Managing Human Capital - Coursework Example

? MANAGING HUMAN CAPITAL Table of Contents Executive Summary 4 Introduction 5 Analysis of Company background and current challenges/issues they are facing 6 Analysis- Literature Review 7 Process 12 Primary Research 12 Research Strategies- Quantitative and Qualitative Research 13 Data Collection Methods and Techniques 13 Data Analysis and Discussion on findings 14 Quantitative Analysis 14 Qualitative Analysis 19 Conclusion 19 Recommendations 20 Appendix 22 Questionnaire 22 Reference 25 Bibliography 28 Executive Summary The project begins with a brief introduction of Emirates the famous international airline based in Dubai. It is seen that the company has been known for its service quality towards customers, however, it has been confronting with major problems in the competitive market. Analysis of the company background reveals that it has been facing with depleting competitive advantage in the market. This has been in terms of falling revenues and loss of crucial talent and problems in talent retention. The critical literature puts forth a direct relationship between the HR polices and organizational productivity. This is followed by the primary research which supplements the critical literature through primary findings. The findings reveal that Emirates HR policies and practices in the HR departments must be redesigned to cater to the immediate business needs of the organization. The redesigning must come in the form of changes in recruitment activities, change in compensation packages and aligning training modules with the aim of serving the business needs of Emirates. Introduction The project seeks to put forth the present human resource conditions in Emirates Airlines which is the largest airline operating in the Middle East flying over 2400 passengers in a week. The company’s are located around 111 numbers of cities across 62 nations in the world. It also operates three of the nonstop commercial flights from Dubai. This company has been chosen for the study as it is the fastest growing global airlines in the world and is known for the high quality of services that it provides to its customers (Emirates, 2011). Known for its advanced and improved human resource management practices the company has evolved as the being one of the most employee friendly organizations to work with. Not only does its HR practices aim to reduce costs and enable the development of learning and development, it also tries to facilitate employees’ growth and prospective in the organization. The most remarkable part of its human resource management practices is the way they are directed towards the attainment of the company’s goals and objectives (Emirates-a, 2011). The project tries to analyses the present human resource issues and challenges confronting the company. Based on the analysis it provides an action plan for the same. This is done by the development of an outline plan for the company which would contribute to its growth in business as well. The literature review presents critical analysis of how HRM practices can affect and regulate the business development of organizations and add to its goodwill. It would be presented with reference to the examples of major organizations in the world. In this context special emphasis would be provided to the Michigan model and the Harvard’s model. To supplement the above critical analysis primary research would be conducted to bring about a relationship between the HR practices in organizations and the development of its businesses. Analysis of Company background and current challenges/issues they are facing With the growing number of international airlines across the world, the organization has been confronting with a problem of employee crunch and employee retention. It is felt that the company redesigns its recruitment strategies in order to attain a competitive position in terms of attracting and retaining talents. The study suggests that Emirates Airlines must seek to develop a dedicated recruitment services team within the various departments which would ensure the attraction, retention and selection of the highest quality of the workforce which would be capable and competent to perform and project the vision of the Emirate group in the international platform. The current recruitment problem in the company gets reflected through the fact that its recruitment executives had spent substantial amount of time in Abu Dhabi looking for Arabic speaking cabin staff in order to confront with its growing recruitment problems (Arabian Aerospace, 2010). With the rapid advancement of science and technology the need for developing the skills of staff has become an imperative in Emirates Airlines. The company has felt the urgent need to develop the competencies of staff and update them with the latest of technical tools and equipments that are available. It is often felt the present knowledge and skills of its employees have become obsolete when compared with the other airlines. This has called for the urgent need to develop the talents and skills of staff. There are primarily two problems that the company’s inadequate technical expertise can lead to. Firstly the retaining of high quality talents would get difficult and employees would be tempted towards joining organizations better equipped to explore their and develop their talents. Secondly with poor and outdated talents it would be increasingly difficult for the company to implement cost effective and advanced strategies. This would eventually result in falling revenues and earnings for the company. This is because there is a strong connection between HR management and the business development strategies of a company and it is the proper integration between the two which helps it move towards it objectives and goals (ECDL Foundation, 2011, p.1). Although the company is known for being one of the highest profit earners among its competitors, it maintains its staff at low prices. The airline pegs the salaries of staff at low levels which is common for the home country but which is found to be lower than the wage rates prevailing in the United States and Europe. Although employees remain attracted to the high reputation of the company they usually end up disappointed with its salaries and structures. This has been leading to high attrition rates for the company which needs curtailing at the moment. This calls for the redesigning and developing a competitive salary structure aimed at attaining greater loyalty and faith of its existing staff (Sull, Ghoshal & Monteiro, 2005, p.3). Analysis- Literature Review This review presents critical analysis of the present practices that the human resource management departments in organizations adopt and their implications in aligning with the wider strategic objectives of the firms. Just the way it is difficult in accepting a general definition of HRM and its role in organizations, in the same way it is also difficult to accept any universally accepted model of the way human resource management practices must operate (Loosemore, Dainty & Lingard, 2003, p.38). However, some of the models which have gained widespread acceptance have been discussed in the literature. Some of these worth mentioning are the Michigan’s model and the Harvard's model. Figure 1: The Michigan Model in HRM (Source: Loosemore, Dainty & Lingard, 2003, p.38) The model approaches the HRM functions in a rather disproportionate manner. It treats a person as resources which require treatment in such a way so as to minimize cost and maximise utility. It emphasizes on the interaction among the various elements of HR such as selection, appraisal, rewards and development. He proposes that the above factors must be integrated and aligned in such a way as to provide support to the strategic direction of the organization (Loosemore, Dainty & Lingard, 2003, p.38). However as per the opinion of Cusworth and Franks, (1993), the model ignores the situational factors, the interest of the stakeholders and the notion of strategic choices. Recently the model has also been criticised on grounds of being limited to the modern organizations because it considers the SHRM functions as closed systems ignoring the competitive and hostile business environment in which organizations function (Kandula, 2004, p.3). They have advocated the merging of the internal human resource policies with the external business strategies of the organization. The advantage that the model has is that it is linked with organizational growth and market performance (Price, 2007, p.41). Also the fact that minimising cost for the employees and obtaining them cheaply, considering them as resources is recommended and appreciated. Moreover the HRM practices and planning for ensuring of the present and future employments requirements in the organization was very small as the main focus was given to the business and not to the aspect of human resource. As per the opinion of Bagshaw, (2004), such a model is likely to disintegrate in the face of intra group conflicts and diversities in groups which would consequently lead to the failure of the organization. The Harvard Model can be explained in this context for making a major contribution towards strategic human resource management through an open system model explaining how the SHRM policies influences and impacts the other organizational functions and is faces such constraints like the stakeholder’s interest, senior managers, external pressure, suppliers and customers. The model is illustrated in the figure below and presents an important relationship between the SHEM decisions, the external environment faced by the business and the performance of the organization. Figure 2: The Harvard Model in HRM (Source: Loosemore, Dainty & Lingard, 2003, p.39) The model has an advantage over the former because it considers the stakeholder’s interest and also the situational factors. This is found to be particularly crucial for the construction projects employing a wide variety of interest groups and also has huge impacts on the public at large. In this case the mutual interdependence between those who are involved, those who remain affected and those who are capable of influencing the outcome of the project must be taken into consideration though the right strategic human resource management decision (Loosemore, Dainty & Lingard, 2003, p.39). These decisions would be contingent upon the wider situational factors like the conditions of the internal and the external labour market, the greater interests of the stakeholders in the organization like the employees employed in the projects and who stand a chance to be affected by the project’s success. These are some of the factors which must influence the SHRM decisions which would consequently define the extent of success or failure of the adopted approach (Loosemore, Dainty & Lingard, 2003, p.39). Researchers have criticised the model on the fact that it is not clear about the nature of the causal chain even though it considers the stakeholders and the environmental influences. Thus it can be said that it has limitations about explaining the ways SHRM can be regarded as a strategic function (Loosemore, Dainty & Lingard, 2003, p.39). A key focus within the purview of research and development of human resource management has been on the analysis of large scale quantitative data for testing the relationship between the HRM policies and practices and the organizational performance. A number of studies were conducted in the manufacturing sector and also on the entire economy with the use of a number of conceptual approaches. Guest (1997) and Wood (1999) have provided a concrete summary of the analysis of the studies conducted. Strategic synergy, integration and fit are some of key concepts which has been running across the human resource management theories and which requires emphasis on one of these key concepts to be adopted properly to be effective. Firstly the various human resource management practices must be coherent and must complement one another. Secondly it is required that there is a fit between the various HRM concepts in the organization and the other systems existing. It is also required that the human resource management system must be aligned with the strategic objectives of the organization. Lastly the HRM practices must be compatible in the environment in which it is operating. The models have demonstrated a symbiotic relationship between the various HRM practices and policies and the performance and productivity of organizations (Cooke, 2000, p.5). Salaman (1992), and Tyson (1997) are of the opinion that the organizational HR practices are typically concerned with the ways of managing people or employees who assist in the attainment of organizational goals and objectives. In other words, organizational performance, in terms of productivity and revenue necessarily depends on the ways people are managed and guided towards goals attainment and realization (Khosrowpour, 1998, p.220). In this regard the concept of high performance organizations have emerged lately. Although there is lack of adequate consensus on the constitutions of a high performance management system the wider argument is that the HRM practices can improve organizational performance by the increasing of employee’s abilities and skills, promotion of positive attitudes and enhancing motivation among employees and by providing the employees with a wide variety of responsibilities which exploits their skills and abilities completely and fully and explores their potential fully (Bacal, 1999, p.2). The routes of moving from the HR practices to the performance forms the basis on which organizations can be categorized as good or ‘high performance organizations’ (Cooke, 2000, p.5). Process The research process includes qualitative as well as quantitative techniques. The literature review makes a critical analysis of the scientific literature on the subject. This is mainly done using research and academic articles which presents the various arguments for or against the research topic. In order to complement the findings present in the literature review, the project conducts a primary research on the subject. This is done using the method of questionnaire in which 50 employees belonging to the management cadre of Emirates are interviewed. The questionnaire consists of both open and close ended questions framed with the intention of highlighting both the qualitative aspects as well as the quantitative aspects of the study. Questions are framed to cover the various aspects of human resource management practices that are adopted in the organization and their relevance to the business strategies of the same. Finally the findings are presented in the form of graphs and charts and explained in details in the project. Primary Research Primary research conducted in the organization is the support the findings of the critical analysis to provide a hard core analysis of the correlation between the HRM practices in Emirates Airlines and its performance and productivity. The primary research is conducted using the method of questionnaire. This questionnaire is distributed among the management of the organization to be filled up. The use of primary research in the project is to gather and collect information to facilitate further analysis into the subject. The sample chosen for the survey is 50 employees belonging to the management cadre of the organization. Based on their response towards the questionnaire a direct relationship would be arrived at through the use statistical tools and techniques which would be represented by graphs and charts (Rys, Meyer & Sebranek, 2010, p.105). Research Strategies- Quantitative and Qualitative Research Research strategies cater to the explanation of the strategies to be used in the research. The questionnaire developed would include a set of both open and close ended questions. The open ended questions would be useful for catering to the qualitative aspects of the study while the close ended questions would be primarily used for highlighting on the quantitative aspects. Qualitative techniques are used as it allows more flexibility and spontaneity in the process of the research. It allows the researcher to promptly respond to the answers provided by the candidates. Thus he can subsequently frame the next question based on the former answers. The inclusion of the open ended questions also allows the inclusion varieties of answers which could be analysed from different perspectives to arrive at a comprehensive view on the subject. Also the open ended questions lead to the generation of answers which are rich and explanatory in nature. Moreover the responses collected this way are found to be meaningful and unanticipated and without from any kind of prior preparation. This allows spontaneous view on the subject (Family Health International, 2006, p.5). Data Collection Methods and Techniques Both primary and secondary sources are used for the collection of data for the study. Secondary sources would include articles, journals, academic books and electronic sources which are considered authentic and also in which data has already been collected and gathered. The collection of primary data is done using the questionnaire method. The questionnaire is distributed among a sample of 50 managers in Emirates. Questions are framed with the aim to bring about a relationship between the HRM practices used and their implications in the organization in terms of its productivity and performance. Managers are also interviewed on the open ended questions in which any kind of query or ambiguity arising in the minds of the respondent is addressed on the spot immediately. Data Analysis and Discussion on findings The analysis to the questionnaire is done on the basis of responses collected through the method of questionnaire. The following pie charts would reflect the same and provide a relation between the HRM practices in Emirates and their impacts on the performance and productivity of organizations. Quantitative Analysis The responses that followed revealed that a clear majority o 84% of the managers interviewed declared that training programs in the organization focused on the various qualitative aspects of employees. As it is understood that quality is one the most important and basic aspects on which stands the chance and extent of success of organizations, emphasis on this particular aspect highlights the chances of rapid growth of Emirates too. Thus a relationship can be derived from the fact that quality drives success and growth of the company’s business. Going the by responses from the above chart it is seen tha 76% of the managers have agreed to the fact that the trainings needs analysis conducted in the organization are considered to be realistics and are aligned with the strategies in business of the same. It highlights the fact the training programs are designed in the organization as per the needs of the organization at that point of time. Organizational output and productivity might be based on such aspects as human resource requirements, technical expertize and skills of the human resource, rates of attrition, etc. It is crucial that training programs are conducted so as to reflect the immediate requirements of the organization so that the difference in results between before and after the training programs get reflected through the organizational results. It is apparent from the response of the management of Emirates that the performance management system measures the performance of employees through measurable units. This is because when the results are quantified and obejctive they can yield such results which are also the same. When employee performance are measuired in quantitative units it helps in reflecting the exact extent or degree of trainings needs of the same. It also helps to identify th key areas which needs training and emphasizing. Also after implementation of the training programs the performance of the employees can be measured in actual quantifiable units which reflercts the exact extent of the improvement or advancement (Hiam, 1999, p.254). Managers have also universally accepted to the fact that their compensation program in the organizations are directly linked with the performance of employees. This throws light on the fact during high performnace employees are paid more while in low performance they are paid less. The system of incentives is a common way of compensating employee as per their performance and productivty. Not only helps to motivate employees to perform better but also allows making their performance quanitfiable and responsive to the copany requirements (Stoner, 2000, p.3). The extent and success of te system of appraisal also depends on the performnace of employees at that point of time. The fact that profit sharing is regarded as imperative during the times of high performance for rewarding the employees reflects a direct link between human resource practices and organizational output and productivity. Most managers have declared that it uses the system of profit sharing for rewarding employees during the times of high performance. The notion that the organization has earned profits is considered as indication that the performance of employees have improved or enhanced. Moreover it also shows that the performance and productivity of employees are the main factors behind the organization attaining immense success. Thus when this profit is shared among employees not only does it motivate them but also serve as a driver towards better performance and success. This it is apparent there must be a clear link between the human resource management practices and the performance indicators for the policies to be successfully implemented. It must also be realized that low profitability leads to reward dissatisfaction and de-motivation among the employees (Shields, 2007, p.420). Qualitative Analysis The response to the open ended questions throws light on the quantitative aspects of the research. Training and development is considered to be one of the most important aspects of the human resource management practices in organizations. Training is considered to be one component which can be directly associated with productivity and output (Weil & Karina, 2008, p.76). Managers are of the opinion that training and developmental activities must be designed as per the desired levels of performance of a candidate and his actual performance. Moreover the desired level must be aligned with the goals and objectives which the organization seeks to achieve. The situation in Emirates is the same. Training modules are suited towards attainment of organizational goals and objectives through enhanced productivity of employees. Managers have also shown their positive response towards the compensation structures and its relation with employee productivity. They have primarily emphasized on the importance of incentive based compensation systems in which employees would be paid as per their performance. They have recommended the system as this would have a direct relationship with the company performance and also motivate employees towards higher goals if their performances were recognised and rewarded. They have recognised the concept of pay for performance for raising productivity and cutting labour costs in the competitive global environment (Daft & Marcic, 2010, p.310). Conclusion From the above study it can be concluded that Emirates has been confronting with increasing competitive pressure arising out of the external changes and competition in the global scenario. Pressure has been creeping in terms of keeping its employees satisfied, maintaining their performance or even recruiting the right candidates. This has been lowering profits and earnings of the company. The critical literature various arguments and aspect which proves that human resource management functions play a crucial role in the effectiveness of strategic decision making of firms. The HR policies and practices directly shows through the organization’s productivity and performance which makes it all the more important to align HR activities with the business goals and objectives. The primary research conducted also reveals that managers are supportive of the fact that HR policies like compensation practices, training programs or recruitment activities has a direct role to play in the organization and thus must be aligned with the company’s business strategies in order to be successful. The sole attempt put forth by the managers is to make Emirates more competitive in the international market in terms of HR talent and potential, compensation packages and employee growth prospects through training and developmental activities. Recommendations The recommendation includes presentation of the outline for the company for resolving its present human resource management crisis. The plan outline for Emirates would begin with a staffing strategy for the company. Staff would comprise of the front end staff, marketing executives, HR executives and field executives. Recruitments and selection process must be completely based on candidates’ performance in the entrance tests and their educational background and its relevance in the organization. The rationale is that it is the employees who attributes to the success or failure of the organizations. Thus candidates must be recruited carefully to handle the present employee crunch in Emirates (Catano, 2009, p.15). Secondly the recruitment process must be followed with a proper system of induction training for the new employees and training and development activities for the already existing employees in Emirates. The company needs to impart adequate technical expertise for updating employees with the changes in the external and technological changes (Robertson, Callinan & Bartram, 2002, p.120). This calls for technical skill up gradation which can be done either through on the job or off the training programs. It is important that skilled expertise re hired for providing then training. The subsequent crisis that Emirates has been facing is with the retention of the talents. With the emergence of global competitors, more and more employees have been leaving the organization at better compensation. This calls for the redesigning of its compensation structure. Offering a better and competitive salary structure would help to attract qualified talents and retain them. However, the compensation system must comprise of an incentive based incentive system which would further be based on performance. Most importantly it is crucial to align the desired employee performance with the goals and objectives of Emirates (Henderson, 2009, p.377). Appendix Questionnaire Name: Age: Position: Department: Part A 1. Our organization conducts regular training programs on different aspects of quality a. Highly disagree b. Disagree c. Indifferent d. Agree e. Highly agree 2. The needs for training identified are realistic, useful and are aligned with the business strategies in the organization a. Highly disagree b. Disagree c. Indifferent d. Agree e. Highly agree 3. The system of performance appraisal in your organization measures the performance of employees on the basis of objective and quantifiable results a. Highly disagree b. Disagree c. Indifferent d. Agree e. Highly agree 4. The data collected in the system of performance appraisal is used for making decisions like training, compensation and job rotation a. Highly disagree b. Disagree c. Indifferent d. Agree e. Highly agree 5. The compensation for employees are directly linked with their performance a. Highly disagree b. Disagree c. Indifferent d. Agree e. Highly agree 6. In your organization profit sharing is used as a system of rewarding employees for high performance a. Highly disagree b. Disagree c. Indifferent d. Agree e. Highly agree Part B 7. How, in your opinion does training and development practices help in enhancing and improving organizational productivity and performance? 8. Mention some changes in the compensation structure which would help attain organization goals and objectives? Reference Arabian Aerospace. (2010). Emirates looks to Abu Dhabi to fill Arabic speaking crew gap. [Online]. Available at: http://arabian.silkstream.org/article.php?section=people-recruitment&article=emirates-looks-to-abu-dhabi-to-fill-arabic-speaking-crew-gap. [Accessed on August 02, 2011]. Bacal, R. (1999). Performance management. McGraw-Hill Professional. Catano, V. M. (2009). Recruitment and Selection in Canada. Cengage Learning. Cooke, F. L. (2000). Human Resource Strategy to improve Organizational Performance. A Route for British Firms. [Pdf]. Available at: http://www.leeds.ac.uk/esrcfutureofwork/downloads/workingpaperdownloads/paper9.pdf. [Accessed on August 02, 2011]. Daft, R. L. & Marcic, D. (2010). Understanding Management. Cengage Learning. ECDL Foundation. (2011). Emirates Airlines: Staff Career Development Support in the Private Sector. [Pdf]. Available at: http://www.ecdl.org/media/EmiratesAirlines1.pdf. [Accessed on August 02, 2011]. Emirates. (2011). Emirates Loyalty Services. [Online]. Available at: http://www.theemiratesgroup.com/english/our-brands/loyality-reward-programmes/emirates-loyalty-services.aspx. [Accessed on August 02, 2011]. Emirates-a. (2011). The Emirates Group. [Online]. Available at: http://www.emirates.com/english/about/the_emirates_group.aspx. [Accessed on August 02, 2011]. Henderson, R. I. (2009). Compensation Management in a Knowledge - based World. Pearson Education India . Hiam, A. (1999). Streetwise motivating & rewarding employees: new and better ways to inspire your people. Adams Media. Kandula, S. R. (2004). Human Resource Management in Practice: With 300 Models, Techniques and Tools. PHI Learning Pvt. Ltd. Khosrowpour, M. (1998). Effective utilization and management of emerging information technologies: 1998 Information Resources Management Association, International Conference, Boston, MA, USA, May 17-20, 1998. Idea Group Inc (IGI). Loosemore, M., Dainty, A. & Lingard, H. (2003). Human resource management in construction projects: strategic and operational approaches. Taylor & Francis. Price, A. (2007). Human Resource Management in a Business Context. Cengage Learning EMEA. Robertson, I., Callinan, M. & Bartram, D. (2002). Organizational effectiveness: the role of psychology. John Wiley and Sons. Rys, J. V., Meyer, V. & Sebranek, P. (2011). The Research Writer: Curiosity, Discovery, Dialogue. Cengage Learning. Shields, J. (2007). Managing employee performance and reward: concepts, practices, strategies. Cambridge University Press. Stoner, J. A. F. (2000). Principles of Management. Pearson Education India. Sull, D. N., Ghoshal, S. & Monteiro, F. (2005). The Hub of the World. [Pdf]. Available at: http://bsr.london.edu/files/245/spr%2005%20p35%20Sull%20et%20al.pdf. [Accessed on August 02, 2011]. Weil, D. M. K. & Karina, W. D. M. (2008). Intuition in Decision-Making: American and Brazilian Banks Leaders' Perceptions and Practices. AuthorHouse. Bibliography Andrews, R. (2003). Research questions. Continuum International Publishing Group. Buckley, R. and Caple, J. (2007). The Theory and Practice of Training. Kogan Page Publishers. Cole, G. A. (2002). Personnel and human resource management. Cengage Learning EMEA. Finn, T. (1999). Valuing and Managing Diversity. American Society for Training and Development. Glanz, B. A. (2002). Handle with care: motivating and retaining your employees. Handle with care: motivating and retaining your employees. Martin, J. (2002). Organizational culture: mapping the terrain. SAGE. Paton, R. (2005). Handbook of corporate university development: managing strategic learning initiatives in public and private domains. Gower Publishing, Ltd. Peterson, B. (1998). Training needs assessment: meeting the training needs for quality performance. Kogan Page Publishers. Schein, E. H. (2004). Organizational culture and leadership. John Wiley and Sons. Stoner, J. A. F. (2007). Management. Pearson Education India. Read More