Budgetary Conditions in H R Management †Myassignmenthelp.Com

Question: What Is The Budgetary Conditions In Human Resource Management? Answer: Introducation Human resource management is an approach that allows business organisations in ensuring proper management of their workforce and optimise their performance using different functions, such as training and development, performance management, career development, etc. The rising market competition and the spread of globalisation has forced business organisations to rethink about the ways in which they can outperform their competitors. Business organisations are now heavily relying upon their human resources to help them in achieving market competencies because all other resources and processes can be easily replicated. Thus, business organisations are investing billions of dollars every year in the training and development of their human resources (Armstrong Taylor, 2014). Training and development Training and development is one of the most important core functions in human resource management. Training and development are specialised programs that are aimed at increasing the skills and technical competencies of the employees so that they can become competitive and can play a greater role in the achievement of organisational goals and objectives. Training and development is helpful in achieving individual as well as organisational objectives (Jehanzeb Bashir, 2013). This report is aimed at discussing the importance of training and development from a business point of view and how it can have an impact on organisational profitability. The report also discusses some future changes that the company can introduce with respect to its training and development strategies. Company background Abc Company Pvt. Ltd is a multinational company that is based in Australia and has foreign subsidiaries in India, China, Singapore and Vietnam. The company provides technical assistance and solutions to a number of multinational companies that are market leaders in their industries. The company has a total workforce of 115,000 employees who and operates 24/7 to provide technological solutions to its employees. Abc Company Pvt. Ltd. company is operating in a competitive industry as there are a number of established competitors in the market but has been able to penetrate the market by competing with such companies on the basis of cost. To ensure quality services to its client, the company has to ensure that it designs and implements regular training and development programs for its employees. Furthermore, being in international business also makes it imperative for the company to design and implement expatriate programs, which would also require special training programs. The company has been losing its market share because of the decreasing employee performance and competencies. after a thorough analysis, the management has identified that its decreasing focus towards training and development programs has been a prime reason for the decrease in market share. Impact of training and development on organisational profitability Training and development are highly beneficial for the employers as well as for the employees. Though training and development programs might require a lot of investment from an employers point of view but the return on investment is way more than what an employer might be investing in a training or development program. Training and development can have a huge impact on an organisations profitability, directly as well as indirectly. The impact of training and development programs on the profitability of an organisation are discussed below: First of all, and most importantly, training and development programs can have a huge impact on the employee performance levels. Training and development programs can affect behaviour of employees by teaching them new skills and competencies, which can enable them to perform their job roles and duties in a more effective manner and perform better on the overall. With an increase in the employee performance levels, business organisations become more productive and can increase their sales and market competitiveness, which would ultimately have a direct impact on the profitability of a company (Gill, 2014). American Society for Training and Development concluded through one of its research that an organisation that spent $1,575 on an average on employee training and development was able to achieve a 24 percent increase in gross profits while the increase in revenue was estimated at 218 percent (Jehanzeb Bashir, 2013). Secondly, training and development programs can help an organisation in identifying people that have the potential to take up higher positions in the organisational hierarchy. By assessing the competencies of the employees, it can become easier for the organisations to prepare them for the future and strengthen their workforce planning. Efficient workforce planning will also help the company in saving recruitment and selection costs, which it would otherwise have to incur in case it carries out frequent recruitment and selection programs and ultimately help the organisation is becoming more profitable (Chopra, 2015). Thirdly, training and development programs can offer growth opportunities to employees which can have a positive impact on their morale, motivation, job satisfaction, job commitment and organisational commitment level. When employees feel engaged and are more committed to their work, they show less absenteeism and tendency to quit. Business organisations are ultimately able to control their employee turnover rates and retain employees by offering them training and development programs, which ultimately helps them in saving important resources that would otherwise go in vain if employee turnover rates rise. Further, an organisation that offers regular training and development programs and is always ready to invest in employee learning programs is always able to foster a positive image in the market as an employer. Such organisations can easily become employers of choice and attract talented employees to work with them. Thus, training and development programs can increase the profitabi lity of an organisation by increasing employee retention, organisational commitment, attracting talented pool of employees and reducing employee turnover ratios. Fourthly, training and development programs can help business organisations in keeping their employees competitive and making them learn new skills and competencies that they can use in their work. A competitive workforce will always show high engagement in their work and will always be designing innovative products and services that will help their companies in grabbing a greater market share and outperforming their competitors. Thus, training and developing employees can help a business organisation in becoming more profitable because of the ability to offer unique, innovative and higher quality products and services. Lastly, when employees regularly attend training and development programs, they become more competitive and efficient in performing their job duties and responsibilities. They start feeling that their organisations value them and they become more responsible towards the employer as well as towards the environment and the customers. As a result of an increase in the responsibility, the employees tend to make the work operations more lean and avoid unnecessary wastage of resources, which ultimately reduces the operational cost and helps their employer in becoming more profitable (McNamara, n.d.). Budgetary conditions in human resource management A budget is a systematic approach towards the allocation of financial resources to various departments and operations of a business. Allocation of adequate financial resources to various functions and practices is one of the most difficult tasks that human resource managers have to do. In such a competitive business era, some organisations believe that investing too much into human resource management practices is a waste of financial resources whereas some organisations believe that investing into the management of human resources is the best form of investment. Human resource managers have to plan the budget for human resource management in such a way that there is neither a shortage of funds nor there is wastage of precious and limited resources. To ensure optimum allocation of financial resources, human resource managers should try to link the budget of human resource management to the corporate strategy. Linking the two will provide a better view of strategic goals to the managers. There are multiple human resource management practices where an organisation can invest its resources but its important for the human resource managers to allocate the right amount of resources to the right practices and functions so that the important human resource practices can be executed efficiently. Some practices to which the human resource managers should allocate the maximum resources are: Training and development it has been found that investing into employee training and development programs is one of the best ways to become more competitive and profitable. Training and development can have a number of benefits for business organisations and can help in increasing a companys profitability, which has also been discussed above. Therefore, it is important that the budget for training and development is kept relatively higher than all other human resource functions because it can have benefits for the employees as well as for the employers (Duggan, n.d.). Performance incentives Rather than allocating high budgets to miscellaneous activities, human resource managers should allocate more resources to performance incentives that are awarded to the employees for the performance level that they are able to demonstrate in an assessment period. Allocating more budget to performance incentives, benefits and employee welfare activities will allow managers to ensure high engagement and motivation levels amongst the employees, which will ultimately provide a high return on investment to the investors and the stakeholders (Andersen, 2000). Workforce planning workforce planning or succession planning is another area where the human resource managers should consider investing more resources because efficient workforce planning can save a lot of resources due to better supply of human resource personnel to ensure continuous business operations. The other important human resource management practices where the human resource managers can allocate the remaining resources are performance management, career development, compensations, recruitment and selection, employee relations, etc. Change plan for ABC Company Pvt. Ltd ABC Company Pvt. Ltd. has been able to penetrate the market efficiently but its inability to focus on employee training and development programs is resulting in a decrease in the companys market share. The management of the company should start focusing more on employee learning programs and allocate more resources to it so that the employees can become more competitive. An increase in the training and development budget will allow the company to design and implement better employee learning programs at regular intervals, which will have benefits for the employees as well as for the employers. To ensure maximum effectiveness of the training and development programs, the company should also ensure that it is able to identify the right training needs of the employees. The management of ABC Company Pvt. Ltd. can use a performance management system and an employee feedback survey to assess the skills that are lacking in the workforce. By implementing a performance management system, the management can monitor and analyse the performance of individuals, departments and the organisation on the whole, which can be used to identify the areas where they lack efficiencies. Further, the management can also make use of anonymous employee feedback surveys where it can ask its employees multiple questions aimed at gaining knowledge about their training needs. By keeping the surveys anonymous, the management will be able to increase the reliability of the feedback because the employees will not hesitate in providing the right information through an anonymous feedback. Conclusion Training and development is one of the most important core function of human resource management. It can not only have multiple benefits for the employees but can also help the employers in a number of ways. An organisation that fails to design and implement training and development programs for its workforce can never survive the market competition in the long run and will ultimately end up losing its market share to the competitors. Therefore, it is important for ABC Company Pvt. Ltd. to carefully analyse the training and development needs of its workforce and implement employee learning programs that would help the workforce in achieving the lacking skills and competencies. Thus, the company will be able to regain its competitive edge and will also become more profitable and efficient References Armstrong, M. Taylor, S., 2014. Armstrong's Handbook of Human Resource Management Practice. s.l.:Kogan Page Publishers. Jehanzeb, K. Bashir, D. N. A., 2013. Training and Development Program and its Benefits to Employee and Organization: A Conceptual Study. European Journal of Business and Management , 5(2) Gill, A., 2014. The Top 10 Benefits Of Ongoing Staff Training And Development. [Online] Available at: https://www.saxonsgroup.com.au/blog/human-resources/top-10-benefits-of-ongoing-staff-training-development/[Accessed 16 May 2017]. McNamara, C., n.d. Employee Training and Development: Reasons and Benefits. [Online] Available at: https://managementhelp.org/training/basics/reasons-for-training.htm [Accessed 16 May 2017]. Duggan, T., n.d. Importance of a Training Budget in Organizations. [Online] Available at: https://yourbusiness.azcentral.com/importance-training-budget-organizations-1364.html[Accessed 16 May 2017]. Andersen, A., 2000. Best Practices: Developing Budgets. [Online] Available at: https://www.inc.com/articles/2000/01/16379.html[Accessed 16 May 2017]. Chopra, B., 2015. Importance of training and development in an organization. [Online] Available at: https://economictimes.indiatimes.com/small-biz/hr-leadership/people/importance-of-training-and-development-in-an-organization/articleshow/48739569.cms?intenttarget=no [Accessed 16 May 2017].