The Role of Human Resource in the Success of an Organization - Essay Example

Running Head: THE ROLE OF HUMAN RESOURCE The Role of Human Resource in the Success of an Organization A Case Study on the Process of FREMAP Name) ___________________ University Chapter 1: Introduction The development of the role of Human Resource may be traced from the time industrial revolution occurred. Before, the human resource or labor was viewed by owners as part of the machine, forces that operated machineries for the production. They were an integral part of the manufacturing. In the occurrence of industrial revolution, labour then were analyzed, together with the methods of production to improve management of the human resource. The scientific management were then introduced and it aimed to discover what particular management procedure was applicable in a given situation by carefully examining the job, determining what is to be accomplished and then design tools and methods to accomplish the task.1. Still the focus of such study lacks the humanistic approach in dealing with labour more than as a production element. They were treated with less concern and still the focus of human resource were on improving the methodologies of production by focusing on skills of workers and how they will be able to accomplish their tasks in relation to their job. Other factors that affects effectiveness of worker i.e. interest and career growth, were of less consequence as measure of organizational effectiveness. As more studies were conducted to determine secrets of effective management, more theories and findings were identified and more books were written that give precedence to the significance of behavioral factors in the success of managing organizations or developing teams to accomplish organizational objectives. Total Quality Management, for one covers several aspects of management. It applies to the quality of the strategic thinking exhibited by executives, the quality of the firm’s ethics or company beliefs, the quality of training, the quality of technology management, and to the quality of communications2. It encompasses everything. If you’ll look at it, it significantly stresses higher concern on the human resource factor and it is way beyond the original concept of how industry looks at the role of HR to the effective management. Now, HR is an integral part of management and plays significant part in the success of the organization. They became a partner of the management team and perform more than personnel management or office records management. HR became not only as a mother figure in a commercial company, who talks and handles grievances of employees but also, they play a role in decision-making, policy development and implementation of the company’s aspirations and beliefs. They play a big role in managing the culture of a company. A very good example of a company that demonstrates the role of HR in the success of the organization is the FREMAP’s case. The new management structure from centralized and bureaucratic organization to decentralized structure were made possible by the activities spearheaded by the HR management team from the headquarter (HQ) of Fremap3. The HRM played significant role in enforcing and implementing new organizing approach. The personnel of Fremap can perform several functions but is still aligned to the company’s direction or company culture. And accordingly, the corporate culture is the driving force behind the firm’s organizational innovations. Fremap’s common aim, which is cascaded among all its branches are to reshape the organization and processes to achieve its corporate goals more effectively. And as it seems, HRM were effective in implementing ‘high-performance practices’ among it’s employees and resulted to enhanced intensive professional development. The purpose of this report is to understand how the new forms of organizing (NFO) practiced by Fremap produces great benefits to the organization, and identify possible limits of the changes being implemented. Also, it will identify the significant role of HR functions, and identify how HR can be effective in implementing changes yet still maintain corporate culture and order to the organization. With the current trend of management and with globalization, how will HR be able to maintain effectiveness among its employees, maintain good morale and lessen receptiveness to change, but instead harness initiative and support to changes that would result to positive improvement of the organization? All these will be tackled with references coming from studies of other organizations and by analyzing the approach of Fremap in its management. Chapter 2 NFO produces great benefits to Fremap Fremap is a mutual insurance company that provides its associated firm’s employees with insurance coverage and health care3. It functions as a Health Management Organization and is in cooperation with the Social Security Act of 1966 providing sickness benefit and health care. The New Form of Organizing in Fremap was a sway-away from the traditional form of companies wherein there is specialization and differentiation of tasks, departments and divisions. According to Mintzberg (1979, pp 215-97), every organization has five parts – top management, middle management, technical support staff, administrative support and the technical core4. But Fremap, on the final conception of a new structure in 1992, departing from a highly departmentalized structure introduced a new position called integral agent3, wherein on the territorial organization, every employee should be able to solve all of any particular customer’s problems. The integral agent would have to handle all functions required by the customers including decision-making and be able to conduct all relations between Fremap and a particular customer. This entails abolition of the organizational structure mentioned above among territorial (branches) organization. The advantage to customer of the introduction of the integral agent was that clients would only have to deal with one person and would not need to wait for results from various departments during processing of their requirements. On the side of the Fremap, the advantage would be improving the services they offered to their clients and maintaining or achieving their corporate value of high-quality service for its internal and external customers. The success of infusing NFO to Fremap took a step-by-step development that is interrelated. It can be much described as the ‘consistency culture’ where it has an internal focus and a consistency orientation for a stable environment5. Fremap is an organization that has a culture that supports a methodical approach to doing business. This organization succeeded by being highly integrated and efficient. It started from the inception of Fremap where they fostered a strong internal culture, affirming importance of excellence of service and employee empowerment in the company belief. The decentralization started slowly by HQ transferring decision making to the branches with the original structure. Special efforts were made by providing training extensively and defining the corporate goals which generated initiatives and creativity throughout the company. Then a Total Quality Plan was launched where the idea was to enhance and systematize quality of service within Fremap, eliciting direct participation of most of the personnel. Then, in the initiative and decision of the General Manager of Fremap, the ‘integral agent’ scheme was introduced. The implications of changes were made less dramatic upon hiring of an experienced personnel manager in 1989. Fremap’s HR functions, before the insertion of HRM were handled by the branch directors and the general manager from the head quarters. These functions included the recruitment, implementation and development of policies and corporate culture, performance evaluation, compensation and benefits management. Thus, as a result there were no centralized or unifying policies and procedures in the management of human resource. In recruitment, varied standards were used by the Branch directors resulting to varied profiles and lack of standards. In the inception of the personnel director, all these issues were resolved. The HR department made it possible to generate a standard in the selection of personnel and in training the integral agents. Policies developed became common among branches and the creation of workforce that shares a common culture became possible. The Head Office was not decentralized as per management’s decision to provide a strong support to the territorial organizations. However, the headcount did not exceed five percent of the total population of the entire organization. It became an unwritten policy not to increase the central headcount and thus providing a more agile and lean support procedure. Chapter 3 Possible limits of Changes being implemented There are some issues that have been unresolved though in the implementation of this new work form. With this new structure, it appears that there is some sense of paternalistic approach in Fremap’s management where major decisions comes from the HQ in terms of policies and standards. The new information system helped in unifying and standardizing the procedures and schedules on branches, but somehow, this does not encourages creativity and does not promote major decision-making skills for its integral agents since there are already standard procedures in dealing with problems of clients or customers. They can easily refer to information in the database in resolving issues. This is very much similar to the decentralization system employed by the Washington Post wherein their purpose of employing Information System processes for the company is to streamline procedures and synchronize the different tasks assigned to the different departments within Washington Post6. The same concern remained an issue to be resolved by the management team for there are employees who values knowledge and skills growth. And this NFO is incompatible with the level of development, professionalism and commitment of the Fremap Workforce. The Personnel director must be able to think of means or activities on how they could promote growth among its members. Another issue would be, how long will Fremap be seen as a growing organization? As Zenger et. al. (1996 p. 178), a learning organization is one that never stops growing and changing and it lives continuous improvements every day by responding to customers needs and carefully managing cross-functional work processes7. In the absence of cross-functional work process since integral agents handles all functions in territorial organization, how can the organization foster growth and improvements? Human resources or individuals are continuously seeking improvements and has need to achieve, accomplishments, for example mastering, manipulating, and organizing the physical and social environment; overcoming obstacles and maintaining high standards of work; and competing through striving to excel one’s previous performance8. This need to achieve factor could also be an indicator for retaining good performing employees in the organization. Therefore, HRM must be creative in thinking of schemes in making Fremont employees stay with the company and maintain among its employees. Once the integral agent job category has been achieved, further professional progress is very limited. Thus, using this NFO style requires HRM to think of higher quality of life and health to employees and encourage employee satisfaction through better company benefit packages and transforming behavioral contexts of its employees. They must be able to think of reinforcing company’s corporate culture and employees’ loyalty to the company. Chapter 4 How HR Can be Effective in Implementing Changes Yet Still Maintain Corporate Culture HRM played a significant role in the implementation of NFO to Fremap. Mainly because they are the unifying link among territorial organizations and they maintain a strong ties among variables – Operations decentralization, IT Systems, Proactive HRM arrangements, Project-based Work, and Horizontal Linkages. The NFO brought to its employees some level of tension and several employees were affected by the changes that have been implemented. There are some who prefers to remain a specialist though small in percentage compared to those who adapted to the new form. The answer given by the Fremap personnel director was to respect the job categories and task activities of the people who expressly did not want to become integral agents. In the long run, they were motivated to accept the changes since majority of the employees seemed satisfied with the new arrangement. HR’s role in the implementation of the NFO is to align policies and functions from different territories to that of the corporate culture. And this can be done through the HR function that was ‘directed at developing coherent, planned and monitored policies on all aspects of the organization which influence or structure employee behavior such that these generate behaviors which support the achievement of organizational strategies’9. Through extensive training and understanding of the corporate goal of Fremap, HRM may effectively infuse to the behavior of every employee the values being promoted within the organization. Also, selecting new employees that has similar values or acculturate new graduates is an effective approach in molding members of the organization. Formulating and executing strategy, more than other managerial functions, relies on the perceptions and judgments of the managers involved10. Thus, it is significant for the HRM to maintain close coordination with the branch directors since the director of Fremap is the link between the territorial level and HQ. The coordinator of the branch activity is the branch director and they provided the support to integral agent and facilitate commercial activity. They can be considered as the arm of HRM in the implementations of policies and culture, as well as the eye of HRM to monitor the needs of the integral agents and other work force. Sources 1Sison, Perfecto S. (1982). Personnel and Human Resources Management. 2nd Edition. Rex Printing Company, Inc. Manila, Philippines. 2Barett, Derm (1996), Fast Focus on TQM. The Portable Guide to Effective Management. Editors of World Executive’s Digest. The ASM Group. Singapore. 3Quintanilla, Javier & Sanchez-Runde, Carlos J. (2000), New Forms of Organizing through Human Resource Management: The Case of Fremap. The Innovating Organization. Pettigrew A., Fenton E., London Sage. 4Mintzberg, Henry (1979), The Structuring of Organizations. Prentice-Hall: Englewood Cliffs, N.J.. 5Daft, Richard L. (1992), Organization Theory and Design. West Publishing Company. Singapore. 6The Washington Post Company (2006). Management Approach. Retrieved on October 29, 2006 from http://www.washpostco.com/company-approach.htm 7Zenger, John H., Musselwite, Ed, Hurson, Kathleen, & Perrin, Craig (1996). Leading Teams: The Portable Guide to Effective Management. Publications of The Asian Sources Media Group. Singapore. 8Lindgren, Henry Clay & Harvey, John H. (1981). An Introduction to Social Psychology, 3rd Ed. The C.V. Mosby Company. St. Louis. Toronto. London. 9Clark, T.A.R. and Mallory, G.R. (1996). The Cultural Relativity of Human Resource Management: Is there a universal model?, in T.A.R. Clark (ed.). European Human Resource Management. Blackwell. Oxford. 10Cray, David & Mallory, Geoffrey R. (1998). Making Sense of Managing Culture. International Thomson Publishing Company. London, U.K. Read More