THE ROLE OF BUDGET CONSTRAINTSIN HUMAN RESOURCES MANAGEMENT OF ORGANIZATION
DOI:
https://doi.org/10.22394/2304-3369-2021-3-135-147Keywords:
human resources management, budget constraint, soft budget constraint, changes in budget constraint, budgeting of personnel costs, institutionsAbstract
The article studies the reactions of the organization’s personnel management to changes in its budget constraints. The results of this analysis give the organization an opportunity to effectively plan its personnel policy depending on access to various sources of funding. Based on the examination of domestic legislation, statistical materials of the Russian Federation and recent publications in journals on personnel management, a table has been compiled, which gives the main characteristics of the organization’s budgetary constraints in personnel management.
The theory of budget constraints is being developed. Market factors affecting the rigidity and expansion/contraction of the organization’s budgetary constraints include: price and nonprice competition in labor markets or markets for finished goods, price elasticity of demand for employees, the cost of borrowed funds. Institutional prerequisites and obstacles to changing budget constraints, as well as forms of organizations’ reaction to changes in these constraints in the personnel sector are identified. Among the institutional factors affecting the rigidity and the possibility of expanding budgetary restrictions are: legislation on bankruptcy, minimum wages and the procedure of payments to employees; the possibility of obtaining subsidies by an organization and institutional restrictions on access to loans. The article focuses on external and internal budgetary restrictions, as well as on the importance and difficulties of personnel costs budgeting in the practice of personnel management in modern Russia.
Various modes of changing budget constraints are proposed to be used in management. The transition between them depends on the tasks of the organization. Recommendations are given to organizations in the conditions of narrowing and increasing, expanding or softening the rigidity of the budgetary constraint. In particular, the author proposes several options for the organization’s behavior in the labor sphere when expanding the budgetary constraint.
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References
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REFERENCES
1. Kornai J., Maskin E., Roland G. (2003). Understanding the soft budget constraint, Journal of Economic Literature, vol. 41, pp. 1095–1136.
2. Maskin E., Xu C. (2001). Soft budget constraint theories: from centralization to the market, Economics of Transition, vol. 9, no. 1, pр. 1–27.
3. Earle J., Estrin S. (2003).Privatization, competition and budget constraints: disciplinig enterprises in Russia, Economics of Planning, vol. 36, no. 1, pp. 1–22.
4. Krausert A. (2015) HRM Signals for the Capital Market. Human Resource Management. DOI: 10.1002/hrm.21718.
5. Krausert A. (2017).The HRM–capital market link: Effects of securities analysts on strategic human capital, Human Resource Management, vol. 57, no. 1, pp. 97–110. DOI: 10.1002/hrm.21841.
6. Cushen J., Thompson P. (2016). Financialization and value: Why labour and the labour process still matter, Work, Employment and Society, no. 30, pp. 352– 365.
7. Pepple D., Olowookere K. (2020).Towards an Understanding of the Dynamics of Work and Employment Relations during Austerity, Public Organization Review. DOI: 10.1007/s11115-020-00488-z.
8. Cook H., MacKenzie R., Forde C. (2016). HRM and performance: the vulnerability of soft HRM practices during recession and retrenchment, Human Resource Management Journal. DOI: 10.1111/ 1748-8583.12122.
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18. Heyden M., Reimer M., Doorn Van S. (2015) Innovating Beyond the Horizon: CEO Career Horizon, Top Management Composition, and R&D Intensity, Human Resource Management. DOI: 10.1002/hrm.21730.
19. Thompson P. (2003). Disconnected capitalism: Or why employers can’t keep their side of the bargain, Work, Employment & Society, vol. 17, no. 2, pp. 359–378.
20. Appelbaum E., Batt R. (2014). Private equity at work: When wall street manages main street. New York, NY: Russell Sage.
21. Goyer M., Clark I., Bhankaraully S.(2016). Necessary and sufficient factors in employee down- sizing? A qualitative comparative analysis of lay‐offs in France and the UK, 2008–2013, Human Resource Management Journal, vol. 26, no. 3, pp. 252–268.
