Human Resources Management and Strategies - Research Paper Example

Question A Competitive Strategies Benchill and Sons Benchill and Sons are pursuing an overall cost leadership strategy. Their approach is to achieve the lowest cost by manufacturing and selling in large quantities. Hence, they are in a position to undercut competition because emphasis is not on quantity. It is easy to have a grip on cost by taking advantage of economics of scale. Speke Furnishings These are pursuing the differentiation strategy. Their focus is on the high quality end of the market. Their products are known for quality and customers are willing to pay a premium for their products. Such quality should be maintained to attract and retain customers. Thorn Tree Office Solutions Their strategy is focus on specification. They take order specifications from clients. In such a case, they are not in competition with the mass producers. This strategy requires innovation and time. However, two orders can be very different requiring different expertise. A model of SHRM entails the following steps. 1. Mission and goals 2. Environmental analysis 3. Strategic formulation 4. Strategic implementation 5. Strategy evaluation At our business level, the strategic management process includes activities that range from appraising the organizations current mission and goals to strategic evaluation. Given the level of competition in the furniture market, they should state their goals more precisely reflecting the volatility of the market. This first step is for senior mangers evaluating their position in relation to current mission and goals. Environment analysis looks at strengths and weaknesses the companies are facing. Use of SWOT analysis is very important. Competition is tight and a company should know its strong points, weak points, opportunities and threats. Some of these are external and internal. Bench hill and sons strong points are its ability to be a cost leader and the threat is the raging competition in the market. Strategy formulation involves senior managers evaluating interaction between strategic factors and working strategic choices that guider managers meet organizations goals. Some strategies are formulated at the corporate, business and specific functional levels. Strategy implementation focuses on techniques used by managers to implement their strategies. In particular, it refers to activities that deal with leadership styles, structure of organization, information and control systems and the management of human resources. Leadership is the most important and difficult part of strategic implementation process. Strategy evaluation determines what extent the actual change and performance match desired change and performance. Basing on Bench Hill and Sons Bench hill and sons is pursuing a cost leadership strategy. It will reduce its cost because it enjoys economics of scale. That is it buys its inputs in bulk and such inputs are standard. Furniture designs are kept simpler and this means they do not incur extra cost on design development. However to remain competitive given the fact that other companies are adopting this strategy they need to reinforce the business strategy. Basing on human resource practices Benchill and sons should do the following. Performance and Appraisal The company should form a basis of measuring the performance. It can measure either internally or externally. Internally by comparing performance of other companies in the line of business. This can be achieved by bench marking. This way, the best practice is identified and company's performance is compared against it. Appraisal should be based on results obtained. However, it should be noted that such a best practice does not always operate in exact circumstances. Areas of improvements will then be identified and necessary corrective action taken. Some companies use ABC analysis to measure the performance of the human resource. Such an analysis tends to have pre-determined targets to be achieved. Costs are assigned according to activities that are directly related to them. Nowadays may companied have adopted the balance score as a standard measure of performances. Balances scorecard tends to incorporate wholly all aspects of a business. For Benchill and Sons using balance scorecard they would strive to answer the following questions: Are we in the right business How do our customers see us Are the owners of the business satisfied with us Are we improving qualitatively and in size These four perspectives ensure that there is a balances approach to the objectives to be achieved. Resourcing and Recruitment Recruitment is the process of finding possible candidates for a job or function, undertaken by recruiters or it may be undertaken by an employment agency or a member of staff at the business or organisation looking for recruits where suitability for a job is typically assessed by looking for skills. Benchill and Sons could set up or improve human resource department. Such a department would be run by professionals. The primary role of the human resource department is to recruit appropriate personnel for the firm. Such recruitment should be based on specific skills they require of such a person. Staffing is a very important function in a company. The staffs project the firm's image. They are what client see and easily identify the company; hence appropriate staff should be recruited and retained. Having a human resource department will ensure that appropriate people are employed. It should be realized that specific skills are required for certain jobs while some jobs do not require specific skills. Other than specific skills other attributes may still be required for certain jobs. Nowadays since it is hard to get a specific, person minimum requirements are set and once such a person is employed, is trained in the company practice. In terms of recruitment and selection it is important to consider carrying out a thorough job analysis to determine the level of skills or technical abilities, flexibility of the employee required etc. It is also at this point to consider both the internal and external factors that can have an impact on the recruitment of employees. The external factors are those that are out with the powers of the organisation and include issues such as current and future trends of the labour market i.e. skills, education level, government investment into industries etc. On the other hand, internal influences are easier to control, predict and monitor, for example management styles or even the organisational culture. In order to know the business environment in which any organisation operates, three major trends should be considered and these are; Demographics: This is the characteristics of a population/workforce, for example age, gender or social class. This type of trend may have an effect in relation to pension offerings, insurance packages etc. Diversity: This is the variation within the population/workplace where changes in society now mean that a larger proportion of organisations are made up of female employees in comparison to thirty years ago. Also over recent years organisations have become more culturally diverse and have increased the number of working patterns (part-time, casual, seasonal positions) to cope with the changes in both society and the global market. It is important to note here that an organisation must consider the ethic and legal implications of their decisions in relation to the HRM policies they enact to protect employees. Employers have to be acutely aware of the rise in discrimination, unfair dismissal and sexual/racial harassment cases in recent years and the detrimental effects this can have on the employees and the organisation. Anti-discrimination legislation over the past 30 years has provided a foundation for an increasing interest in diversity at work which is "about creating a working culture that seeks respects and values difference." Skills and qualifications: As time goes, industries move from manual to more managerial professions so does the need for more highly skilled graduates. If the market is 'tight' i.e. not enough staff for the jobs, employers will have to compete for employees by offering financial rewards, community investment etc. In regards to how individuals respond to the changes in a labour market the following should be understood: Geographical spread: This is how far the job from the individual is The distance to travel to work should be in line with the pay offered by the organisation and the transportation and infrastructure of the area will also be an influencing factor in deciding who will apply for a post. Occupational structure: These are norms and values of the different careers within an organisation. Generational difference: Different age categories of employees have certain characteristics, for example their behaviour and their expectations of the organisation. Finally let it be noted that recruitment methods are wide and varied and it is important that the job is described correctly and any personal specifications stated. Job recruitment methods can be through job centres, employment agencies/consultants, headhunting, and local/national newspapers. It is important that the correct media is chosen to ensure an appropriate response to the advertised post. (Arthur, Woolcock and Sullivan, 1996) Training and Development Training and development deals with the design and delivery of workplace learning to improve performance. To enhance competitive advantage Benchill and Sons should ensure that the staff undergo training and development as they progress. Staff should attend seminars sponsored to further their education to higher levels. Training could be internal i.e. in the job or formal training in the farm undertaken by professionals. The company could also pay for the employees to train in colleges and universities in further lands for their job knowledge. When their employees return they will be in a position to contribute better than otherwise could. Development entails allowing junior staff to undertake up positions of their seniors either by delegation or as a part of a formal process in the company. If delegation is, encouraged junior staff will gain the confidence and experience to step in the shoes of their seniors. In such a case, the companies will have a pool of potential mangers and this will enhance transition. Reward In reward of human resource efforts, they should be compensated adequately. Factors affecting remuneration include level of education, experience, nature of the job and level of seniority. Many companies set their salaries based on hours work. They also have bonus systems. Rewards can also be non-cash like free transport, paid holidays and free lunches. Many companies however have adopted a salary scale based on geographical boundaries i.e. they pay their employee in line with what other employee in the same job are paid in the country. They do not want to underpay or overpay. Employee Involvement and Relations Employees should be allowed to express themselves. This can be achieved through incorporating them in committees. There should be a forum for them to air their concerns, reservations, options and suggestions. Their suggestions and options should be addressed and responded to. Employees should also be allowed to join and form trade unions. Allowing employees to engage in such forums, trade unions can easily increase their productivity. Their suggestions might be very useful in achieving high productivity levels. Question 1C The personnel department in Benchill and sons should be a full department alongside others like finance, accounting, assembling and marketing. Hence, it should be headed by a manager with equal rank with other departmental managers. Human resource managers are strategic partners in the strategy formulation. They should exploit the full potential of the human resources. The personal department is as much as it might not have many employees, it should have enough staff under the mangers to operate effectively. The personnel department staffs are also trained in human resource management so that they can operate effectively. The staff should be trained on the specific aspects of Benchill and Sons on the business environment it operates. The human resource manager is the overall in charge of the firm so that he or she knows what type of employees the firm wants at any time. PART B QUESTION 2 Performance Management Performance management is the concept measuring the output of particular process in order increase output and efficiency of the process. It is the process of assessing progress toward achieving predetermined goals, while performance management is building on that process adding the relevant communication and action on the progress achieved against these predetermined goals (Bourne, Franco and Wilkes, 2003 p.15) In organizational development, performance can be thought of as Actual Results vs. Desired Results. Any discrepancy, where Actual is less than Desired, could constitute the performance improvement zone. Performance management and improvement can be thought of as a cycle as follow: Performance planning where goals and objectives are established Performance coaching where a manager intervenes to give feedback and adjust performance Performance appraisal where individual performance is formally documented and feedback delivered (Bourne, Franco and Wilkes, 2003) Goals The primary goal of performance management is to achieve a high level of output and increase the level of efficiency. Another goal is to improve an organization's efficacy, which involves the process of setting organizational goals. According to the traditional approach, performance management has two methods of analyzing performance. These are 1. Result oriented 2. Trait oriented. The trait oriented entails appraisal of personal qualities such as cooperativeness, punctuality, leadership skills and appearance. These traits help organizations to analyze the performance of each employee. Results oriented involves analyzing sales figure, wastage rates, complains received and cost incurred by each employee. This helps in analyzing each employee capacity and his value to the organization. (Penny Hacket, 1996, p102) Performance management also involves the following; 1. Performance Improvement (a) individual level which involve processes such as statistical control (b) organizational level which involves improvement of customers satisfaction 2. Measurements of Results Achieved Performance efficiency is taken into consideration and is calculated by getting the ratio between efforts expended and results achieved. Strategic Human Resource Management According to Dubin (1976) in his theory on models of the empirical world, he argues that a strategy must help us predict the future set of certain variables and help us understand why these prediction values will result. An accurate model should allow accurate predictions in case of uncertainties. Human resource management involves enumeration of data of which employee from personal history, data, skills, capabilities. Experience and payroll records. Strategic Human Resource Principles Human resource strategies are developed around four principle areas of human resource functionalities. (a) payroll (b) time and labour management (c) benefits administration (d) human resource management (a) Payroll This entails gathering data on employee time and attendance and then calculating deductions. This will involve preparing data for the whole workforce. It may have an automatic deposits and manual cheque systems that ensure accounting information is in form of pay cycle. The payroll module automates the pay process by gathering data on employee time and attendance, calculating various deductions and taxes, and generating periodic paycheques and employee tax reports. Data is generally fed from the human resources and time keeping modules to calculate automatic deposit and manual cheque writing capabilities. Sophisticated HCM systems can set up accounts payable transactions from employee deduction or produce garnishment cheques. The payroll module sends accounting information to the general ledger for posting subsequent to a pay cycle. (Thomas and Walker, 1993) (b) Time and Labour Management This applies new technology and methods. It involves choosing methods that involves less costs. This module applies new technology and methods (time collection devices) to cost effectively gather and evaluate employee time/work information. The most advanced modules provide broad flexibility in data collection methods, as well as labour distribution capabilities and data analysis features. The module is a key ingredient to establish organisational cost accounting capabilities. (Thomas and Walker, 1993) (c) Benefit Administration It helps human resource managers to administer employee participation in benefit programs. These include insurance, health care, pension scheme etc. The module permits HR professionals to easily administer and track employee participation in benefits programs ranging from healthcare provider, insurance policy, and pension plan to profit sharing or stock option plans. (Thomas and Walker, 1993) (d) Human Resource Management This module is a component covering all other HR aspects from application to retirement. The system normally records basic demographic and address data, selection, training and development, capabilities and skills management, compensation planning records and other related activities. Leading edge systems usually provide the ability to "read" applications and enter relevant data to applicable database fields, notify employers and provide position management and position control. (Thomas and Walker, 1993) The HRMS/HCM technology replaces the four core HR activities by streamlining them electronically. While using the internet or corporate intranet as a communication and workflow vehicle, the HRMS/HCM technology can convert these into web-based HRMS components of the ERP system and permit to reduce transaction costs, leading to greater HR and organisational efficiency. Through employee or manager self-service HR activities shift away from paper based processes to using self-service functionalities that benefit employees, managers and HR professionals alike. Costly and time consuming HR administrative tasks, such as travel reimbursement, personnel data change, benefits enrolment, enrolment in training classes and to instruct a personnel action, authorise access to information for employees are being individually handled and permit to reduce HR transaction time, leading to HR and organisational effectiveness. Finally, HR professionals can spend fewer resources in managing administrative HR activities and can apply freed time and resources to concentrate on strategic HR issues, which lead to business innovation. (Arthur, Woolcock and Sullivan, 1996) Performance Management and Strategic Human Resource Management Performance management is strongly related to strategy human resource management, performance management involves operation of data, collection of data of sales of an organization. The same case in strategic management where data is collected to formulate plans according to objectives of the organization. Pm help utilize the full potential of employee to the firms advantage, therefore the management strategies should match with the firm's objectives and plans. It is also evident that competitive advantage can be achieved through having a high quality workforce that enables organizations to compete on the basis of service quality. Question 3 Role of HR Planning within the SHRM Framework SHRM involves linking the human resource functions with the strategic objectives of the organizations. The planning should go hand in hand with the strategies. Therefore, strategies at different levels need to interrelate. This involves organizational policies that match those of the markets. This can be influenced by human resource planning. Human Resource Department work in principle expected to realign their HR functions to organizational vision. However, in practice many HR departments are seldom invited by their managements to provide their HR inputs in formulating appropriate HR policy and practices. So, the human resource officers in our organisations have a vital role to play. They must understand HRM functions and responsibilities of their organization as well as know how to link it to their organizational vision. They must consider integrating the interests of their organization and employees with the overall vision of their organization. Conceptually, the SHRM goes beyond a set of coordination functions and activities of an organization's human resources. One of the fundamental ideas underlying the SHRM theory is that the organization can create a strategic fit or synergy between its HR strategies and organizational strategies. This means the organization should be able to side with its HR strategies and policies with whatever their organization might exist for. If SHRM are designed carefully, can become the driving force for organizational success. For, it is the HR that stands in the key position to influence growth and development of any organization. Variables such as customers and stakeholders, the quality of products or services, revenues or development outcomes are greatly determined by HR strategies and polices. (Boxall, 1996) The role of HR departments and human resource officers is to strategically plan on the way the employees are to assigned tasks in the whole work force. They are expected to process for promotions and trainings, maintain employee service files and work attendance. People management beyond these functions remains unexplored in many organisations. One of the precarious HR practices is that we are so used to considering this as a stand-alone system that is devoid of any meaningful relationships to other organizational functions and purpose. There are perhaps not much of latitudes left for HR departments in our present HR systems. If there is an effective planning within the HRM department then, the following are some of the HR functions, which I see would be critically important for HR departments and sections: Provide support services for the implementation of all service employee rules and regulations, performance management systems, job auditing, position reviewing, processing for promotions, transfer, leave, secondment, training, tours, etc. Providing advisories and tactical direction for the organization's recruitment and employee training and development Communicating and sharing the common organizational vision and HR strategy Promoting culture of quality service and work ethics by designing or off-shoring programmes or expertise on productivity improvement systems. Conducting organizational structure reviews and HR analysis including specific position descriptions and Developing rewards, recognition and opportunities for employee career advancement (Boxall, 1996) Low cost strategies tend to increase an organization's market share through offering lower cost per unit compared to firm's competitors. Human resource planning includes activities such as recruitment, training and rewarding personnel. Therefore, this helps an organization to achieve its set goals. Example A firm that offers certain services would like to achieve certain objectives. The firm needs to have qualified staff to undertake activities and this is achieved through improvement of qualified workforce. If the firm decides to offer benefits such as insurance, health, and retirement benefits, this will ensure a healthy and also a motivated workforce. The firm should also focus on training workers in order to improve employee skill. HR planning determines the success or failure of the organisation. The HRM department is like a backbone of the organisation because it influences coordination of all other departments within the organisation. The HRM is thus an essential part of any organization's existence and management no matter its size and nature. It is that part of management dealing directly with people. It is crucial to other functions such as information management systems, technology, marketing or public relations, research and development, procurement, and accounting or finance. HRM serves as the bridge to all other areas of management and functions. More dynamic is the organization's people management when it is built strategically to further its organizational purpose. It is a fallacy to construe and regard people management as something disconnected in its function. The HR as human resource's job is only a myth now. (Boxall, 1996) References Arthur, Y, Woolcock, P and Sullivan J. (1996); "Identifying and Developing HR Competencies for the Future: Keys to Sustaining the Transformation of HR Functions." Human Resource Planning, 1996, pp. 34-58 Bourne, M., Franco, M. and Wilkes, J. (2003); Corporate Performance Management; Measuring Business Excellence; 2003; 7, 3; pp. 9-20 Boxall, P. (1996); The Strategic HRM Debate and the Resource-Based View of the Firm', Human Resource Management Journal, 6, 3, 52-75. Hacket, P. (1996); Managing People, Biddle Publishers, London Thomas P., and Walker, J.W. (1993); "Aligning Staffing with Business Strategy." Human Resources Planning, 1993, pp. 1- 23. Williams, M.R. (1972); Performance Appraisal in Management, Heinemann Publishers, London. Read More