HRs Role of Due Diligence in the Hiring and Firing Process - Essay Example

Leadership and Change of HRs role of Due Diligence in the hiring and firing process Recruitment and termination are two important aspects of human resource management and managers must maintain caution so as to avoid pitfalls. In general terms, due diligence is defined as a comprehensive appraisal of prospective businesses and individuals for determining its commercial potential as an asset or a liability. Due diligence in a recruitment and termination process is an ethical business approach that is undertaken to upkeep ethics in the organizational culture. Due diligence in recruitment process Effective recruitment is ensured through a well-defined job description. In the process of recruitment with due diligence, a three-phase structure can be adopted by organizations: a) Conducting objective assessment b) Conducting structural behavioral interview c) Proper reference checking The objective or standardized assessment can be conducted through technical aptitude test and web based research for measuring the job specific competencies in a potential candidate. Although there is no universal definition of the structural behavioral interviews, these can be employed to produce strong outcomes that are similar to proven techniques such as, assessment centers and ability tests. The structural interviews can be conducted in phases, involving peer discussions and telephonic interview. The third phase or reference checking is necessary for quality purposes. Due diligence in termination process The process of implementing due diligence in the termination process can be explained through the following steps: a) The reasons should be clearly mentioned to the employee, who is to be terminated. These reasons should be professional in nature and personal facts should be avoided. b) Sufficient documents to support the legitimate reasons of termination such as, performance review, warnings and write-ups and organizational policies and procedures. c) On the spot termination should be avoided and valid reasons with supportive evidences should be presented. Professionalism should be maintained throughout the process, which must be conducted in person while treating the employee with dignity and respect (McIntyre, 2004). 2. Effective leadership: is it a matter of opinion or subjective preference Leadership is referred to the process of initiating, enabling, developing, implementing and maintaining change with the management structure of an organization, group or team. In a continuously evolving environment, the role of leaders is critical for managing and maintaining organizational performance. According to the Path Goal theory, effectiveness of a leader is greatly dependent on the circumstances wherein an individual works and the leaders tend to adopt various strategies to find the best solution so as to cope with the situation (House, 1996). Leaders exhibit different managerial styles to induce change management in an organization in order to keep pace with the radical changes occurring in the external environment. However, this fact does not explain that effective leadership is driven by subjective preferences. Along with the Path goal theory, the situational aspect of leadership is supported by Fiedler’s contingency model. The contingency model states that rigorousness in the relationship between leadership style and effectiveness can be reduced by increasing the ability of leaders to control a particular situation. The contingency model has proposed three components that influence situational favorability, namely leader-member relationship, task structure and power of the leader (Offermann, Kennedy & Wirtz, 1994). 3. Opinion of leaders on employee satisfaction and retention In context of the current paper, the organization in subject is Procter & Gamble, where questions regarding employee satisfaction and retention were asked to the prominent leaders therein. It was observed that the organization conducts regular surveys through various formal and informal channels in order to ensure high employee satisfaction level. In addition, the management undertakes online questionnaire surveys and blogging activities for executives as a part of employee engagement activities. The discussion revealed that individuals are highly interested in working with the company as it frequently undertakes various motivating activities. Furthermore, the managers practice participative leadership style in the organization, which boosts creativity of the individuals and facilitates employee empowerment. In surveys conducted by external entities, the employees have appeared to promote being part of the organization. A very important aspect of the company that was highlighted by employees was encouragement provided towards maintenance of work-life balance. In addition, the management undertakes fair practices while rewarding good performance. During the study, it was observed that retention rate of the organization is quite high and there is little problem associated with employee turnover. According to the management, the various reasons of high attrition such as, job satisfaction, compensation structure, interpersonal relationship, training and development, organization structure and organization culture, are well-managed by way of framing policies that are employee friendly and beneficial in nature. Therefore, Procter & Gamble does not provide employees any scope for complaints and dissatisfaction. Also, an open communication system facilitates free flow of information, thereby reducing the scope of misunderstandings. 4. Ginnett’s Team Effectiveness Leadership Model According to Robert Ginnett, leadership is essentially a function of team or group activities. The model suggests that leadership is an overlapping combination of a collaborative leader, a scenario and team members or followers. Hence, ensuring team effectiveness is a responsibility of the leader by creating a situation where team can perform in a competent manner. Team performance is heavily dependent on certain critical factors such as, well-defined goal and roles, positive corporate environment, motivation, recognition and feedback and scope for new opportunities. These components are managed by a team leader. For instance, goals and role of the team members are defined by the team leader, who also motivates the members and manages overall feedback about their performance. Thus, a team greatly relies upon its leader for appropriate directions. These factors fit perfectly with components of the Ginnett’s Team Effectiveness Leadership Model. The viewpoint of the model can be directly related to the components of team performance as both suggest that performance and team efficiency is driven by effectiveness of the team leader. The leadership model indicates that leaders are generally aware about team performance by viewing the team dynamics. Also, for improving team effectiveness, the leaders need to undertake three important and very critical functions, namely dream, design and development (Ginnett, 1993). Analysis of leadership in Procter & Gamble Procter & Gamble (P&G) is an American multinational consumer goods company that operates in about 80 countries and its brands are available in approximately 180 countries worldwide. The company presently has 300 brands in different consumable segments and employs around 127,000 employees. According to organizational database, the company serves about 4.4 billion consumers worldwide and has maintained leadership in a number of sectors (P&G, 2014a). According to many authors, organizational success is primarily driven by employees and their leaders. In P&G, the organizational culture is stimulated by certain principles, values and purpose. The purpose of the organization unifies the employees and management towards a common cause, which is to serve consumers in an efficient manner. This motive also serves as a growth strategy for P& G (Offermann, Kennedy & Wirtz, 1994). In P&G, behavior and values are organization driven and are not influenced by personal motives. The organizational values determine and shape the behavior of individuals, which further helps in functioning as a community with each other as well as with external partners. The values, purpose and principles create a unique work environment in P&G that influence every employee to a make positive contribution. The purpose of the company is to integrate the consumers, its brands and employees in one unique system, which is driven by values such as, integrity, leadership, ownership, ambition and trust. The long-term goal of P & G is to be placed in “top 1/3 of the most successful companies in every decade” (P&G, 2014a). The organization considers its employees and brands to be accountable for success gained. The company aims at achieving sustainability in products and services offered so that transparency and integrity is maintained in its reporting. One of the important values of the organization is leadership. In terms of commitment and responsibility, every individual is regarded as a leader therein. A clear communication system is maintained so that every person is well-aware about the organizational goals. The organization operates on people’s management and as a result, organizational capabilities are developed that eliminate hierarchical barriers and enhance productivity. P&G is driven by certain principles such as, mutual trust and respect, common interest, innovation, strategic focus on consumer need and demand and mutual interdependency (P&G, 2014a). The key members of P&G include A.G. Lafley, Angela Braly, Meg Whitman, Johnathan A. Rodgers, Ernesto Zedillo, Scott Cook, Patricia A. Woertz, Susan D. Desmond-Hellmann, Mary Wilderotter, W. James McNerney, Jr. and Kenneth Chenault. A.G. Lafley is the Chairman of the Board, President and Chief Executive Officer (CEO) of the company. Alongside, he is also considered as a great leader within the organization. The key stakeholders of P&G include both institutional owners as well as non-market stakeholders. There are forty institutional owners who have the organization’s shares, including a number of financial institutions such as, JP Morgan, Morgan and Stanley and Merrill Lynch. On the other hand, the non-market stakeholders are profit and nonprofit social interest groups, communities, news media, governments at local, regional and global level and employees of the organization (P&G, 2014b). P&G is one such retail company whose leadership brands earn yearly revenue of $1 billion. In order to run an organization of such magnitude, appropriate leadership, motivation and authority is required. The main source of power, influence and authority is the company’s governing board, whose chairman is A.G. Lafley. Not only the governing board, but Lafley himself is a great source of motivation and influence for the organization. The chairman had retired in 2009, but was again hired by P&G in 2013, when former chairman, Robert McDonald, resigned due to declining sales and complaints from the investors. The organization cherishes Lafley for his ability to deliver and is considered as one of the greatest leaders therein. The relative powers of a CEO and board is determined by the leadership style adopted. Pearce and Zahra (1991) had stated that there can be four kinds of board of directors, namely caretaker, statutory, proactive, and participative. Among these kinds, proactive and participative boards and CEOs represent strong governance along with being more supportive, encouraging and progressive. In P&G, a combination of proactive and participative style of management is followed by the board and the CEO. In addition to that, the organizational functions are based on a CEO centric model, which leads to quick execution of activities, accountability to the board through the CEO and quick replacement of CEO in the management in case of crisis. The scope of participative management is highly dependent on nature, functions and processes of an organization. In P&G, activities are highly diversified and it is not possible to associate employees at all stages of decision making. Nonetheless, regular exchange of ideas, information, thoughts and consultations between representatives of the employer (managers) and employees take place. In participative management, there are three major categories of decision making: social, economic or financial and personnel. In all these decisions, employee involvement is highly valued in P & G (P&G, 2014c). The company has a gender diversified workforce for better utilization of skill and knowledge and the power is distributed equally among various organizational levels. Employee participation and empowerment is of highest priority in P&G. Alongside, a culture of inclusion is fostered so that the employees feel valuable and an important part of the organization. The operational leaders or managers delegate tasks to the employees as a team and support them through indirect guidance so that the latter is at ease while performing the job tasks. Employee empowerment is a pioneering step for the organization as it enables employees to take appropriate decision as and when required without being reprimanded (P&G, 2014c). Given the work environment in P&G, it is very common to come across various groups and teams. A group can be defined as two or more individuals who are connected through certain social or interpersonal relationship. Group dynamics represent behavior of the individuals in a particular group. There are various kinds of groups present in the work environment of P&G such as, planned groups and emergent groups, as explained by Cartwright and Zander and concocted, circumstantial and self-organizing groups as suggested by Arrow, McGrath and Berdahl (Forsyth, 2009). The major features of these groups as observed in P & G are interpersonal communication, work related discussion and interaction, shared task and goals, shared identity and interpersonal influence. In the organization, employees themselves are major decision makers and managers act as supervisors for the purpose of ensuring that activities are proceeding in the right direction. P&G considers its employees accountable for successful innovative endeavors made as well as long-term stakeholders. However, the organization takes sufficient measures in order to oversee that interest conflict do not occur among employees or in groups. According to P&G, conflict of interest arises when personal interest of the individuals interferes with that of the organization. Work related authority is well-distributed among groups and teams, but the leaders ensure that motivation and enthusiasm is maintained in the system. In P&G, leadership skill of the various members is integrated with the different community activities undertaken. A long-standing commitment is exhibited by P&G and its employees towards corporate citizenship. The organization expresses its commitment by financially supporting various causes related to education, health, social service, environment, culture and civic sense. The company and its leaders participate extensively in eliminating children diseases and promoting education. Social responsibility and sustainability development are of high priority, which is also imbibed in organizational strategy and purpose. Sustainability is reflected in the activities conducted by P&G in respect of product innovation and operational improvement. P&G applies scientific approach in product development for reducing environmental footprint. The product development aspects include raw material, manufacturing, packaging, distribution and disposal. The production facilities comply with sustainability objective of the organization. Consequently, the company has been successful in producing products that consume less energy and resources such as, water for manufacturing and serving various purposes of the consumers and green packaging (P&G, 2014d). From the operational perspective, over past few years, the company has achieved success in minimizing carbon dioxide and solid waste release in the environment, reducing water consumption and lowering energy consumption per unit production. The organization has partnered with various charitable organizations in order to conduct its CSR (Corporate Social Responsibility) activities more efficiently. According to its recent sustainability report, the company has provided 6 billion liters of safe drinking water to underprivileged children and families. About 3000 employees have volunteered in 2013 from P&G to build homes in around 12 countries. In addition, the company ensures that green fuels such as, natural gas, are used by the transportation system involved. P&G is a reputable organization, which ensures that its employees are satisfied with work done and have a symmetrical work-life balance. The organization empowers its employees to increase their participation and improve performance. So far, such a situation has rarely been encountered, where event-deviant activities have resulted in undermining the authority and role of group leaders. Even so, occasional minor activities are reported that are eventually resolved by team leaders and managers. One of the main reasons for such a semblance is the organizational culture of P&G, which is driven by certain principles that value employees and their requirements. The other reasons include participative leadership styles of the managers and group leaders, mutual trust and high degree of group cohesiveness (P&G, 2014e). Self-reflection on Leadership skill In the critical analysis regarding the leadership in P&G, it came to my notice that one of the important leaders therein is the current CEO, A. G. Lafley. He has the capability to take charge of a situation during crisis as has been observed during the study. Lafley practices a participative management style, thereby ensuring that the organization focuses upon employee empowerment. It was a learning experience for me as I was not aware that participative management and leadership can be implemented successfully in an organization as large as P&G. I also realized that for managing an organization of this magnitude, leaders must be flexible and have good listening and analyzing skills. Lafley is an appropriate example of a good leader. On conducting further studies on him, my knowledge about practical implication of leadership capabilities and skills will surely be enhanced. References Forsyth, D. (2009). Group dynamics. Boston: Cengage Learning. Ginnett, R. C. (1993). Crews as groups: Their formation and their leadership. Crew resource management, 71-98. House, R. J. (1996). Path-goal theory of leadership: Lessons, legacy, and a reformulated theory. The Leadership Quarterly, 7(3), 323-352. McIntyre, T. L. (2004). A model of levels of involvement and strategic roles of human resource development (HRD) professionals as facilitators of due diligence and the integration process. Human Resource Development Review, 3(2), 173-182. Offermann, L. R., Kennedy Jr, J. K. & Wirtz, P. W. (1994). Implicit leadership theories: Content, structure, and generalizability. The Leadership Quarterly, 5(1), 43-58. P&G. (2014a). Our values and policies. Retrieved from http://www.pg.com/images/company/who_we_are/pdf/values_and_policies907.pdf. P&G. (2014b). Board Composition. Retrieved from http://www.pg.com/en_US/company/global_structure_operations/governance/board_composition.shtml P&G. (2014c). P&G global. Retrieved from http://www.pg.com/en_IN/company/pg-global.shtml. P&G. (2014d). P&G community matters. Retrieved from http://www.pg.com/en_UK/sustainability/social-responsibility/pg-community-matters.shtml. P&G. (2014e). P&G Winning moment of truth. Retrieved from http://www.pg.com/en_US/downloads/company/purpose_people/PG_DiversityInclusion_AR_2012.pdf. Pearce, J. A. & Zahra, S. A. (1991). The relative power of CEOs and boards of directors: Associations with corporate performance. Strategic management journal, 12(2), 135-153. Read More