Human resources play an integral role in any organization. The allocation of human capital is critical to the overall success of the organization. Depending on the particular industry, talent and its subsequent retention is directly correlated to the overall profitability of the firm. In many instances, as is the case in our current economic cycle, improper human resource activity can have a profound effect on our overall society. By employing and retaining the correct individuals for the corresponding position, both the business and society benefit. For example, the most creative individuals will be placed in the positions that utilize their talent most effectively. This talent will thus be cultivated in the position allowing the individual to grow and develop. This development allows the individual to create products or solutions that another individual with less talent may overlook. This is primarily how Microsoft, Google, Intel, and IBM countinue to generate new and innovate products decade after decade. They simply have the right people in the right places through the use of HRM.
Human Resource Policy Number 1-
"The labor laws in Dubai thus have mandated weekly an individual needs to dedicate 48 hours professionally. Any issues pertaining to overtime or extra working time would be permissible strictly in the fields of security and hospitality, while barring many other mainstream jobs"
I do not agree with this policy, as the UAE is inhibiting its own growth. There should not be a mandate on the amount of hours a particular individual in Dubai should work. If individuals desire to work 50 hours a week, I believe it is in the nations best interest to allow that individual to do so. For one, depending on the industry, more goods or services are being produced. The more goods being produced or the more supply of goods, the cheaper the products are to society in general terms. Further, the individual is earning more wages that will allow him to purchase more goods or services for his own personal consumption. By purchasing these goods, he in turn, is creating demand. With this demand, companies will be forced to hire to compensate for the increase in the amount of goods and services needed. By capping hours, the UAE is actually hindering the process which is in direct competition of its goals. This policy, I believe should be loosened to allow all industries to allow are individuals to work as the demand for the products dictates. This will allow labor to be used in hire demand industries more efficiently, while also eliminating labor in industries will low demand for their goods and services. This, in turn, will create more efficiency in UAE nations in regards to their HRM policies.
Human Resources Policy Number 2-
"Under the new HR policy in Dubai there shall be better salary structure in action, and incentives. Altogether a revised and attractive pay structure has been ushered and encouraged by the government in Dubai."
Human Resources however can be a detriment to our society is used in an incorrect manner. Here, the UAE is developing a value system predicated on money and achievement. This system and its subsequent compensation methods may do more harm for the economy than good. I say this, because relying soling on compensation, may in turn create a system of cheating in the UAE in order to receive more compensation. When given the wrong incentive, which in this instance is only monetary, individuals with the UAE are encouraged to cheat. Depending on what industry these incentives are in located within will determine the extent of the damage to the UAE. This is a very contentious issue that has been given little attention in the media or through general conversation. I believe it is vital to the overall mission of the UAE, to effective deal with this issue.
To elaborate on this point I will use our current economic situation as an example of an incorrect incentive structure and its possible consequences to the UAE. The following two examples are from both the financial services and health care industries. They both illustrate brilliantly how human resources, and in particular incentives can be a detriment to society. I believe this comparison to be relevant as the UAE is aspiring to obtain a capital structure similar to that of the United States. In its effort to persuade and entice individuals to relocate to the UAE, countries like Dubai are offering attractive compensation packages. What is not being considered are the implications of solely relying on compensation as a means of obtaining "talent?" The following examples are classic cases that could occur to the UAE or Dubai if corrective actions are not undertaken.
First, it should be the responsibility of the UAE human resources policy manual to hire individuals with integrity and ethics instead of focusing on compensation. The examples below illustrate the consequences when such action is not taken seriously.
I would first like to begin with a quote, "Ethics knows the difference between what you have a right to do and what is right to do" (1). Our current economic situation resulted almost entirely of excessive greed and unethical actions of key financial institutions. HRM played a huge role in this debacle. As a result of their lack of integrity, and incentive policies, the entire world economy has subsequently suffered in a very severe manner. Many have lost their homes; even more have lost their retirement savings, while still others have lost their livelihoods. Such is the power of ethics and its combination with an incomplete incentive structure. The financial crisis resulted from a mixture of both bad judgment and unethical decision making. Frank Vogel, cofounder of Transparency International, a nonprofit organization charged with ranking nations by degree of corruption remarked, "so many people engaged in so many aspects of finance have lost their ethical compass and put short-term personal gains above other considerations" (2). Logically, the more we value something the more risk we are willing to take to attain them, and unfortunately ethical decision making falls to the wayside. To be fair, the HRM policies of the UAE however can help alleviate this problem through acquiring individuals with high standards while also developing a unique company culture. Both of which I will elaborate on in later sections of the document.
Continuing, although the crisis itself is rather complex, the ethical and incentive factors surrounding the crisis are far easier to understand. David DeRosa, a Finance Professor at Yale University eloquently stated the "housing problem lies more in reckless unwise decisions on home financing; part of the difficulty arose from poor risk assessment" (3). According to Dane, unwise risk management can be an indication of weakness in moral character. Furthermore, it can be an indicator of traits like pride, indifference, greed and irresponsibility. Pride, in excess, may lead to overestimation of powers, which leads to underestimation of risk. To summarize, unethical decision making was partly responsible for the financial crisis because at the time, an investor's short-term, personal gain (incentives through compensation) was worth more than the risk it took to acquire them. This however can in effect be eliminated by UAE through the use of culture. Again, I will elaborate on this in later sections.
Human Resources Policy Number 3-
"In order to cater to the needs of the inhabitants, the HR Policies in Dubai has made it compulsory for organizations to give the national job seekers first priority over others."
I believe this policy should not be changed as it insures the prosperity of the UAE. As alluded to earlier, the HR policies of the UAE are short-term and near sighted in nature. However, through this mandate, I believe the UAE was correct. Culture can have a profound impact on an organization and the community it is located in. By giving national citizens priority, the UAE is in essence, pegging its prosperity to that of its businesses. By forcing organizations to hiring individuals for example, with origins in Dubai, the UAE is providing much needed monetary stimulus for their economies. By allowing people to earn more, these same individuals will spend more, thus creating more jobs in the process. However, as I have gone into detail about above, with this prosperity comes newfound problems, mostly in the incentive structure of jobs. As many more individuals obtain jobs, the HRM departments of the UAE must be ever more vigilant in guarding against abuses. However, looking at this policy in aggregate relative to the others, clearly the benefits outweigh the shortcomings. I will describe why below:
The culture of the organization must reflect newfound principles. This culture is primarily dependent on the cultural background of the individuals who comprise an organization. Here too HRM in the UAE has a very significant role. By utilizing culture differences as an ally, the UAE can in effect, change the culture of the organization. They can change the culture through interpersonal relationships between various individuals, departments, and executives. Through these interpersonal…