---HRM Assignmrnt # 9---

In this assignment we are to interview a personnel or human resource manager on his concept on the nature, scope and role of human resource management. Do we agree with him? Explain. Is his concept similar to that of the management of his organization? If not, ask him how the differences are settled.

Upon interviewing HR personnel, we gathered some information’s on her nature and scope of Human Resource Management but still its sufficient to answer the entire questions in this topic. We find hard time in interviewing her about the concept, nature and scope of Human Resource Management for the reasons that she only answers few questions. Let me first define some Nature, Scope and Role of Human Resource Management as a whole.

The nature of Human Resource Management Roles

Human resource management is also in the process of change with regard to the nature of the role performed. In the past many functions were performed by HRM professionals themselves, the role they are taking on, is one of consultant to line management, where line managers perform many of the functions traditionally handled by HRM professionals. Similarly there is a trend in which businesses are shedding all functions that are not directly related to core business, and in the process many HRM functions are being outsourced. Hence the change in the nature of services provided.

The activity of generating unit standards and designing qualifications can be used as an opportunity to catapult HRM practices into the future. To do this, those issues which are going to shape the future for HRM practices (termed transformation and development issues) need to be identified and analysed, especially in relation to current roles that will still be required of HRM practitioners. These issues are central to the activity of generating unit standards (e.g. outsourcing, societal responsibility) and their impact on HRM roles (e.g. staffing, performance management). In addition, supportive roles or functions required by HRM practitioners will also have to be identified in order to complete the HRM practitioners qualifications design package

Human Resource Management - Nature, Scope, Objectives and Function

Human resources may be defined as the total knowledge, skills, creative abilities, talents and aptitudes of an organization's workforce, as well as the values, attitudes, approaches and beliefs of the individuals involved in the affairs of the organization. It is the sum total or aggregate of inherent abilities, acquired knowledge and skills represented by the talents and aptitudes of the persons employed in the organization.

The human resources are multidimensional in nature. From the national point of view, human resources may be defined as the knowledge, skills, creative abilities, talents and aptitudes obtained in the population; whereas from the viewpoint of the individual enterprise, they represent the total of the inherent abilities, acquired knowledge and skills as exemplified in the talents and aptitudes of its employees.

Human Resource Management: Definition

Human Resource Management has come to be recognized as an inherent part of management, which is concerned with the human resources of an organization. Its objective is the maintenance of better human relations in the organization by the development, application and evaluation of policies, procedures and programmes relating to human resources to optimize their contribution towards the realization of organizational objectives.

In other words, HRM is concerned with getting better results with the collaboration of people. It is an integral but distinctive part of management, concerned with people at work and their relationships within the enterprise. HRM helps in attaining maximum individual development, desirable working relationship between employees and employers, employees and employees, and effective modeling of human resources as contrasted with physical resources. It is the recruitment, selection, development, utilization, compensation and motivation of human resources by the organization.

Human Resource Management: Evolution

The early part of the century saw a concern for improved efficiency through careful design of work. During the middle part of the century emphasis shifted to the employee's productivity. Recent decades have focused on increased concern for the quality of working life, total quality management and worker's participation in management. These three phases may be termed as welfare, development and empowerment.

Human Resource Management: Nature

Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. The various features of HRM include:

• It is pervasive in nature as it is present in all enterprises.
• Its focus is on results rather than on rules.
• It tries to help employees develop their potential fully.
• It encourages employees to give their best to the organization.
• It is all about people at work, both as individuals and groups.
• It tries to put people on assigned jobs in order to produce good results.
• It helps an organization meet its goals in the future by providing for competent and well-motivated employees.
• It tries to build and maintain cordial relations between people working at various levels in the organization.
• It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc.

Human Resource Management: Scope

The scope of HRM is very wide:
1. Personnel aspect-This is concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and development, layoff and retrenchment, remuneration, incentives, productivity etc.
2. Welfare aspect-It deals with working conditions and amenities such as canteens, creches, rest and lunch rooms, housing, transport, medical assistance, education, health and safety, recreation facilities, etc.
3. Industrial relations aspect-This covers union-management relations, joint consultation, collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc.

Human Resource Management: Beliefs

The Human Resource Management philosophy is based on the following beliefs:
• Human resource is the most important asset in the organization and can be developed and increased to an unlimited extent.
• A healthy climate with values of openness, enthusiasm, trust, mutuality and collaboration is essential for developing human resource.
• HRM can be planned and monitored in ways that are beneficial both to the individuals and the organization.
• Employees feel committed to their work and the organization, if the organization perpetuates a feeling of belongingness.
• Employees feel highly motivated if the organization provides for satisfaction of their basic and higher level needs.
• Employee commitment is increased with the opportunity to dis¬cover and use one's capabilities and potential in one's work.
• It is every manager's responsibility to ensure the development and utilisation of the capabilities of subordinates.

Human Resource Management: Objectives

• To help the organization reach its goals.
• To ensure effective utilization and maximum development of human resources.
• To ensure respect for human beings. To identify and satisfy the needs of individuals.
• To ensure reconciliation of individual goals with those of the organization.
• To achieve and maintain high morale among employees.
• To provide the organization with well-trained and well-motivated employees.
• To increase to the fullest the employee's job satisfaction and self-actualization.
• To develop and maintain a quality of work life.
• To be ethically and socially responsive to the needs of society.
• To develop overall personality of each employee in its multidimensional aspect.
• To enhance employee's capabilities to perform the present job.
• To equip the employees with precision and clarity in trans¬action of business.
• To inculcate the sense of team spirit, team work and inter-team collaboration.

Human Resource Management: Functions

In order to achieve the above objectives, Human Resource Management undertakes the following activities:
1. Human resource or manpower planning.
2. Recruitment, selection and placement of personnel.
3. Training and development of employees.
4. Appraisal of performance of employees.
5. Taking corrective steps such as transfer from one job to another.
6. Remuneration of employees.
7. Social security and welfare of employees.
8. Setting general and specific management policy for organizational relationship.
9. Collective bargaining, contract negotiation and grievance handling.
10. Staffing the organization.
11. Aiding in the self-development of employees at all levels.
12. Developing and maintaining motivation for workers by providing incentives.
13. Reviewing and auditing man¬power management in the organization
14. Potential Appraisal. Feedback Counseling.
15. Role Analysis for job occupants.
16. Job Rotation.
17. Quality Circle, Organization development and Quality of Working Life.

Human Resource Management: Major Influencing Factors

In the 21st century HRM will be influenced by following factors, which will work as various issues affecting its strategy:
• Size of the workforce.
• Rising employees' expectations
• Drastic changes in the technology as well as Life-style changes.
• Composition of workforce. New skills required.
• Environmental challenges.
• Lean and mean organizations.
• Impact of new economic policy. Political ideology of the Govern¬ment.
• Downsizing and rightsizing of the organizations.
• Culture prevailing in the organization etc.


Sources:
http://expertscolumn.com/content/human-resource-management-nature-scope-objectives-and-function

---MIS Assignment # 9---

We are to identify an information environment of our choice and write an essay to address the following questions:

• What should be our role within this environment?
• How can the principles of information organization and representation help us in performing this role?
• What are our challenges facing in performing the role? How we will address these challenges?


Before identifying environment issues of my choice, let me first discuss the meaning of Information Environment as a whole.

Information Environment

There is now a critical mass of digital information resources that can be used to support researchers, learners, teachers and administrators in their work and study. The production of information is on the increase and ways to deal with this effectively are required. There is the need to ensure that quality information isn’t lost amongst the masses of digital data created everyday. If we can continue to improve the management, interrogation and serving of ‘quality’ information there is huge potential to enhance knowledge creation across learning and research communities. The aim of the Information Environment is to help provide convenient access to resources for research and learning through the use of resource discovery and resource management tools and the development of better services and practice. The Information Environment aims to allow discovery, access and use of resources for research and learning irrespective of their location.

We as human beings have grown accustomed to using up nonrenewable resources. I feel the role of humans is to first acknowledge our mistakes and then go about changing our behavior. This means trying to recycle, use renewable energy, not littering, using public transportation, buying products from green companies so that economically it is more profitable to conserve than waste, calling our congressman, etc. In short we must accept that we are wrong in thinking that it is someone else's problem. Look up on the inter net how you can help and do it. Make good habits in conservation, learn all you can and share with others what you have learned. You and I are the problem and unless we change, our environment could reach a critical threshold that takes thousands of years to fix. I am an environmental scientists and I know what could happen.

It is always like that ,those living in Paradise have no idea of what they got. I call them Pigs in Paradise

In civilized countries people love the Environment and many people are trying to return to it ,with gardens ,parks or doing some horticulture on free holds ,also many people are buying farms together with some friends and are returning to a healthy country way of life ,usually working for far less money ,but aiming for a better quality of life. So the attitudes are probably opposite of what one would think .

I’m very close to nature ,living in the jungle and with a tremendous knowledge of plants and animals ,but their forefathers were much more involved, Christianity is weaning people away from their roots ,and the difference is great when one compares converted native people to those who are still living the traditional way

As far as mental effects are concerned ,country people are more relaxed and time has a different meaning ,they tend to think in days instead of in minutes and are definitely more polite ,gracious and hospitable ,appreciating when people visit as opposed to people from the cities. They further one goes into the sticks the more polite people become and the more respectful they are of others and their surroundings.

Many are said to be the issues in our environment today, and its a massive problem which every country crucially facing nowadays. Two of these are the issue of nuclear energy in the environment and the most rampant Global Warming. I have to discuss these two major problems in our environment for it is widely spread in the entire globe. This are the meaning and my thoughts about the said matter:

Nuclear Energy:

Nuclear Energy and the Environment In our society, nuclear energy has become one of the most criticized forms of energy by the environmentalists. Thus, a look at nuclear energy and the environment and its impact on economic growth. Lewis Munford, an analyst, once wrote, Too much energy is as fatal as too little, hence the regulation of energy input and output not its unlimited expansion, is in fact one of the main laws of life. This is true when dealing with nuclear power. Because our societies structure and processes both depend upon energy, man is searching for the most efficient and cheapest form of energy that can be used on a long term basis. And because we equate power with growth, the more energy that a country uses, - the greater their expected economic growth. The problem is that energy is considered to have two facets or parts: it is a major source of man-made repercussions as well as being the basis of life support systems. Therefore, we are between two sections in which one is the section of resource availability and waste, and the other the continuity of life support systems pertinent to survival.

Thus, the environmentalists believe that nuclear energy should not be used for various reasons. First of all, the waste product, i.e. plutonium, is extremely radioactive, which may cause the people who are working or living in or around the area of storage or use, to acquire leukemia and other cancers. They also show how billions of dollars are spent yearly on safety devices for a single reactor, and this still doesn't ensure the impossibility of a melt down. Two examples were then given of Chernobyl and Three Mile Island, in 1979, when thousands of people were killed and incapacitated. Finally, the environmentalists claim that if society wastes less energy, and develops the means to use the energy more efficiency, then there would be a definite decrease in the requirement for more energy producing plants. On the other hand, some business men and economists say that the present conditions should be kept intact, as the other forms of energy, e.g. oil, natural gas and coal, are only temporary, in dealing with surplus, and give off more pollution with less economic growth.

Concurrently, countries wanted a more reliable, smokeless form of energy not controlled by OPEC, and very little uranium was required to produce such a high amount of resultant energy. Lastly, they said that renewable energy is (a) unreliable in that the wind, for example, could not be depended upon to blow, nor the sun to shine, and (b) were intermittent in that a 1,000 mega-watt solar farm may occupy about 5,000 acres of land, compared with less than 150 acres of land for a similar capacity nuclear power generation station. Because the energy technology that society employs directly influences the quantity and quality of life, the energy option that is chosen should have the greatest cost- benefit effectiveness as well as maximizing flexibility and purchases. However, those who believe in continuous energy consumption growth, seem to forget that there is only a limited supply of energy in every energy system, and to overdo any resource may provide for an unacceptable impact upon global and regional ecology.

Thus, if the business world pushes the environment as far as it can go, Ceribus Paribus, please refer to figure 1. Thus, to use petroleum as a substitute for uranium, which is needed to power the nuclear system, would not be economically or environmentally sensible. I say this because, first of all, there is a major supply of uranium considering it was one of the last energy sources to be found as well as only a small amount of it is required to produce a lot of energy. Secondly, petroleum gives off carbon monoxide which is one of the reasons for ozone depletion; whereas, the uranium does not give off pollution except that it produces plutonium which needs to be buried for more than fifty years to get rid of its radiation. Finally, because so much of the petroleum will be required to power the vast area that nuclear energy can cover, the cost to us as the consumer would be massive! This would mean slower economic growth and/or expansion, especially when compared to nuclear energy.

Global Warming:

Global Warming The beginning of the Industrial Revolution brought many new, exciting inventions into our lives to simplify our lives and made them more efficient. Such inventions included cars, household appliances and plants that burn solid waste, fossil fuels such as oil, natural gas, and coal, and wood and wood products for fuel. Before the Industrial Revolution, human activities caused very few gases to be released into the atmosphere, but now scientists say, through the burning of fossil fuels, a large population growth and deforestation, humans are affecting the mixture of gases in the atmosphere. This mixture of gases in the atmosphere is causing the worldwide problem known as Global Warming. According to the United States Environmental Protection Agency, the earth has a natural “greenhouse effect” which is caused by energy from the sun controlling the earth’s weather and climate, and heats the earth’s surface.

In response to the sun, the earth radiates energy back into space. Atmospheric greenhouse gases such as water vapor, carbon dioxide, and other gases, trap the energy leaving the earth and retaining it as heat, much like a greenhouse ceiling. This is a natural and necessary effect, without it temperatures on earth would be much lower than they are now and life as it is today would not be possible, but with the greenhouse effect the earth’s average temperature is a more comfortable and life-supporting 60 degrees Fahrenheit. The problems that have arisen with the greenhouse effect have occurred due to the increase in atmospheric greenhouse gases.

Some major issues in the Environment:

At the very heart of these obstacles are several factors and events that reflect future environmental challenges:

• Some oil companies and the World Wildlife Fund agree to prohibit World Heritage site exploration
• The abundance and appeal of heavy oil resources in Canada and Venezuela and a new focus on producing those resources have collided with greenhouse gas commitments and waste disposal issues
• Aggressive “environmental liability management” has become the norm for major companies in dealing with legacy issues and in avoiding future liabilities
• The need to accurately measure and manage greenhouse gas emissions data for purposes of future internal and external trading is driving a U.S./industry push for “standardization” of management techniques
• Even as the consequences of global warming are becoming clearer - climate change impacts already recognized in the Arctic, with measurable disruptions to Aboriginal lifestyles, wildlife, existing communities, and industrial development —the exact causes are still debated, and in turn uneven global approaches have created unique business challenges
• There is a dire need to mitigate the worldwide loss of fisheries and underwater habitats due to overexploitation and collateral damage
• Activities in the Norwegian sector of the North Sea demonstrate the technical and cost benefits of oil company collaboration in addressing environmental research, and developing an environmental management strategy
The environmental challenges facing industrial companies and governments throughout the world are numerous and complex. Most governments and industrial companies now clearly realize and embrace the paradigm that environmental issues are intertwined with social/ cultural and socioeconomic issues. In fact, social and cultural concerns may far outweigh all other factors as industry and government make critical decisions regarding environmental issues.

Governmental Concerns

Promoting economic growth with environmental and human health safeguards in place seems to be the path forward for most governments. Decades of environmental mismanagement have created severe legacy issues throughout the developed and developing world. At the crux of this challenge are the current energy policies: economic growth demands energy and the choices for government – e.g., fossil fuel-based energy, renewable energy sources, and hybrid systems – drive related environmental management strategies.
The two huge tasks facing governments are: (1.) determining how to clean up legacy problems, restore natural resources, and achieve human health protection; and (2.) designing strategies to allow for future growth, while protecting the environment, maintaining biodiversity, safeguarding human health, and preserving cultural/ social values. This results in a very complex decision network for governments with varied experiences. A regulatory framework that leverages good science yet is targeted at supporting each country’s social and cultural values is an essential ingredient.

The study suggests that some environmental campaigning currently operates inadvertently to exacerbate these unhelpful aspects of identity. It also points to ways in which environmental organisations could begin to work in order to activate more helpful aspects of identity. Finally, it highlights new opportunities for collaborations across diverse civil society organisations to begin to address fundamental barriers to delivery on a range of concerns - from biodiversity loss to poverty alleviation, and racism to animal welfare abuses.

“Never have environmental problems appeared so insuperable. Whatever the past victories of the environment movement, we need a new and deeper approach - one that begins to engage the human values and identities that lie at the heart of environmental challenges. Meeting Environmental Challenges: The Role of Human Identity does not flinch in insisting on both the possibility and the absolute necessity of working in this way. As such, it makes a clear and important contribution to a realistic response to today’s environmental crisis.”

Basic Principles on the Environment

1.Overall Policy

Give serious consideration to the impact on the environment in every aspect of corporate activities, including R&D, production, distribution, marketing, procurement and clerical works, and make the best efforts to conserve and improve the environment.

• (1) Consider the global environmental issues including nature, ecological system and resources for all business activities based on “Think globally, act locally”, and act actively for environmental protection starting around ourselves.
• (2) Review impacts on the environment and effects of measures of all the corporate activities such as research & development, production, distribution, sales, procurement, and clerical work all the time, and take necessary measures to cope with a situation flexibly and appropriately.
• (3) Regarding business activities abroad, not only comply with regulations in the country, but also promote measures contributing to keep the environment preferable voluntarily in accordance with condition of nature and society in the country.
• (4) Timely prepare corporate organization related to environmental issues and related regulations including handling the global environmental issues.

2.Efficient Utilization of Resources and Minimization of Waste

Conserve energy and other resources, and actively pursue waste minimization and resource recycling.
• (1) Minimize industrial waste and maximize recycling by focusing on production activity.
• (2) Promote to introduce a system including transportation and inventory control, which is more energy efficient and produce less waste, by focusing on distribution activity.
• (3) Actively promote reduction of energy and waste as well as recycling in office operation.

3.Assessment of Environmental Impact from Products and Manufacturing Processes

When developing new products and processes, evaluate the impact on the environment in advance, during development, and periodically after commercialization. Consider the entire business cycle from procurement of raw materials and supplies through the use and the final disposal of products to reduce the impact on the global environment.
• (1) Regarding our products, introduce a viewpoint of environmental protection in design idea of their development, and reduce impacts on and loads to the environment in a whole life cycle of the products from research & development at an early stage to manufacturing, distribution, use, consumption, and final disposal.
• (2) Regarding manufacturing processes, design to reduce environmental loads and energy consumption from a stage of research & development.
• (3) Minimize impacts on the environment, safety and health of handling substances.

4.Development and Utilization of Environmental Technologies

Develop technologies for environmental protection and improvement, and actively pursue outside technologies when it is beneficial.
• (1) Promote to develop efficient technologies for preventing environment pollution.
• (2) Develop alternative technologies not to use substances which pollute the environment.
• (3) Actively obtain, keep in correct order, and use information on environmental technologies.

5.Response to Emergencies

When an adverse effect on the environment is foreseen, exercise the best possible contingent efforts to eliminate or minimize such adverse impact.
• (1) Make efforts to prevent its occurrence in order not to give serious impacts on the environment.
• (2) While sending information to those who are related appropriately, make maximum efforts to minimize environmental impacts in emergency where adverse effects are given or likely to be given on the environment.

6.Clear Definition of Accountability and Responsibility

Appoint executives and managers in charge of environment-related activities and clearly define their authority.
• (1) Appoint an executive who is responsible for corporate environmental issues.
• (2) Assign a responsible person for the environment at business sections and work places.

7.Cooperation with the Community and Society at Large

Actively cooperate with the environmental efforts of local communities and provide fair and unbiased information.
• (1) Make our work places be green in a planned manner by planting, and cooperate in making surrounding areas greener.
• (2) Actively participate activities of implementation of environment protection and recycling activity such as creating comfortable environment in the area as a member of the area.
• (3) Make efforts to provide appropriate information to consumers, residents in the area, industry organizations, administration, and others.

8.Education and Training

Educate and train each employee to understand and realize the importance of environmental issues and to act accordingly in his or her daily routine.
• (1) Request that the employees improve understanding and awareness for local and global environmental protection as well as conservation of resources and energy.
• (2) Promote voluntary educational activity regarding environment protection in all departments of the business activity.



Sources:
http://www.jisc.ac.uk/whatwedo/themes/informationenvironment.aspxSources:
http://www.takeda.com/csr/policies/article_1007.html
http://www.battelle.org/Environment/publications/envupdates/Fall2003/article6.stm

---HRM Assignment # 10---

Various definition of Personnel Management and Human Resource Management

Personnel Management

1) The function of a personnel manager usually begins with the staffing process. The manager may be focused on screening and interviewing applicants, with an eye to placing individuals with the right skill sets in the right position within the company. Along with placement, the HR manager may also oversee, or at least be involved in, the creation of entry level training programs, as well as continuing education opportunities for existing employees.

Determining company policies and procedures as they relate to personnel is another important aspect of the personnel management process. HR functions often include drafting vacation, sick leave, and bereavement policies that apply to all employees. The personnel management team is also often responsible for managing any healthcare program provided to the employees as well.

One aspect of company organization that needs the input of effective personnel management is the drafting of a company handbook. Establishing operation policies and procedures, requirements for employment, commendation and disciplinary procedures, and even something as simple as a dress code has to be compared with state and federal guidelines before the handbook is ready for release to the company at large. Personnel managers and the HR staff are ideal for drafting and reviewing the company handbook.

http://www.wisegeek.com/what-is-personnel-management.htm

2) Personnel management is concerned with the effective use of the skills of people. They may be salespeople in a store, clerks in an office, operators in a factory, or technicians in a research laboratory. In a business, personnel management starts with the recruiting and hiring of qualified people and continues with directing and encouraging their growth as they encounter problems and tensions that arise in working toward established goals.

In addition to recruiting and hiring, some of the responsibilities of a personnel manager are:

1. To classify jobs and prepare wage and salary scales.

2. To counsel employees.

3. To deal with disciplinary problems.

4. To negotiate with labor unions and service union contracts.

5. To develop safety standards and practices.

6. To manage benefit programs, such as group insurance, health, and retirement plans.

7. To provide for periodic reviews of the performance of each individual employee, and for recognition of his or her strengths and needs for further development.

8. To assist individuals in their efforts to develop and qualify for more advanced jobs.

9. To plan and supervise training programs.

10. To keep abreast of developments in personnel management.

http://www.zeromillion.com/business/personnel/personnel-mangement.html

3) Administrative discipline of hiring and developing employees so that they become more valuable to the organization. It includes (1) conducting job analyses, (2) planning personnel needs, and recruitment, (3) selecting the right people for the job, (4) orienting and training, (5) determining and managing wages and salaries, (6) providing benefits and incentives, (7) appraising performance, (8) resolving disputes, (9) communicating with all employees at all levels.

http://www.businessdictionary.com/definition/personnel-management.html

4) The part of management that is concerned with people and their relationships at work. Personnel management is the responsibility of all those who manage people, as well as a description of the work of specialists. Personnel managers advise on, formulate, and implement personnel policies such as recruitment, conditions of employment, performance appraisal, training, industrial relations, and health and safety. There are various models of personnel management, of which human resource management is the most recent.

http://dictionary.bnet.com/definition/Personnel+Management.html

5) Within organizations that employ people, this is the function with policy responsibility for the selection and recruitment of staff, training, performance assessment, career development, disciplinary proceedings, pre-retirement advisory work, equal opportunities policies, pay bargaining, and industrial relations. In small organizations these functions may be combined with other management responsibilities; in large organizations a substantial separate department may be involved in setting policy, its implementation, and in keeping up to date with developments in labour law. In recent years the newer alternative term 'human resource management' has come into use, reflecting the increased importance of this function in labour-intensive service-sector industries.

http://wiki.answers.com/Q/Definition_of_personnel_management

Human Resource Management

1) Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. In simple sense, HRM means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

http://en.wikipedia.org/wiki/Human_resource_management

2) The Human Resources Management (HRM) by: Assembled by Carter McNamara, MBA, PhD -function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have -- and are aware of -- personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.

http://managementhelp.org/hr_mgmnt/hr_mgmnt.htm

3) Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

http://humanresources.about.com/od/glossaryh/f/hr_management.htm

4) "Human resource management is responsible for how people are treated in organizations. It is responsible for bringing people into the organization, helping them perform their work, compensating them for their labors, and solving problems that arise" (Cherrington, 1995, p. 5). There are seven management functions of a human resources (HR) department that will be specifically addressed: staffing, performance appraisals, compensation and benefits, training and development, employee and labor relations, safety and health, and human resource research.

http://www.answers.com/topic/human-resource-management

5) Human Resource Management Systems, also called Human Resource modules, is a link between Human resource management and information technology. A Human resource management system provides a single, accurate view of all human resource activities including recruiting, performance management, training and development and also compensation. Human resource management systems reduce the workload of the human resource department as well as increasing the efficiency of the department by standardizing human resource process. Human resource department plays an important role in the smooth running of the company by tracking and analyzing the time keeping and work patterns of the workforce.

http://jobfunctions.bnet.com/abstract.aspx?docid=1089745&tag=content;col1

---HRM Assignment # 8---

On the assumption that we heard/read the SONA of the President last month (July 2009), we are to identify at least 3 areas related to Human Resource Mangement and explain how these areas can improve our quality of life.

1) Key Reforms

“Towards that vision, we made key reforms. Our economic plan centers on putting people first. Higit sa lahat, ang layunin ng ating mga patakaran ay tulungan ang masisipag na karaniwang Pilipino. (applause) New tax revenues were put in place to help pay for better healthcare, more roads, and a strong education system. Housing policies were designed to lift up our poorer citizens so they can live and raise a family with dignity. Ang ating mga puhunan sa agrikultura ay naglalayong kilalanin ang ating mga magsasaka bilang backbone ng ating bansa, (applause) at bigyan sila ng mga modernong kagamitan to feed our nation and feed their own family.”

Government Owned and Controlled Corporations Reform (GOCC)

After discussions and consultations, the Consulting Team, ADB, and DOF agreed to bring down to four (4) the initial six (6) pilot GOCCs. The key criteria for the selection of the four pilot GOCCs are, a) GOCCa??s importance to the sector, b) impact on fiscal position of the government , e.g extent of dependence on the national budget,c) broad sector coverage, possibility of quick gains from reforms, visibility of GOCCs, and willingness of the GOCC management to undertake reforms. The 4 pilot GOCCs identified are: Home Guaranty Corporation (HGC), National Development Company (NDC), Light Rail Transit Authority (LRTA) and Philippine National Railways (PNR). The proposed policy and GOCC specific reforms that will enable the 4 pilot GOCCs to operate more efficiently.

2) Infrastructures

“Compared to the past we have built more and better infrastructure, including those started by others but left unfinished. The Subic-Clark-Tarlac Expressway is a prime example of building better roads. (applause) It creates wealth as the flagship of the Subic-Clark corridor.

We have built airports of international standard, upgraded domestic airports, built seaports and the RORO system. I ask Congress for a Philippine Transport Security Authority Law.”

Philippines to spend 28 billion dollars on infrastructure projects

MANILA, April 27, 2006 (AFP) - The Philippines plans to spend 1.5 trillion pesos (28 billion dollars) on major infrastructure projects over the next five years, seen as a hindrance to investments, the government said Thursday.

It plans to finance 56 percent of the costs and rely on the private sector for the balance of funds required for the projects.

About 743 billion pesos worth of transportation projects lead the list, the economic planning department said in a statement.

The rest would be spent on the power sector, water utilities, communications and social infrastructure.

Infrastructure spending would account for about four percent of the country's total gross domestic product for 2006-201O, the statement added.

"Infrastructure plays a crucial role in boosting economic growth and reducing poverty. Substantial investment is needed to create new infrastructure and maintain or improve existing ones," Economic Planning Secretary Romulo Neri said.

Kuwait firms plan $10 bln Philippines investments

KUWAIT, Jan 15 (Reuters) - Kuwaiti firms including logistics provider Agility plan to invest more than $10 billion in infrastructure projects in the Philippines, the company leading the group said on Tuesday.

The firms and one non-Kuwaiti company plan to develop airports, ports, railways, power stations and telecommunications, Kuwait investment firm Al-Abraj Holding Co said in a statement.

The deal is pending a signing with the Philippine government expected at the World Economic Forum in Davos, Switzerland, later this month, Abraj Deputy Chairman Sameer Nasser Ali Hussein told Reuters.

The Philippines government has said it wants to invest 1.7 trillion pesos ($41 billion) in its power, water, telecommunications and transport industries by 2010. Last year, it offered 10 infrastructure projects worth $2 billion to foreign investors.

LUCRATIVE

Gulf Arab states and companies, buoyed by record oil prices, have been looking to invest more in Asia, where economies are growing faster than in Europe and the United States, traditional destinations for their surplus funds.

Qatar's $60 billion sovereign wealth fund, the Qatar Investment Authority, said last month it plans to spend at least $850 million in Indonesia, its biggest commitment to the country. [ID:nL06717821]

Kuwait's Abraj said the group would set up a holding company in Europe, of which the Kuwaiti partners would own 75 percent and British firm Argon, acting on behalf of Philippine authorities, 25 percent. This could change a little, Hussein said.

He said Abraj wanted to raise the money possibly through an initial public offering, while Philippine institutions would also contribute to the project.

Kuwaiti partners include International Leasing & Investment and al-Mal Investment Co , Abraj said.

Agility said negotiations were continuing. "A big part of this project would come to Agility," Hussein said.

The biggest investment from the Middle East in the Philippines is a 40 percent stake held by state-owned Saudi Aramco in Petron Corp , the largest oil refiner in the country.

3) Microfinance

“Nakinabang ang pitong milyong entrepreneurs sa P165 billion in microfinance loans.

Nakinabang ang sandaan libo sa emergency employment ng ating economic resiliency plan. Kasama natin ngayon ang isa sa kanila, si Gigi Gabiola. (applause) Dating household service worker sa Dubai, ngayon siya ay nagtatrabaho sa DOLE. Good luck, Gigi”

• The Government of the Philippines took a decidedly pro-microfinance stance ten years ago. How has the sector evolved in relation to your expectations at that time? Do you feel that the 1997 National Strategy is still valid today?

About ten years ago, the vision to have a viable and sustainable private microfinancial market was espoused through the creation of the National Strategy for Microfinance. The main objective of this strategy is to provide low income households and microenterprises access to financial services.
I am happy to report we have made significant progress since then. Through the National Strategy for Microfinance, a policy framework was created and several laws and issuances were passed to ascertain that the private sector will have a greater role in the provision of financial services and that the Government will focus on the creation of an enabling policy environment. It is evident that these policy principles are being adopted. At present, more and more private microfinance institutions are providing this much needed service while the Government rationalized its directed credit programs and established a microfinance-friendly policy and regulatory environment. The strategy is definitely still the guiding principle of the development of the sector in the Philippines.

• What are the salient features of microfinance in the Philippines? What are the main challenges facing the microfinance sector in the Philippines today?
I would say that one of the most salient features of microfinance in the Philippines is that there is a microfinance-friendly environment in which microfinance institutions operate, whether Bank, Non-Governmental Organization (NGO) or Cooperative.

In the Philippines, the necessary infrastructure is in place for these microfinance institutions to flourish in a sound and sustainable way. Aside from the National Strategy, we have a regulatory framework and a uniform set of performance standards that cut across all types of microfinance institutions.
The development of microfinance in the banking sector is also one of the encouraging features of microfinance in the Philippines. The Bangko Sentral NG Pilipinas (Philippine Central Bank / BSP) has taken proactive measures in institutionalizing microfinance within the banking sector through the creation of an enabling policy environment, capacity building, as well as promotion and advocacy. We now have, in the BSP, a Microfinance Committee, a Microfinance Unit and a core group of examiners specialized in microfinance operations of Banks. These initiatives have borne much fruit as the number of Banks with microfinance operations has increased by 300%.

Because of the increased interest in microfinance and the ever-growing number of microfinance institutions, the main challenges lie in assuring that the operations maintain a good level of performance standards. At the end of the day, only sound and viable institutions can provide quality and timely services to the entrepreneurial poor, the microfinance clients.
Another challenge is the need for a comprehensive credit bureau. Again, because of the increased number of players in the field, credit pollution and multiple borrowings need to be addressed through the proper reporting and sharing of credit information.

Microfinance Focus August 31, 2009: Grameen Foundation on Monday announced it has facilitated the first privately placed corporate note issued by the Center for Agricultural and Rural Development, Inc. (CARD) of the Philippines.
The $10.4 million transaction, which was supported by a $5 million guarantee from Grameen Foundation’s Growth Guarantee program and related advisory support, was oversubscribed by six local Filipino institutional investors: Security Bank Corporation, Allied Banking Corporation, Banco de Oro Unibank, Inc., BDO Leasing and Finance, Inc., BDO Private Bank, Inc., and Rizal Commercial Banking Corporation. SB Capital Inc, the investment banking subsidiary of Security Bank Corporation, served as the lead arranger for the notes issuance.

The five-year note is the first ever to be issued by a microfinance institution (MFI) in Southeast and East Asia, and marks an important milestone in opening up broader capital markets to MFIs in the Philippines.
This is Grameen Foundation’s third and largest Growth Guarantee transaction with CARD and will provide it with long-term financing to expand its outreach by an additional 100,000 poor families. The first two transactions, totaling $5.3 million in bank financing, were partially secured by guarantees of $1 million each through the program.

“In the current economic climate, when banks and investors are generally more risk averse than they were previously, this transaction sends a strong message about investor confidence in quality MFIs such as CARD, as well as in the broader microfinance industry,” said Alex Counts, president of Grameen Foundation.
CARD is one of the first Grameen replication programs in the world and is the largest MFI in the Philippines. Formed in 1986, it targets primarily low-income landless rural women and serves over 435,740 clients throughout the Philippines. It is part of CARD Mutually Reinforcing Institutions, a family of organizations which focus on providing financial and non-financial services to poor Filipino women.
“This transaction is a watershed moment for CARD, as well as for the microfinance sectors in Southeast and East Asia,” said Dr. Jaime Aristotle B. Alip, founder and managing director of CARD.

4) Cheaper Medicine

“Mula pa noong 2001, nanawagan na tayo ng mas murang gamot. Nagbebenta tayo ng gamot na kalahating presyo sa libu-libong Botika ng Bayan at Botika ng Barangay sa maraming dako ng bansa. Our efforts prodded the pharmaceutical companies to come up with low-cost generics and brands like RiteMed. I supported the tough version of the House of the Cheaper Medicine law (applause) over the weak version of my critics. (applause) The result: the drug companies volunteered to bring down drug prices, slashing by half the prices of 16 drugs. Thank you, Congressmen Cua, Alvarez, Biron and Locsin.“

For the first time, half-priced essential medicines, universal health insurance coverage and lower rental rates for residential units are now being enjoyed by ordinary Filipinos under the government's social services program for the poor and the vulnerable sector of society.

In her last State-of-the-Nation-Address (SONA) at the Batasan Complex in Quezon City, President Gloria Macapagal-Arroyo said her administration has been working hard to provide cheaper essential medicines which ordinary Filipinos are now enjoying at some 13,000 Botika ng Barangays nationwide.

To best serve the public welfare, the President said government efforts have now prodded the pharmaceutical industry to come up with a 50 percent cut on low-cost generics and branded medicines like RiteMed under the Cheaper Medicines law which she signed last year.

The President earlier gave a deadline to drug firms to voluntarily comply with the cheaper medicines law by reducing the prices of essential medicines by at least 50 percent. Otherwise, the government will mandate price ceilings for 22 commonly prescribed drugs.

"I supported the tough version of the House on the Cheaper Medicine law. I supported it over the weak version of my critics. The result: the drug companies volunteered to bring down drug prices, slashing by half the prices of 16 drugs," she said.

The President thanked the lawmakers who pushed for the passage of the tougher version of the cheaper medicines law even as she advised critics to just work hard to immediately provide relief for the poor and vulnerable.

The President pointed out that 86 percent of the population is now enjoying Philhealth insurance coverage.

As part of the its economic resiliency plan, the government is providing additional Philhealth benefits for the universal health coverage particularly of the poorest sector.

The President thanked Congress for the passage of the Rent Control Law which she recently signed providing for a one-year moratorium in the rental increase of residential units including the allowable seven percent annual increase until 2013. (PND)



Sources:
http://pid.adb.org/pid/TaView.htm?projNo=39606&seqNo=01&typeCd=2
http://www.gov.ph/index.php?option=com_content&task=view&id=2001259&Itemid=2
http://www.skyscrapercity.com/archive/index.php/t-343729.html
http://www.microfinancefocus.com/news/2009/09/01/grameen-foundation-mobilizes-10-million-investment-for-card-microfinance-2/
http://www.uncdf.org/english/microfinance/pubs/newsletter/pages/2005_03/featured_guest.php

---HRM Assignment # 7---

"Human beings are the most important, potent and critical, resource of any organization, and yet the least understood and the worst managed of its resources" This phrase which describe the human works in the organization. Let me discuss the factors which affect the behavior of human in his profession.

Humans are an organization’s greatest assets; without them, everyday business functions such as managing cash flow, making business transactions, communicating through all forms of media, and dealing with customers could not be completed....humans and the potential they possess drive an organization. Today's organizations are continuously changing and organizational change impacts not only the business but also its employees.

However to exploit this resource it has to be managed and management of this particular resource depends on multiple factors, depending mostly on the size of the company human resource management works to ensure that employees are able to meet the organization’s goals management should maximize organizational effectiveness, human potential, individuals' capabilities, time, and talents.

The effect of globalization lately has shown the value in educating employees in competency development. The relevance of this globalization is the proficiency at which Human Resource work is conducted within an organization. Recent studies show that developing the competence level is in high demand in today’s society and therefore many companies have chosen to give its’ staff adequate opportunities to utilize their skills. In theory the basic hypothesis states that knowledge and competence within the workforce will be the key to success in the future rather than financial resources. The investment of this proficiency within the private and public sector on a short-term and long-term basis is necessary for each corporation in the future. A well functional organization has good insight in what demands a company should require and what competence the employees must have. During the 90’s many corporations faced several cut backs which resulted in the lack of inadequate training procedures regarding skill development for its employees. In this particular research, we have two unique corporations that have been studied for the importance HR work has on the competence development. Through interviews with correspondents working within the HR sector in global corporations, the results show that both companies view competence development as an important aspect of its’ respective success for the future. During the interviews both of the correspondents said that financial resources are not enough to give the employees the opportunity to develop their skills on a regular basis. Therefore the main responsibility is up to each individual to keep their respective knowledge up to date.
Human Needs And Their Fulfillment
Even though we are all different, we each have the same 6 basic human needs. These needs must be satisfied, otherwise we feel uncomfortable where we are, with our lives and ultimately with ourselves.

Defining roles and competencies
Competencies – what a person is capable of doing, rather than what they are doing – help address both behavioural and technical skills needed to define job expectations and requirements. They provide a common language and framework for those critical – but sometimes elusive – aspects of job performance and are an effective tool for communicating about performance because they help people frame expectations and goals in clear terms.

Therefore in order to experience true fulfillment and satisfaction in life, it is essential to work on fulfilling all your basic needs.

One of the major roles of a human resources department in a successful business involves a lot of observation and analysis from behind the scenes. Indeed, the intelligence of the human resources department often involves what can be likened to “crunching numbers.” Compiling complex data and metrics that follow the performance of individual employees, as the move through the workforce is an important task, which has helped human resources, work out crucial solutions to inefficiency, sagging profit margins and more.

Due to the sensitive nature of human relations and the work that human resources departments must carry out, discretion is a crucial element to this field. That’s because the management of performance can often involve tough decisions such as choosing who to let go, who to promote and who to hire. Keeping the decision making process behind closed doors is an ethical practice that breeds the least amount of contention possible.
But how are these decisions made? Nearly every employee today should be able to relate to the hiring process and the term review interviews that come with starting out and maintaining a job almost anywhere. Yet what the employee sees in these interviews is really just the tip of the iceberg in when it comes to the vast amount of work done by human resources specialists.

Indeed, performance management, message creation, job recruitment and promotion decisions take countless hours of observation and data analysis that result in the most beneficial decisions in the end. Just the 3 month review for new employees can reveal the fact that a lot of careful observation has gone into the job performance and training adaptation evaluation. This means that a human resources specialist has been taking notes and methodically charting employees’ progress in the most efficient and professional manner possible. It’s not that easy, yet the work is essential to any company’s optimized success.

Academic field of study concerned with human behavior in organizations; also called organizational psychology. It covers topics such as Motivation, Group Dynamics, leadership, organization structure, decision making, careers, conflict resolution, and Organizational Development. When this subject is taught in business schools, it is called organizational behavior; when it is taught in psychology departments, it is called organizational psychology.

The terms "corporate culture" and "organizational behavior" are sometimes used interchangeably, but in reality, there are differences between the two. Corporate culture encompasses the shared values, attitudes, standards, and beliefs and other characteristics that define an organization's operating philosophy. Organizational behavior, meanwhile, can be under-stood in some ways as the academic study of corporate culture and its various elements, as well as other important components of behavior such as organization structure and organization processes. Organizational behavior, said Gibson, Ivancevich, and Donnelly, is "the field of study that draws on theory, methods, and principles from various disciplines to learn about individual perceptions, values, learning capacities, and actions while working in groups and within the total organization; analyzing the external environment's effect on the organization and its human resources, missions, objectives, and strategies.…Effective managers know what to look for in terms of structure, process, and culture and how to under-stand what they find. Therefore, managers must develop diagnostic skills; they must be trained to identify conditions symptomatic of a problem requiring further attention. Problem indicators include declining profits, declining quantity or quality of work, increases in absenteeism or tardiness, and negative employee attitudes. Each of these problems is an issue of organizational behavior."

The role of the HR manager must parallel the needs of his or her changing organization. Successful organizations are becoming more adaptive, resilient, quick to change direction and customer-centered. Within this environment, the HR professional, who is considered necessary by line managers, is a strategic partner, an employee sponsor or advocate and a change mentor.

Strategic Partner
In today’s organizations, to guarantee their viability and ability to contribute, HR managers need to think of themselves as strategic partners. In this role, the HR person contributes to the development of and the accomplishment of the organization-wide business plan and objectives.
The HR business objectives are established to support the attainment of the overall strategic business plan and objectives. The tactical HR representative is deeply knowledgeable about the design of work systems in which people succeed and contribute. This strategic partnership impacts HR services such as the design of work positions; hiring; reward, recognition and strategic pay; performance development and appraisal systems; career and succession planning; and employee development.

Employee Advocate
As an employee sponsor or advocate, the HR manager plays an integral role in organizational success via his knowledge about and advocacy of people. This advocacy includes expertise in how to create a work environment in which people will choose to be motivated, contributing, and happy.
Fostering effective methods of goal setting, communication and empowerment through responsibility, builds employee ownership of the organization. The HR professional helps establish the organizational culture and climate in which people have the competency, concern and commitment to serve customers well.
In this role, the HR manager provides employee development opportunities, employee assistance programs, gainsharing and profit-sharing strategies, organization development interventions, due process approaches to problem solving and regularly scheduled communication opportunities.

Change Champion
The constant evaluation of the effectiveness of the organization results in the need for the HR professional to frequently champion change. Both knowledge about and the ability to execute successful change strategies make the HR professional exceptionally valued. Knowing how to link change to the strategic needs of the organization will minimize employee dissatisfaction and resistance to change.
The HR professional contributes to the organization by constantly assessing the effectiveness of the HR function. He also sponsors change in other departments and in work practices. To promote the overall success of his organization, he champions the identification of the organizational mission, vision, values, goals and action plans. Finally, he helps determine the measures that will tell his organization how well it is succeeding in all of this.


Sources:
http://www.projectsparadise.com/human-resource-competence-development/
http://www.hrvillage.com/human-resources/role.htm
http://humanresources.about.com/od/hrbasicsfaq/a/hr_role.htm

---MIS Assignment # 8---

As a student I may not know the real meaning of Out-source position and In-source position. But as I surf the net I found out the terms, advantages and disadvantages of this matter. Let me first discuss my chosen position which stands for Out-source.

There are many arguing that outsourcing jobs to other countries is taking jobs away from people of this country. This is a major concern to most; however, this is not the topic most under debate in most organizations today. In just about every major company, upper level management is meeting on how to increase the value of there company. Outsourcing is the topic under debate. Top executives are researching this topic and whether they should make (in-house) or buy (outsource). Let us look at the different types of outsourcing. Also , let examine the problems so many companies have with this decision and look at a strategic sourcing model that can aide them in making this decision.

Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. The decision to outsource is often made in the interest of lowering cost or making better use of time and energy costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of land, labor, capital, (information) technology and resources. Outsourcing became part of the business lexicon during the 1980s. It is essentially a division of labour. Out sourcing in the information technology field has two meanings. One is to commission the development of an application to another organization, usually a company that specializes in the development of this type of application. The other is to hire the services of another company to manage all or parts of the services that otherwise would be rendered by an IT unit of the organization. The latter concept might not include development of new applications. Outsourcing also allows companies to focus on other business issues while having the details taken care of by outside experts. This means that a large amount of resources and attention, which might fall on the shoulders of management professionals, can be used for more important, broader issues within the company. The specialized company that handles the outsourced work is often streamlined, and often has world-class capabilities and access to new technology that a company couldn't afford to buy on their own. Plus, if a company is looking to expand, outsourcing is a cost-effective way to start building foundations in other countries.

There are some disadvantages to outsourcing as well. One of these is that outsourcing often eliminates direct communication between a company and its clients. This prevents a company from building solid relationships with their customers, and often leads to dissatisfaction on one or both sides. There is also the danger of not being able to control some aspects of the company, as outsourcing may lead to delayed communications and project implementation. Any sensitive information is more vulnerable, and a company may become very dependent upon its outsource providers, which could lead to problems should the outsource provider back out on their contract suddenly.
While outsourcing may prove highly beneficial for many companies, it also has many drawbacks. It is important that each individual company accurately assess their needs to determine if outsourcing is a viable option.


Overview
Outsourcing involves the transfer of the management and/or day-to-day execution of an entire business function to an external service provider. The client organization and the supplier enter into a contractual agreement that defines the transferred services. Under the agreement the supplier acquires the means of production in the form of a transfer of people, assets and other resources from the client. The client agrees to procure the services from the supplier for the term of the contract. Business segments typically outsourced include information technology, human resources, facilities, real estate management, and accounting. Many companies also outsource customer support and call center functions like telemarketing, CAD drafting, customer service, market research, manufacturing, designing, web development, print-to-mail, content writing, ghostwriting and engineering. Offshoring is the type of outsourcing in which the buyer organization belongs to another country.

Outsourcing and offshoring are used interchangeably in public discourse despite important technical differences. Outsourcing involves contracting with a supplier, which may or may not involve some degree of offshoring. Offshoring is the transfer of an organizational function to another country, regardless of whether the work is outsourced or stays within the same corporation/company.
Multisourcing refers to large outsourcing agreements (predominantly IT). Multisourcing is a framework to enable different parts of the client business to be sourced from different suppliers. This requires a governance model that communicates strategy, clearly defines responsibility and has end-to-end integration.
Activities for outsourcing
Research & Development
The competitive pressures on firms to bring out new products at an ever rapid pace to meet market needs are increasing. As such, the pressures on the R&D department are increasing. In order to alleviate the pressure, firms have to either increase R&D budgets or find ways to utilize the resources in a more productive way. There are situations when a firm may consider outsourcing some of its R&D work to a contract research organizations or universities.

Reasons why a firm could consider outsourcing are:
• new product design does not work
• project time and cost overruns
• loss of key staff
• competitive response
• problems of quality/yield.

The key drivers for R&D outsourcing are emerging mass markets and availability of expertise in the field. In this context, the two most populous countries in the world, China and India, provide huge pools from which to find talent. Both countries produce over 200,000 engineers and science graduates each year. Moreover both countries are low cost sourcing countries. Other strategic drivers for outsourcing R&D are access to expertise and intellectual property, filling gaps in the capabilities of the R&D function, managing risk better, reducing the time to market, and focusing on the core competence or activities of the firm.


Reasons for outsourcing
Organizations that outsource are seeking to realize benefits or address the following issues:
• Cost savings. The lowering of the overall cost of the service to the business. This will involve reducing the scope, defining quality levels, re-pricing, re-negotiation, cost re-structuring. Access to lower cost economies through offshoring called "labor arbitrage" generated by the wage gap between industrialized and developing nations.
• Focus on Core Business. Resources (for example investment, people, and infrastructure) are focused on developing the core business. For example often organizations outsource their IT support to specilaised IT services companies.
• Cost restructuring. Operating leverage is a measure that compares fixed costs to variable costs. Outsourcing changes the balance of this ratio by offering a move from fixed to variable cost and also by making variable costs more predictable.
• Improve quality. Achieve a step change in quality through contracting out the service with a new service level agreement.
• Knowledge. Access to intellectual property and wider experience and knowledge.
• Contract. Services will be provided to a legally binding contract with financial penalties and legal redress. This is not the case with internal services.
• Operational expertise. Access to operational best practice that would be too difficult or time consuming to develop in-house.
• Access to talent. Access to a larger talent pool and a sustainable source of skills, in particular in science and engineering.
• Capacity management. An improved method of capacity management of services and technology where the risk in providing the excess capacity is borne by the supplier.
• Catalyst for change. An organization can use an outsourcing agreement as a catalyst for major step change that can not be achieved alone. The outsourcer becomes a Change agent in the process.
• Enhance capacity for innovation. Companies increasingly use external knowledge service providers to supplement limited in-house capacity for product innovation.
• Reduce time to market. The acceleration of the development or production of a product through the additional capability brought by the supplier.
• Commodification. The trend of standardizing business processes, IT Services and application services enabling businesses to intelligently buy at the right price. Allows a wide range of businesses access to services previously only available to large corporations.
• Risk management. An approach to risk management for some types of risks is to partner with an outsourcer who is better able to provide the mitigation.
• Venture Capital. Some countries match government funds venture capital with private venture capital for startups that start businesses in their country.
• Tax Benefit. Countries offer tax incentives to move manufacturing operations to counter high corporate taxes within another country.

Criticisms of outsourcing

Quality Risks
Quality Risk is the propensity for a product or service to be defective, due to operations-related issues. Quality risk in outsourcing is driven by a list of factors. One such factor is opportunism by suppliers due to misaligned incentives between buyer and supplier, information asymmetry, high asset specificity, or high supplier switching costs. Other factors contributing to quality risk in outsourcing are poor buyer-supplier communication, lack of supplier capabilities/resources/capacity, or buyer-supplier contract enforceability. Two main concepts must be considered when considering observability as it related to quality risks in outsourcing: the concepts of testability and criticality.
Quality fade is the deliberate and secretive reduction in the quality of labor in order to widen profit margins. The downward changes in human capital are subtle but progressive, and usually unnoticeable by the out sourcer/customer. The initial interview meets requirements, however, with subsequent support, more and more of the support team are replaced with novice or less experienced workers. India IT shops will continue to reduce the quality of human capital, under the pressure of drying up labor supply and upward trend of salary, pushing the quality limits. Such practices are hard to detect, as customers may just simply give up seeking help from the help desk. However, the overall customer satisfaction will be reduced greatly over time. Unless the company constantly conducts customer satisfaction surveys, they may eventually be caught in a surprise of customer churn, and when they find out the root cause, it could be too late. In such cases, it can be hard to dispute the legal contract with the India outsourcing company, as their staff are now trained in the process and the original staff made redundant. In the end, the company that outsources is worse off than before it outsourced its workforce to India.

Public opinion
There is a strong public opinion regarding outsourcing (especially when combined with offshoring) that outsourcing damages a local labor market. Outsourcing is the transfer of the delivery of services which affects both jobs and individuals. It is difficult to dispute that outsourcing has a detrimental effect on individuals who face job disruption and employment insecurity; however, its supporters believe that outsourcing should bring down prices, providing greater economic benefit to all. There are legal protections in the European Union regulations called the Transfer of Undertakings (Protection of Employment). Labor laws in the United States are not as protective as those in the European Union. On June 26 2009, Jeff Immelt, the CEO of General Electric, called for the United States to increase its manufacturing base employment to 20% of the workforce commenting that the U.S. has outsourced too much and can no longer rely on consumer spending to drive demand.

Language skills
In the area of call centers end-user-experience is deemed to be of lower quality when a service is outsourced. This is exacerbated when outsourcing is combined with off-shoring to regions where the first language and culture are different. The questionable quality is particularly evident when call centers that service the public are outsourced and offshored.
The public generally find linguistic features such as accents; word use and phraseology different which may make call center agents difficult to understand. The visual clues that are present in face-to-face encounters are missing from the call center interactions and this also may lead to misunderstandings and difficulties.
In addition to language and accent differences, a lack of local social and geographic knowledge is often present, leading to misunderstandings or mis-communications.

Social responsibility
Outsourcing sends jobs to the lower-income areas where work is being outsourced to, which provides jobs in these areas and has a net equalizing effect on the overall distribution of wealth. Some argue that the outsourcing of jobs (particularly off-shore) exploits the lower paid workers. A contrary view is that more people are employed and benefit from paid work. Despite this argument, domestic workers displaced by such equalization are proportionately unable to outsource their own costs of housing, food and transportation.
On the issue of high-skilled labor, such as computer programming, some argue that it is unfair to both the local and off-shore programmers to outsource the work simply because the foreign pay rate is lower. On the other hand, one can argue that paying the higher-rate for local programmers is wasteful, or charity, or simply overpayment. If the end goal of buyers is to pay less for what they buy, and for sellers it is to get a higher price for what they sell, there is nothing automatically unethical about choosing the cheaper of two products, services, or employees.
Social responsibility is also reflected in the costs of benefits provided to workers. Companies outsourcing jobs effectively transfer the cost of retirement and medical benefits to the countries where the services are outsourced. This represents a significant reduction in total cost of labor for the outsourcing company. A side effect of this trend is the reduction in salaries and benefits at home in the occupations most directly impacted by outsourcing.

Quality of service
Quality of service is measured through a service level agreement (SLA) in the outsourcing contract. In poorly defined contracts there is no measure of quality or SLA defined. Even when an SLA exists it may not be to the same level as previously enjoyed. This may be due to the process of implementing proper objective measurement and reporting which is being done for the first time. It may also be lower quality through design to match the lower price.
There are a number of stakeholders who are affected and there is no single view of quality. The CEO may view the lower quality acceptable to meet the business needs at the right price. The retained management team may view quality as slipping compared to what they previously achieved. The end consumer of the service may also receive a change in service that is within agreed SLAs but is still perceived as inadequate. The supplier may view quality in purely meeting the defined SLAs regardless of perception or ability to do better.
Quality in terms of end-user-experience is best measured through customer satisfaction questionnaires which are professionally designed to capture an unbiased view of quality. Surveys can be one of research. This allows quality to be tracked over time and also for corrective action to be identified and taken.

Staff turnover
The staff turnover of employee who originally transferred to the outsourcer is a concern for many companies. Turnover is higher under an outsourcer and key company skills may be lost with retention outside of the control of the company.
In outsourcing offshore there is an issue of staff turnover in the outsourcer companies call centers. It is quite normal for such companies to replace its entire workforce each year in a call center. This inhibits the build-up of employee knowledge and keeps quality at a low level.

Company knowledge
Outsourcing could lead to communication problems with transferred employees. For example, before transfer staff have access to broadcast company e-mail informing them of new products, procedures etc. Once in the outsourcing organization the same access may not be available. Also to reduce costs, some outsource employees may not have access to e-mail, but any information which is new is delivered in team meetings.
Failure to deliver business transformation
Business transformation has traditionally been promised by outsourcing suppliers, but they have usually failed to deliver. In a commoditised market where any half-decent service provider can do things cheaper and faster, smart vendors have promised a second wave of benefits that will improve the client’s business outcomes. According to Vinay Couto of Booz & Company “Clients always use the service provider’s ability to achieve transformation as a key selection criterion. It’s always in the top three and sometimes number one.” Often vendors have promised transformation on the basis of wider domain expertise that they didn’t really have, though Couto also says that this is often down to client’s unwillingness to invest in transformation once an outsourcing contract is in place.

Productivity
Offshore outsourcing for the purpose of saving cost can often have a negative influence on the real productivity of a company. Rather than investing in technology to improve productivity, companies gain non-real productivity by hiring fewer people locally and outsourcing work to less productive facilities offshore that appear to be more productive simply because the workers are paid less. Sometimes, this can lead to strange contradictions where workers in a developing country using hand tools can appear to be more productive than a U.S. worker using advanced computer controlled machine tools, simply because their salary appears to be less in terms of U.S. dollars.
In contrast, increases in real productivity are the result of more productive tools or methods of operating that make it possible for a worker to do more work. Non-real productivity gains are the result of shifting work to lower paid workers, often without regards to real productivity. The net result of choosing non-real over real productivity gain is that the company falls behind and obsoletes itself overtime rather than making investments in real productivity.

Security
Before outsourcing an organization is responsible for the actions of all their staff and liable for their actions. When these same people are transferred to an outsourcer they may not change desk but their legal status has changed. They no-longer are directly employed or responsible to the organization. This causes legal, security and compliance issues that need to be addressed through the contract between the client and the suppliers. This is one of the most complex areas of outsourcing and requires a specialist third party adviser.
Fraud is a specific security issue that is criminal activity whether it is by employees or the supplier staff. However, it can be disputed that the fraud is more likely when outsourcers are involved, for example credit card theft when there is scope for fraud by credit card cloning. In April 2005, a high-profile case involving the theft of $350,000 from four Citibank customers occurred when call center workers acquired the passwords to customer accounts and transferred the money to their own accounts opened under fictitious names. Citibank did not find out about the problem until the American customers noticed discrepancies with their accounts and notified the bank.



Source: http://en.wikipedia.org/wiki/Outsourcing#Overview