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Definition: Deregulation

Deregulation is the practice of lightening the policy burden on the Human Resources (HR) department and at the same time, delegating HR authority to the line managers. This came in vogue in US after the National Personnel Review in 1993. Since then, deregulation practice has been started in an effort to reduce the cost and complexity of the federal human resource management (FHRM) system. This practice has therefrom started to flow to various organisations across the planet.

However there remains an obvious downside to excessive deregulation. While implementing the practice, one must be aware of certain laws and policies in place which should nevertheless remain in place for structured functioning of the organisation. This creates a challenge for HR managers regarding the extent of implementing deregulation.

Usually most of deregulation is seen in the following areas of HR activities:

  1. Performance management
  2. Leaves and staffing

On the contrary, areas of HRM like hierarchy and final selection decisions, disciplining and firing of employees have yet not experienced fair amount of deregulation. Barriers to deregulation include most line managers perceiving delegated authorities as additional workload and hence the line managers prefer to remain away from these responsibilities.


Hence, this concludes the definition of Deregulation along with its overview.


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