Adding Value through Diversity Management, Ethical Behaviours, and Organisational Commitment - Assignment Example

Table of Contents Table of Contents 1 Introduction 1 Review of Literature 2 Critical Analysis of “Added Value” 2 Employee Resourcing 3 Employee Development 7 Recommendations 9 Conclusion 13 References 14 Introduction “Human Resource Management (HRM) practices affect organisational performance through their effect on employee development and behaviours” (Triguero et al., 2012, p.19). HR systems that are aligned with company strategy can positively influence productivity and return on assets (Guthrie, 2011; Liu et al., 2007). Employee resourcing and employee development are key HR functions and activities that can affect the motivation and commitment of employees to their jobs and organisations (Ghebregiorgis & Karsten, 2007; Iles, 2007). Some of the central issues for this report are diversity management, ethical organisational cultures, employee motivation and organisational learning through the development of employee knowledge, skills and attitudes (KSA). These issues reveal the complexities of resourcing and development issues, especially in diverse and learning organisations that are in dynamic industries. This report explores how resourcing and development add value to the modern workplace. It shows that resourcing and development add value through improving diversity management, ethical climate development, and organisational learning, which mediate or directly contribute to employee and organisational performance, organisational commitment and strategic development of organisational capabilities. Review of Literature Critical Analysis of “Added Value” The HR-Performance connection has flourished since the 1990s, as a number of scholars proved that HR adds value to organisations by assisting in the enhancement of performance. Huselid (1995) provided the springboard for the relationship between HR and performance in his seminal article, “The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance,” where he showed that for publicly-traded companies in the United States, the degree of sophistication of HR systems positively affected the market value of employees. Since then, other studies showed a positive, although not always causative, connection between HRM and organisational performance in different industries and cultures through affecting employee commitment (Triguero et al., 2012) and compensation and promotion strategies (Qaisar, Qaiser, & Rehman, 2012). They assert that HR has positive effects on individual, group and/or organisational performance because of the former’s activities that affect how people think about and perform their jobs. Several scholars, however, questioned the nature of relationship between HR and performance. Guest (2011), in “Human Resource Management and Performance: Still Searching for Some Answers,” reviewed decisive studies that connect HRM and organisational performance, which organisational science and HRM scholars divide into different components and in different ways. He stressed that for the past twenty years, various organisational science research have provided an understanding that HR is linked with performance, but they were not able to fully understand why these associations exist (Guest, 2011, p.3). Nevertheless, Guest (2011) affirmed that HRM can add value to organisations through boosting the capabilities of middle and line managers in properly managing their personnel (p.9). Paauwe (2009) confirmed the doubts of Guest (2011) about the causative relationship between performance and HRM, and the former mentioned several studies that were cautious in concluding that HRM causes high organisational performance. Paauwe (2009) stressed in his conclusion of what scholars attained so far: “...[In the course of ten years the evidence has mounted that HR practices, be it individually or bundled in a system, are at least weakly related to firm performance” (p.133). Thus, HR can add value to individual/team/organisational performance, but answering the how and the why deserves further theory-driven and longitudinal studies. Employee Resourcing After discussing how HR activities add value to modern organisations, this report discusses employee resourcing and how it improves various levels of performance. Definitions. Employee resourcing is defined in various ways, including what it is basically composed of, what it should be, and what it actually is. Armstrong (2008) provided a straightforward definition of the role of resourcing in supporting company operations and objectives: “Resourcing is what organisations do to ensure they have the people they need.” Employee resourcing includes recruitment, selection, and retention strategies. Davis and Scully (2008) underscored the connection between resourcing and company/employee objectives too: “Effective employee resourcing strategies allow organisations, and the individuals and groups within them, to achieve mutually beneficial objectives” (p.96). They noted, nevertheless, that resourcing is as much about the employee as it is about the organisation. Iles (2007) went beyond the normative and prescriptive definitions of employee resourcing (ER) and included a critical analysis of its power structure. He stated: “The ER process involves the assessing, appraising, grading, tracking, sorting, shifting and placing of individuals, not always employees, in order to make staffing decisions,” and the nature of the process and humanity “raises questions of power, politics, equal opportunity, knowledge and ethics” (Iles, 2007, p.98). Modern workplaces, whether international or local, face the challenges of meeting employee resourcing needs, while organisations and their environments are changing in response to competition and market needs. HR managers struggle in conducting ER activities, as organisational and environmental forces affect HR planning and implementation. Benefits. Employee resourcing can improve performance through adopting diversity management strategies. From recruiting to hiring, a diversity management perspective allows HR to look for and hire from as varied pools of applicants as possible. This relates to Equal Opportunity principle, where biases and discrimination are removed from HR policies and practices. Wilson (2008) gave the UK National Health Service (NHS) as an illustration of international diversity management. She stressed that the NHS is “largest single employer within the UK, employing over a million people – 5 percent of the working population – in numerous careers (over 70 professions)” (Wilson, 2008, p.7). The NHS reaps the benefits of tapping competent and experienced people from all over the world, while migrant workers gain helpful education and experience (Wilson, 2008, p.7). Benefits flow both ways for the NHS case. Furthermore, selecting diverse people enhances creativity. Google is known for its diversity management in hiring and selecting people. It thrives on creativity that it gets from its diverse people from different ages, genders, ethnicities and cultures. Moreover, companies with effective diversity management programs tend to have committed and loyal employees. Employee perceptions of company image and conduct are critical to their commitment and satisfaction (Han & Han, 2009). When they perceive their organisations to be just and fair, they tend to have faith in their policies, including their organisational changes and HR efforts. Employee resourcing is important to adding value to workplace performance, as well as in developing ethical cultures in organisations. Ethics pertains to the rules of conduct that are accepted to be appropriate for particular professions or areas of living. Ethics, however, is a controversial topic because some companies “embrace” it in public, and yet they also use it sparingly. Collier and Esteban (2007) studied the connection between corporate social responsibility (CSR) and employee commitment. They asserted: “Motivation comes first; commitment reinforces and embeds it” (p.22). They argued that CSR can help motivate employees to adopt positive attitudes and behaviours that develop organisational commitment. Organisational commitment, in part, can improve their individual and group performance, which shape organisational effectiveness. For NHS, employees can have positive feelings for their organisation that they see as fair and diverse. Because of these sentiments, they can connect more to the brand and may become more in tune with organisational goals and strategies. The same applies to Google. It has a simple motto of “Do no evil.” The bottom line is ethics that transcends profitable goals because importance is supremely placed on acting ethically in the workplace. Bondy, Moon, and Matten (2012) studied CSR “as an institution” within multinational corporations (MNCs) in the UK (p.281). They conducted semi-structured interviews with 38 personnel who were responsible for developing and implementing CSR strategy in their organisations. They learned that CSR has become an institution for MNCs. Ethics has been constant attitudinal and behavioural targets for many firms. Numerous companies are seeking to be seen as responsible corporate citizens, as firms that care for the environment, employees, customers and other stakeholders. Limitations. Employee resourcing has its limitations in affecting performance, especially when HR policies are disconnected with practices because of cultural and management problems, among others. Politics can derail employee resourcing goals. For instance, HR managers might desire diversity management, but the board generally want more white employees than minorities because of racist notions. The politics in this example will hamper HR’s diversity management efforts because HR might be pressured to hire more whites than minorities instead. In addition, HR policies must be implemented properly, even if it means pursuing organisational cultural changes. Davis and Scully (2008) asserted the role of resourcing that connects individuals to departmental/organisational goals. Employees must be prepared and trained to handle changing goals and objectives where HR achieves this through diverse recruitment and selection strategies that emphasise the attitudes of flexibility, openness to change, innovation and creativity. Defining these concepts and how they can be monitored and measured can be problematic when management and HR management have ideological differences, for instance. Differences in universal and contingency HR models may impact actual HR practices. Apart from problems with employee resourcing, business ethics can have a gap between reality and targets. Bondy, Moon, and Matten (2012) were disappointed because of the CSR notions of UK MNCs that focus on superficial applications. Stakeholder concerns were not strategically integrated into CSR goals, and so CSR outcomes are woefully divergent from what concerned stakeholders expect. Ethics begins with communication and is processed through negotiation and consultation. As a discourse system, HR managers struggle in balancing HR, stakeholder and company objectives. Differences in degrees and kinds of commitment to ethical values, for instance, can affect HR planning and implementation of resourcing activities. Google has wanted to form a stronger presence in China, but the latter’s censorship and restrictive rules have dampened the former’s efforts. Apparently, in doing no evil, noble business and social objectives may be affected, and companies have to make choices and priorities. Employee Development This report proceeds to discussing employee development’s contribution to value in the workplace. Aside from resourcing, employee development has significant benefits on individual performance, especially employee motivation and commitment (Ghebregiorgis & Karsten, 2007). Development efforts include orientation, training, coaching, mentoring and other activities that aim to improve employees’ KSA. Definitions. Armstrong (2008) underlined that employee development seeks to prepare people to effectively and efficiently perform their jobs. It concerns HR strategies that boost learning and motivation (Armstrong, 2008, p.222). Furthermore, employee development ensures management succession and the achievement of present and future human resource needs (Armstrong, 2008, p.222). Iles (2007) defined employee development in terms of talent management, where it is a “tool to strengthen organisational capability through individual development, performance management, career development and succession planning” (p.106). Employee development is then individual and company-centred at the same time. HR managers face the arduous task of balancing individual career desires and actual employment needs of the company. Benefits. Employee development can ensure company success because it drives retention and training/education strategies. Iles (2007) talked about the war for talent that is happening around the world, as companies vie for competitive and talented managers and employees. Others use salaries as bait, while a number focus on offering job security and opportunities for growth and development. Google, for instance, attracted employees from Microsoft and IBM because of the openness and creativity of its cultural environment. Google represents innovation and freshness that many employees aspire for in their workplaces. Ghebregiorgis and Karsten (2007) examined employee reactions to human resource management (HRM) and performance. They conducted a survey of 252 employees from eight firms. After conducting interviews, their findings showed that employee perceptions impact the assessment of HRM systems. Ghebregiorgis and Karsten (2007) learned that participants had positive perceptions of “grievances handling procedure, promotion from within, proper staffing, quality of training, reasonable compensation in line with firm standards and paid vacation and sick days” (p.735). They believed that companies could do better in relating training to career development and salary increases. Positive perceptions were then related to positive attitudes to HRM and the organisation. Employee development can nurture these positive ideals and attitudes through connecting talent management and HR and business strategies. Limitations. Employee development must be connected to employee goals and realities of resources and politics. Iles (2007) noted that power and politics impact employee resourcing, including development (p.98). Indeed, politics can be a powerful force that affects training and development options and directions for employees. For instance, in the UK, the NHS is affected by the call for recruiting more EU employees. In other countries, such as Singapore and the United Arab Emirates (UAE), their policies for the localisation of employees affect international resourcing and development plans. Some MNCs, for instance, may still prefer expatriates or migrant workers because of work ethics and payment issues. In addition, organisations deal with the challenges of developing employees, while considering internal and external political actions and policies. They cannot decide unilaterally, or in some cases, the management can clash with the board or the line management with the top management, when it comes to developing human resources. These challenges can hamper organisations from attaining desired HR outcomes, as well as organisational effectiveness. Recommendations To enhance diversity management in employee resourcing, a clearer connection between HR activities and performance must be attained. This includes determining what dimensions of performance HR wants to influence. Guest (2011) asked for studies that emphasise long-term effects, not just short-term impacts. He suggested the use of high-performing HRM: The alternative is to offer a form of ‘high performance HRM’ that is distinctively different from ‘high commitment HRM’ although, as noted earlier, it is not at all clear what this might look like. If we adopt a contingency model, then we need to consider under what conditions certain practices are likely to be more effective. And if we prefer a configurational approach, the question is what combinations of practices can be effective in given circumstances. It may be that these questions are ultimately unanswerable; but it is probably too early to give up on them. (Guest, 2011, p.8). HRM must be connected more to performance by finding relationships between goals and strategies. At the same time, firms must continue evaluating HR policies and practices and comparing goals with actual outcomes. Again, performance is the centre of evaluation. Without improvements in performance, HR managers must be flexible enough to make the necessary changes, or to recommend organisational changes, which can help attain a better fit between HR and performance, in this case, resourcing and performance. Ethics can be connected to performance more, if organisations study these connections first and how they can be enhanced. Craft (2010) suggested interactive and continuous ethics development. Ethics awareness and development must be a continuous learning effort. HR managers must train managers to be ethical leaders who inspire their employees to think and act ethically as well. HR must also revise and improve the interactivity of ethics training, so that they can engage and motivate employees to be ethical members of their firms and communities. Collier and Esteban (2007) expressed the connection between employee commitment and CSR, and companies must capitalise on that. They must constantly evaluate the ethical climate and reward ethical behaviours. At the same time, they must punish unethical behaviours according to degrees of ethical lapses, which are based on a sound code of ethics. A code of ethics is not enough without communications strategy and development. Ethics must be embedded in individual and company performance, where CSR audits are accurate, objective and persuasive. Otherwise, stakeholders will see CSR as lip service. Resourcing and development can be strong value-adding activities, particularly when they are correlated with other performance dimensions. In theory, HRM directs firm performance through three ways. Huselid (1995) explained that HRM practices: 1) augment employees’ knowledge, skills, and abilities (KSAs); 2) stimulate employees to use their KSAs for the firm’s benefit; and 3) empower employees to do their jobs. Liu et al. (2007) underscored that “a high level of KSAs among employees is essential for employees to perform work tasks effectively” (p.504). They must go beyond routines and understand how their work affects others and the organisation as a whole. Liu et al. (2007) stressed that “much of the history of HRM practice and research has focused on motivating employees to exert discretionary effort” (p.504). Employees must be motivated to go an extra mile for organisational goals. In addition, organisational structures and job design must support employees (Huselid, 1995). Resources and systems must allow them to do their job effectively and efficiently. Liu et al. (2007) determined thirteen HRM practices that researchers showed to be antecedents of firm. See Figure 1. It shows that HR practices have a modest impact on many performance measures. In particular, training and selection can result to KSA-enhancing practices. For instance, if NHS wants to hire more “local” healthcare professionals, they can do so by improving compensation and developing employees to fill in future job demand. If they want to manage diversity further, they must have empowering practices. These include grievance procedures and participation programs. Flextime and other work design options can ensure that NHS meets both diversity and local demands. Moreover, NHS can use promotion and development to boost motivation. Employees can be motivated through various means, including the perceptions of justice, equality and fairness at the workplace that diversity management strategies can attain. Figure 1: The Value of HRM to Performance Source: Liu et al. (2007, p.505) Employee development efforts can be enhanced through high-performing perspectives that emphasise learning and collaboration. High-involvement work practices can enhance retention and employee productivity (Guthrie, 2011). Several studies showed that high-involvement work practices can improve retention for highly talented employees (Guthrie, 2011, p.181). High-involvement jobs are costly and it becomes more critical to reduce turnover at this point. Firms can attain sustainable competitive advantage by producing value in a rare and inimitable way (Guthrie, 2011, p.182). An HR system drives sustainable competitive advantage by assisting in a creation of a workforce whose effects are “valuable, unique, and difficult for competitors to imitate” (Guthrie, 2011, p.182). NHS can enhance competitiveness trough a “value-adding employment system, high-involvement work practices can contribute to competitive advantage” (Guthrie, 2011, p.182). High-involvement can be attained through: 1) boosting participation within and among departments; 2) teaching empowering processes and skills to leaders and managers; and 3) developing systems and policies that allow maximum participation and empowerment. HR has the task of developing organisational capacities that lead to competitiveness. High-involvement must start in HR officers, as well as organisational managers too. The key is using bottom-up discussions and relations to improve top-bottom plans and outcomes (Guthrie, 2011, p.182). For the NHS, they can attain their HR goals by balancing organisational and environmental goals. They can continue recruiting immigrants, while increasing local employment. They can improve the availability of competent healthcare professionals through being more active in medical and healthcare schools and training centres, where they inform the latter of existing and present job and KSA needs and goals. At the same time, they should lobby for diversity management, where they will discriminate against talented and dedicated minority employees. Conclusion Employee resourcing and employee development add value to modern organisations, especially diverse and international ones, because they affect employee commitment, motivation, productivity and creativity. Employee resourcing includes issues of diversity management and ethics development that can be used to recruit and hire ethical competent employees. Diversity management is decisive for MNCs that serve diverse customers. They use diversity to further creativity and innovation at the workplace too. Modern dynamic workplaces need new ideas constantly to enhance its organisational capability that diversity management can contribute to. Moreover, ethics is critical to moulding ethical climates and cultures. As customers and governments demand for honest and transparent companies, which care and respond to diverse stakeholders, companies are pressured to have CSR frameworks. These frameworks must not be surface level and must be embedded in the organisational culture through constant and interactive ethics training and evaluation. In addition, employee development ensures the training and retention of competent employees. Training and career planning that coincide with individual aspirations can support resourcing and performance objectives. High-performance HR policies can result to highly engaged and motivated employees. Altogether, HRM cannot promise causative relations with performance, but through strategic employee resourcing and development, it can facilitate improvements in organisational performance. References Armstrong, A. (2008). Armstrong's handbook of strategic human resource management (5th ed.). UK: Kogan Page. Bondy, K., Moon, J., & Matten, D. (2012). An institution of Corporate Social Responsibility (CSR) in Multi-National Corporations (MNCs): Form and implications. Journal of Business Ethics, 111(2), 281-299. Collier, J., & Esteban, R. (2007). Corporate social responsibility and employee commitment. Business Ethics: A European Review, 16(1), 19-33. Craft, J.L. (2010). Making the case for ongoing and interactive organizational ethics training. Human Resource Development International, 13 (5), 599-606. Davis, A., & Scully, J. (2008). Strategic resourcing. In The Aston Centre for Human Resources, Strategic Human Resource Management (pp.95-128). UK: CIPD. Retrieved from http://www.cipd.co.uk/NR/rdonlyres/A194A40D-A478-4F57-8270-EA4E2836AAF9/0/9781843981718_sc.pdf Ghebregiorgis, F., & Karsten, L. (2007). Employee reactions to human resource management and performance in a developing country. Personnel Review, 36(5), 722-738. Guest, D.E. (2011). Human resource management and performance: Still searching for some answers. Human Resource Management Journal, 21(1), 3-13. Guthrie, J.P. (2001). High-involvement work practices, turnover, and productivity: Evidence from New Zealand. Academy of Management Journal, 44(1), 180-190. Han, J., & Han, J. (2009). Network-based recruiting and applicant attraction in China: Insights from both organizational and individual perspectives. International Journal of Human Resource Management, 20(11), 2228-2249. Huselid, M.A. (1995). The impact of human resource management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal, 38, 635–72. Iles, P. (2007). Employee resourcing and talent management. In J. Storey (Ed.), Human resource management: A critical text (pp.97-112). London: Thomson. Liu, L., Combs, J.G., Ketchen, Jr., D.J., & Ireland, R.D. (2007). The value of human resource management for organizational performance. Business Horizons, 50, 503-511. Martín-Alcázar, F., Romero-Fernández, P., & Sánchez-Gardey, G. (2012). Transforming human resource management systems to cope with diversity. Journal of Business Ethics, 107(4), 511-531. Paauwe, J. (2009). HRM and performance: Achievements, methodological issues and prospects. Journal of Management Studies, 46(1), 129-1412. Qaisar, M.U., Qaiser, M.I., & Rehman, M.S. (2012). HRM-performance relationship: An empirical study of law enforcement officers in Pakistan. Mustang Journal of Business & Ethics, (3), 43-60. Triguero, R., Peña-Vinces, J., González-Rendon, M., & Sánchez-Apellaniz, M. (2012). Human resource management practices aimed at seeking the commitment of employees on financial and non-financial (subjective) performance in Spanish firms: An empirical contribution. Journal of Economics, Finance & Administrative Science, 17(32), 17-30. Wilson, F. (2008). Meeting the challenges of global resourcing. Strategic HR Review, 7(2), 5-10. Read More