acceptable to general public.
- Unions
A set of workers who are combined together in order to deal collectively with their employer is refer to as union. Although unions keep a potential force, membership of union as a percentage of non-agricultural work forces changed from 33 percent in 1955 to 9.5 percent today.
- Shareholders
The owners of business organization are interested about shareholders. They may at times challenge programs viewed by management to be advantageous to the organization.
- Competition
A business organization must be able to keep a provision of competent employees, in order to grow, succeed and prosper. Other organizations are also strain toward that goal.
- Customers
Management has the duty of guarantee of that its employment practices do not make enemy the members of market it serve.
- Technology
Particular skills are no longer needed as technology changes. This demands the retraining of the existing employees. The kind and amount of technology required is also affected by the trend toward a service economy.
- The Economy
One of main environmental factor influencing human resource management is the economy of the nation. As a generalization, it is mostly more hard to recruit qualified employees when the economy is booming. On the other hand, more applicants are typically available when a downturn is experienced.
Read Also: Future Challenges of HRM
The Internal Environment of HRM
Internal environmental factors refer to components that influence human resources of business organization from inside its boundaries. Following are the internal factors that influence business organization.
- Mission
Mission is the organization’s reason for being or its continuing purpose. Every level of management should function with an obvious understanding of the mission of business organization. In fact, goals should be clearly understood by every organizational unit that coincide with that mission.
- Policies
Policies are defined as a predetermined guide developed to give counseling in decision making. Policies can exert important pressure on how managers achieve their tasks.
- Corporate Culture
Corporate culture is defined as the system of shared beliefs, values and habits inside an organization that interacts with the formal structure to generate behavioral norms.
- Management Style of Upper Managers
It is closely connected to corporate culture is the manner in which preferences and attitudes of one’s superiors influence how a task is performed.
Because of the issues that can consequence if the managerial style of upper-level managers is not similar from that of lower-level managers, this situation deserves special emphasis here.
- Employees
Employees differ in many manners including their attitudes, capabilities, personalities and personal objectives. As a consequence, conduct that a manager observes effective with one employee may not be effective with another.
- Informal Organization
A group of patterns of human interaction and evolving relationships inside an organization that are not prescribed officially refers as the informal organization. Such informal relationships have very potential.
- Other Units of the Organization
Manager must properly understand the interrelationships that is present among departments or divisions and should use such relationships for the effective benefit.
- Labor-Management Agreement
Labor-management agreements are negotiated typically by upper management, but the terms of the agreements must be implemented throughout the organization by managers.
