Management of People In Organisations

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Management of People In Organisations

Question 1.

Increasingly, personal financial circumstances will require men and women to delay their retirement, whilst, at the same time, the declining birth rate will result in fewer young people entering the labour market.

Discuss the implications for both organisational human resource planners and government policy makers of these demographic changes.

Critically evaluate the respective roles of government and business in developing an effective labour market.

Throughout the 20th century labour market conditions were continually changing.  However, it is the impact of the declining birth rate and low mortality figures that now pose the greatest challenge to human resource planners and government policy makers.  This paper shall consider the implications of these demographic changes on the government and organisations, and how those responsible can adapt their attitudes and policies, so ensuring an effective labour market capable of sustaining a growing economy and supporting us all into old age.

Working conditions have generally improved resulting in falling hours, an increase in real wages, greater flexibilty and an increase in the female proportion of the workforce (Lindsay 2003 pp 133-144).  For many jobs were for life, starting work as young as 14, exiting the labour market at 60 or 65 with sufficient pension income to support their retirement.  However, this traditional work culture is currently scarce.  Todays workforce want to be in greater control of their lives and demand ever increasing quality time away from the workplace.  Unfortunately these attitudes present additional problems in creating a contented, productive and effective labour market.

The macroeconomic affects of having fewer producers relative to comsumers could lead to consequential results.  A report commissioned by the Group of Ten (G-10) countries in 1998 identified a number of issues to be addressed;

  • Demograhic changes will significantly widen budget defecits
  • Reforms should encourage economic growth and the efficient use of resources
  • The problems of funding public retirement and health benefits
  • Increase the supply and efficient use of labour
  • Strength financial infrastructures
  • An immediate increase in the funding of private and public pensions.

The implications to successive governments are far reaching.  Fundamentally the role of government is to manage the country utilising all available resources, more specificly – finance.  An aging population will present ever increasing demands on pension and health resources.  In 1994 Mallier and Shafto (pp38-54) were predicting that “from around 2010 onwards the cost of state pension provision will start to esculate and will become an increasing burden on a shrinking workforce.”  If we then factor in the reduction in government income (taxes and national insurance) resulting from a reduced labour market it is clear budget defecits will increase.  Additionally, a reduction in the supply of labour to meet business requirements could lead to business failures.  This, in turn, leads to a rise in unemployment, increasing the reliance on government financial support.

Further impacting a government will be the performance of the nation’s economy as a whole.  As corporate bodies grow profits increase.  Not only does this provide for further investment but also generates additional tax revenues.  Mirroring this is the lack of growth, little investment and a reduction in corporate tax revenue. Government and business need to work together and have similar aims in their long term planning to avert a depressing consequence on the economy.  The size, strength and role of the labour market is now a major feature of both human resource planning (HRP) and government policy makers.  Indeed, Stredwick (2000 p32) presents HRP as supporting an organisation’s objective of securing a competitive advantage.

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Presently organisations have some degree of labour turnover, the majority of which is the employee’s decision through job change, career break or early retirement.  In nearly all circumstances these new vacancies need to be filled to maintain business activities.  Not only can the recruitment procedure be time consuming and costly, but the investment made in an individual in terms of development and experience is lost, possibly to a competitor.  Given the potential for future labour shortages, competition in the labour market could result in the balance of power switching from employer to prospective employee, with the possibility of organisations being ...

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