1.2 Internal Factors
Internal factors are elements within a company’s control that influence its human resources (HR) policies, practices, and results. These factors affect the way HR managers work and how they support the organization’s goals. Key internal factors include:
Organization Culture
Organizational culture refers to the shared values, beliefs and attitudes that influence employee behaviour. It is often reflected in an organization’s mission and vision statements as well as in its symbols (like logos), stories and events (like parties and award ceremonies). Culture provides employees with a sense of purpose and helps define the expected behaviours and norms of the company.
For example, a traditional bank may have a very formal and structured culture, while a tech company like Shopify may foster a more flexible and innovative environment. HR departments help build and maintain a strong culture through various initiatives. These may include employee recognition programs, such as an employee-of-the-month wall picture display and social events like company parties, team sports or family outings. Such activities help reinforce company values. A strong culture can help attract new talent and also help to retain employees through loyalty.
Management Practice
This is how a company is run and how decisions are made. Traditional hierarchical structures are built as pyramids. The CEO is at the top, and many layers of managers below. This makes it harder for communication across departments and slows down decision-making. Today, many companies are adopting flatter structures with fewer levels. This helps employees work together more easily and make faster decisions. Employees have more responsibility to make decisions. By eliminating the middle manager, the budget costs are lower.
HRM helps improve management practices by making sure managers and employees work well together. HR creates clear job roles, supports goal setting, and helps train managers to lead their teams better. HR also designs fair pay systems, helps with performance reviews and uses data to make work more efficient.
Organizational Climate
Refers to the atmosphere of the organization and the employee’s perception of the organization (Jay, n.d.). It is much like a personality, with each person being unique. Each company wants to be unique, too. The company’s climate affects how employees behave, including how they interact with others, how much independence they have in their work, and how they fit into the company’s structure.
Some employee perception examples include whether employees are trusted to complete their jobs without micromanaging, whether they feel they are developing in the company, and whether they are rewarded for high performance. A positive climate enhances job satisfaction. HR can support the organizational climate by using surveys to measure the “temperature” of the organization and make suggestions to improve the work environment. A good climate keeps employees motivated and helps the company succeed.
Technology
While Technology is usually considered an external factor, the choice to implement specific technologies within the organization is an internal decision. For example, a company’s decision to use AI in recruitment is an internal choice. AI technology is an external factor.
Technology has changed how companies work. It helps automate tasks, save money and improve communication. Digital innovation allows organizations to easily control work with more uniformity, opens up faster communication through email, instant messages and video conferencing (Zoom). Through quicker communication, collaboration is increased, which leads to more creativity. Employees and teams can respond to problems and changes in minutes with solutions. It has and will continue to shape the workplace. HR departments use technology to hire employees, support administration, training and development, provide analytics, and much more. There are many technological tools that help HR Managers make decisions related to attendance, legal issues, track employee progress, and assist in the strategic alignment of the business.
“1.5 Human Resources and Environmental Factors” from Human Resources Management – 3rd Edition Copyright © 2023 by Debra Patterson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted. Modifications: rephrased sections.
