Leadership and Human Resources Management - Evidence of Best Practice - Essay Example

1. Evidence of “Best Practice”, Human resource system being in place with the organization. Introduction Defining Best Practices `Best Practices` of any organisation refers to the most effective action taken by the parent organisation to make the HR practices consistent across all its location and offices. Best practise approaches to HRM denote that there is a universal one best way to manage people. By adopting best practice approaches an organization sees enhanced level of commitments from employees which leads to improved organizational performance, higher quality of service, increased productivity and profitability. Best Practices in employee benefits may include insurances, career related benefits, paid leave and retirement, health promotion and other family friendly benefits. Deregulation in many of the European countries have led to less collective arrangement for employees and more employee benefits at an organizational level . Most of the recognized organizations all over the globe have: (Rioux, Bernthal, Wellins,) Developed a long termed HR plan for complete alignment of its HR strategies and objectives with the company objectives. Centralized reporting relationships have been created around the globe. Standardized compensation, development and assessment practices. Granted autonomy of job to the HR function in different regions. Created global policies and processes for performance management, data management, compensation, development and education. Tied performance management to regional accountability Shared the best HR practices used in certain location with all other locations. Developed HR mission statements. Integrating Best Practices with the Human Resource System `Best Practices` within an organization has often been linked to the Human Resource system that is being adopted by any particular organization. Human resource systems refer to the electronic tools that are used to assess and perform HR related information and functions respectively. Human resource system enables the HR staff to execute all the HR related activities such as personnel actions and job announcements. `Best Practices` of HR in Marriot International U.S.A Marriot International has adopted various innovative HR practices which has earned it the reputation of “the best place to work” in the hospitality industry. Marriot`s spirit to serve has in fact guided its various HR initiatives. The company has reaped several benefits because of its employee friendly HR practices. Company Profile J. William Marriot had set `The Hot Shoppe` in Washington in 1927 where hot food was served along with root bear. In 1937 Hot Shoppes ventured into airline catering services at Washington Airport. Over the next three decades Hot Shoppes diversified its business into many other service management sectors and in 1967, its name was changed to Marriott Corporation. In 1982, Marriot acquired Host International and became the largest operator of airport terminal food, beverage and merchandise facilities in the US. With the acquisition of Saga Corporation in 1986, Marriot became the largest food management company in the US. Marriot has also diversified into moderate price segments of hotels under the brand name of `Courtyard`. Today Marriot is a product of the metamorphosis that began fifteen years ago. Five major trends that can define the organisation are: Segmentation of hotel business Globalization of the Marriot lodging Catering to the changing needs of the guests Extending Marriot`s hospitality to senior markets Turning the support functions into business opportunities (Green, Maxwell, Watson, 219) `Beat Practices` creates Competitive Advantage Marriot has always been known for the compassion it has for its employees. It started with the founder, J Marriot who counselled the employees on their personal problems, kept them posted about the latest happenings within the organization and provided them with excellent training. He made his mangers responsible for the satisfaction of his employees. Apart from providing the employees with a competitive pay package, Marriot strives to give its employees a quality work life, good leadership, friendly work environment, better growth opportunities, adequate training. It is this emphasis on non monetary factors that has helped Marriot to retain its employees for a longer period of time. The HR practices have provided Marriot with a competitive advantage because they have spent years in carefully studying, perfecting and redesigning the HR practices and policies. As a result they have been successful in creating a system of well trained staff that is capable of delivering higher level of service. Their system and processes of training new employees enables them to inculcate in the new workers the skill and knowledge that are required to consistently deliver the desired performance. All throughout they have focussed on creating a unified system of HR practices and policies that is well documented and quickly learned by the employees (Abraham Pizam, 2010). The performance management system at the Marriot measures the performance of each individual in context of the mission of Marriot. The performance at Marriot is described in terms of the balance scorecard which is customer focussed process and planning improvement system that translates there strategy into an integrated set of non financial and financial measures. Marriot is committed to balance scorecard approach and there are four universal performance measures that guide the work of all their staffs. Satisfaction ratings are conducted once a year. These ratings provide important feedback during the performance appraisal system of the managers. Each year, the associates are appraised, but the appraisal process varies according to the employment category within the hotel. After information from the balance scorecard is compiled for a year, the associates are assessed on past twelve months achievement, and their goals for the next twelve months is negotiated (Green, Maxwell, Watson, 139- 140, 2002) The HR support programmes include “Advance Management Skill” course and the “Foundations of Leadership course” that involves topics such as Stephen Covey`s “seven habits of successful people”, “train the trainer”, “navigating through change”. The hotels also have a buddy system where new associates are assigned to experience staff. Such systems helps in important functions were high standards are demanded. Such programmes pose challenges for the HR Director who requires not only funding these essential programmes, but also finding time to run the programmes in the midst of hectic schedules. Managers and other staff who are on higher remuneration scale are subject to “Leadership Performance Process”. This involves the aspect of “Goal Setting” which mainly applies to the managerial staff because their area of responsibility is broader and the priorities within these borders change from time to time. 2. Appropriate level of “fit” between the overall international human resource strategy and the needs/constraints of the organisation in the countries in which the company operates. Aspects of International Human Resource Management. International Human Resource Management aims to identify and evaluate policies, programmes, processes and practices to effectively bridge individual, functional and national boundaries for creating effective structural connections, cognitive associations, interpersonal interactions (Stahl, Björkman, Morris, 501, 2012). IHRM is the management of worldwide resources. IHRM enables companies, mostly Multinational Corporations to be successful around the globe. The important objectives if IHRM are: Enabling Organizations to be competitive throughout the world Helping companies to be more efficient Helping companies to be locally responsive Enabling companies to be flexible and adaptable Enabling companies to transfer learning across the globally dispersed units. IHRM covers operational and strategic aspects and the following areas: Understanding IHRM strategies and practices in relation to the changing strategies of the international business firms. Exploring the links between implementation of the international strategies and international HRM practices and policies. Developing a comprehensive framework to reflect on the complex set of environmental factors. Examining IHRM activities to recognise their systematic interaction. Hence IHRM is the internationalization of business of business, and the HRM strategies, practices and policies that the organizations pursue to meet all it requirements for the internationalization of its businesses. Therefore IHRM is essentially concerned with the core activities of recruitment, selection, training, development, compensation, expatriation, managing multicultural team, performance management and international diversity. For most of the organizations IHRM is the most important critical success factor. While dealing with particular HR functions like compensation the international HR managers are faced with a great variety of national and international pay issues. For example, while tackling pay related issues, Headquarter based Human Resource manager must coordinate the pay system in different currencies with different countries that can change in regards to the relative value of each other over the time range. Sometimes fringe benefits provided to host country employees gives rise to certain problems. Since the HQ based managers’ deals with employees who have different cultural background, he must coordinate the policies and practices. He also has to manage expatriates from the firm`s home country, host country, and third country working in the subsidiaries around the world. In this context such globally located organizations develop HR systems which should be compatible with the company wide systems that are developed in the HQ based counterpart and acceptable to host country. These policies and practices should effectively balance the needs of the local employees, PCN`s, TCN`s (Bhattacharyya, 241-242, 2010). One of the means to ensure that HR practices are consistent with the labour market requirement is to staff HR functions with the host country nationals. It is for this reason that MNC`s fill various posts with indigenous people. Integrating IHRM to Business Strategies There are four stages of linking IHRM to implementation of business strategies. The first linkage is known as interpretation where HR and other functions consider the functional implication after the business strategy has been crafted. The second level is called inspection where the draft business strategy is considered by functions like HR before it is finalised. The third level is known as insertion where initial functional inputs are made in the business planning process. It also leads to inspection. The highest form of linkage is called full integration where the HR manager becomes a part of the senior management team (Aswathappa & Dash, 97, 2007). Factors affecting the operations of business in different countries 1. Workforce Skills- The general level of education and training of any country`s workforce differ largely between countries that are economically well developed and those which are nor that developed. This is because education and training are mostly determined by national government policies. There is also a large difference in the attitudes and policies of the employers in different countries which is again affected by national legislation. For example in some of the countries employers are required to spend certain proportion of their income on training. 2. Conditions of the employment legislation- Labour legislation affects the aspects of employment and varies from one country to another. This may include minimum wage rate, requirement of premium pay rates for overtime working, maximum permitted hours for work, lengthy consultation period, and compensation for termination of employees. Other than affecting labour costs, the legislation can also affect the organizations capability to respond flexibly to the changes in demand. 3. Organised Labour- In different countries the extent to which organized labour groups such as trade unions influences human resource practices varies immensely. In developed countries organized labour groups are more influential. In some country, trade unions are organization specific rather than depending on the employer. In European countries organization over a certain size is required by law to have work councils. This comprises of elected representatives from the workforce and has a right to be informed about the significant decisions made by the organization, especially those concerned about employment. All the above factors influence the way that can organization operates in a country. International organizations. International organizations are especially affected by these contextual factors, both of their country of origin and the countries in which they operate. Often such conditions create a dilemma for the organization in regards to whether to manage the workforce in line with local conditions or to impose globally recognized corporate standards. Local human resource management practices raises question on the ethical issues when viewed from the perspective of any other country. On the other hand if the organization applies its own corporate practices, shifting aside local conditions, it not only risks alienating its local employees, but also the wider community of that particular locale. The issue of wage rate is of utmost importance in this respect. Paying rates that is in line with the parent country results in loss of cost competitiveness in the host country. Again if host country is not paid the proper rate, there are allegations of exploitations of the host country nationals which cause job losses in parent country (Barnes, 356, 2008). IHRM crisis in Terror Prone Countries IHRM strategies face real crisis in terror prone countries. The Islamabad Marriot hotel bombing that took place on 20th of September 2008 is an example of this. On this day a truck filled with explosives was detonated in front of the Marriot hotel in Pakistan`s capital Islamabad. The incident caused serious damage to the hotel both in terms of infrastructure as well as financial. The subsequent bombing in Bali and Jakarta in the Marriot has also hampered the effort to achieve mutually security relationship with the country. The effort of developing and sustaining democratic governance with the Suharto government also collapsed. It is definitely a challenge for Marriot to maintain a friendly and open customer environment in spite of the terror attacks that it has faced. Marriot has successfully interfaced crisis management and business continuity with safety and security. Crisis in Subsidiaries While establishing their foreign subsidiaries, the strategies that were adopted by Marriot affected the degree of decentralization of authority to the subsidiaries. It adopted strategies that emphasized the similarities within different regions or standardization in operations or products that led to the decrease in demand for local autonomy (Khosrowpour, 64, 1994) Talent management in international context requires the managers of Marriot to develop a deeper level of understanding of the link between business agenda and the capabilities of the most talented people in the organization and also understand the potential for mobility of these people. This attempted calibration of talent on a global basis often requires the multicultural employees to consider talent on a global basis. IHRM Tussle in Latin America In Latin America, Marriot has also faced several HR issues. Latin America`s human resource practiser is basically person centred, meaning that HR professionals are seen more as an advocate of the service of the employees rather than an agent of the organization. This person centred HR practices creates a pressure on the performance centred view that is adopted by Marriot on a global basis. In such a scenario it is really very challenging for the management of Marriot to create a hybrid cultural environment where national and regional values along with global and local practices coexist. Modernizing HR practices in Latin America was really a difficult task for Marriot because it had to pay deliberate attention towards the social contract. To overcome the tension Marriot laid serious stress on the fact that HR mangers should be sensitive to the workers expectation that are embedded in such a social contract whenever making any change in the human resource system and this has highlighted the historical, cultural, economic, institutional environment in which an HR management develops (Elvira, Dávila, 237, 2005) 3. Elements of International HR Strategy the organization should or adapt to achieve maximum competitive advantage. To achieve competitive advantage some of the key points that an organization or MNC should follow are: They should add value in terms of per employee They should try to provide high level of training and development to its employees Try to retain key personnel Compliance with all the statutory rules and regulation of the country in which they are operating Utilizing a company`s multicultural labour pool. For example The Patriot Act provides flexibility for using emergency warrants to search hotel rooms and information about guests checking in the hotel. Under this act the federal agent of the US government have the right to obtain search warrants relating to a guest or group of guest that are registered with the hotel (Barth & Hayes, 280, 2006). Although such acts poses serious problems to the Marriot chain of hotels which are located in terror zones as it creates inconvenience for guests, yet they have to comply with such acts for the safety and security of the hotel and also their guests. Since hotel industry is a sector that is soaring at this moment, Marriot should try to enhance the economy of the underdeveloped countries where they are located by providing the maximum possible employment for the residents of that country and it should also encourage the growth of its product in the local market. Since Marriot is a large organization that has a direct impact on political, economic and social landscape of the countries in which they are located, their activities should have considerable on the individuals as well as human rights positively. They should never violate the human rights since they have more power over the individuals as their government. As they control a great amount of capital generating about one sixth of the world`s wealth, they should be careful in allocating their resources especially in third world countries. Despite of evidences that corporate activities helps in developing and improving human rights standards, there are still reports of MNC`s reacting callously and slowly in some areas. To increase its competitive advantage Marriot should adopt a soft HRM approach because it can enable the frontline staff to participate in its quality culture of trust, empowerment and engagement. It is the best suited approach for organizations in which labour is very high although the customisation is limited and the role of the staffs as the as the key players in the provision of service is of a critical consideration. Soft approaches of HRM will also help Marriot to be more employees centred since the employees are the real contributors to the growth of any firm. BIBLIOGRAPHY Rioux, S. M. Bernthal, P. R.. & Wellins, R. S., The Globalization of Human Resource Practices [Pdf]. Available at [Assessed on 1March 2013] Green, N. D`A. Maxwell, G. A. & Watson, S., 2004. Human Resource Management: International Perspectives in Hospitality and Tourism. U.K: T.J International. Pizam, A., 2012. International Encyclopedia of Hospitality Management 2nd Edition. U.K: Routledge Stahl, G. K., Björkman, & I., Morris., S., 2012. Handbook of Research in International Human Resource Management. U.K : Edward Elgar Publishing Bhattacharyya, D. K., 2010. Cross-Cultural Management: Text And Cases. New Delhi: PHI Learning Pvt. Ltd Aswathappa, K & Dash, S., 2007. International Hrm. New Delhi: Tata McGraw-Hill Education Barnes, D., 2008. Operations Management: An International Perspective, Italy: Cengage Learning EMEA. Khosrowpour, M., 1994. Managing Social and Economic Change With Information Technology, U.S.A: Idea Group Inc (IGI) Elvira, M. E, & Dávila, A., 2005. Managing Human Resources In Latin America: An Agenda For International Leaders, U.S.A: Routledge Barth, S. C, & Hayes, D. K., 2006. Hospitality Law: Managing Legal Issues in the Hospitality Industry, New Jersey: John Wiley & Sons Read More