Strategic HRM Explained - Research Paper Example

Strategic HRM Case Report VISION: A sustainable corporate aerospace manufacturing business committed to product excellence and loyalty Rationale: Given the state of business operations, attention is directed to upholding the ideals of: Business sustainability (arresting production losses alongside 25% employee reduction/turn-over that threaten survival of company) Competitiveness of product (committing to product excellence) Ensuring satisfaction of customers (keeping customer loyalty) MISSION: 1. Re-define business policies and HR approach focusing on strategic concerns and issues to evolve medium to long-term programs and budget plans that are responsive to the pursuit of corporate vision. Rationale: Corporate performance trend does not show a sustainable future unless top-to-bottom strategic planning (SP) is mandated to re-engineer and fundamentally propel re-establishment of stable operation. SP will enable the appropriate review and recast of corporate philosophy as captured in vision and mission reformulation. There is need for a common ground for collaborative threshing out of operational policy and program concerns and issues, gaps and weaknesses, exploring opportunities, and assessing threats for resolution and planning of next steps from short range to long-term goals. Consensus and collaborative translation of corporate philosophy into realistic goals is imperative. 2. Enhance the work environment through re-defined and mainstreamed HRM positioned to perform corporate organizing functions and operations that must be managed to achieve corporate goals for continuing business survival and commitment to worker’s professional growth.. Rationale: Workers’ profile shows aging (50% over 50 years old) but threat lies more in a seemingly stagnant HRM evidenced by: High labour turn-over (25% in last seven years) Low morale Clear bias in recruitment practice with no clear-cut standard guide on employment skills required. HR delivered by head office, management by remote control. Labour turn-over has its pros and cons. It can lead to more expensive, unplanned labour operations contingency costs. No company can afford HR wastage. ACL must enable HR to be functionally aligned. IMPLEMENTING GOALS/STRATEGIES: 1. Synchronizing strategic planning reviews and parameter-based performance monitoring to ensure information levelling at all levels and encourage transparency, team building, and trust in corporate operations. 2. Strengthening of strategic HRM policy and service operation in personnel recruitment, selection, hiring, and placement, accounting and management of labour turn-over, basic & continuing training, compensation & benefits administration consistent with the pursuit of corporate vision. 3. HR Training and re-tooling on appropriate IT and communication that support and enhance strategic HR initiatives and functions. 4. Functional re-alignment of HR mandate to perform strategic planning, parameter-based measure, and pursuit of corporate objectives through efficient and effective management of ACL employees requirement.. As observed by Snell (UK HRM articles, www.hrmguide.co.uk/65), “The right HR technology is a critical component of any HR strategic moving forward.” Strategic HR Recruitment Policy Traditional personnel administration planning is reinforced by corporate planning to ensure what Sison (1991)1/ justifies as “relating HR planning to overall business plans to make it more meaningful and responsive to the needs of the organization” as to match “ the size of the work force, levels of skills and occupational mix” to corporate planning. The policy is inspired by the Cherrington (1983) framework that ranges planning from short-term to long-term goals. The paradigm is shown for appreciation1: The business and HR planning relationship as configured supports the VMG strategizing prescribed toward re-defining ACL business outlook. The usefulness of top-to-bottom strategic planning to help ACL determine and decide on its posture and direction for translation into concrete programs and activities equally serves to guide overall work priority thrusts and strategic recruitment of its employee requirement.. With a clear business picture, HR is positioned to deliver on the corporate vision focusing to undertake what Sison (as cited) stipulated For long-term plans, “…as the examination of labour force, demographic changes in labour supply, socio-cultural transformations and changes in laws and regulatory agencies.” For medium-range plans, “…as the setting up of organizational goals and objectives within a 2-to 5- year frame.” e. g. sales targets, quota, market share, volume of production Thus, a passive HR policy on labour turn-over/attrition is discarded. The recast in HR outlook moves it towards making strategic projections and estimations on labour turn-over and attrition rates vis-à-vis careful studies on production figures and threats imposed by unmanaged HR-based changes. The interplay of statistical production targets, sales volume, quota, and capture of market share is factored consistent with its new mandate of delivering on corporate goals through its efficient and effective determination of the employment needs of the business. For short-term plans,“…as the setting up of performance goals, annual operating plans, & budgets.” This is the present ACL business and HR planning mode that deals with what is immediate, visible, and that waits for HR instructions from the head office. For sustainable operations, the mode is enhanced with HR empowerment to assess and plan on goals that go beyond the short-term, exploring, and exploiting whatever competitive advantage ACL has in production and marketing relating to HR concerns. Corporate Values, Team Building, and Training Integration Policy The Wyeth HR Model as industry case sample. 2/ The ACL Japanese headship can learn from this model that integrates corporate values, team building, and training as a strategy. Wyeth is a multi-national organization with base in Madison, New Jersey and operations in 145 countries world-wide today. While it caters to pharmaceuticals and health care products, its leading edge lent by Science Magazine 2005 Survey as among the top 20 biotech and pharmaceutical employers in said industry, inspires discussion and analysis on the Wyeth way. Wyeth exemplifies top leadership firm resolve relevant to this paper’s purpose. It had literally undergone drastic organizational overhaul. Its leadership took full stock of its situation and firmly re-engineered change in total operations to re-establish the Wyeth foothold as global leader. One lesson for other corporations big or small to benefit from lies in the way that Wyeth now handles and manages the differing cross-cultural values brought into the workplace by its culturally differing workforce.. Wyeth apparently operates on clear-cut and consistent statements of company standard operating procedures prescribed for strict adherence and compliance by all Wyeth employees regardless of culture, country, and position in the organizational ladder. Corporate vision is translated into five core values (leadership, collaboration, quality, respect for people, and integrity) defining and constituting job performance accountability. These values are operationally defined (what Wyeth means as the only meaning to adhere to). What are otherwise qualitative are translated into quantitative, measurable terms with numeric standards or parameters provided to allow concrete and objective basis for the measure of each value attained by every employee in each job category. Performance is calibrated on every aspect of work standard handed down by Wyeth with systems for monitoring, evaluation, training and administrative support in all areas in place. Team building veers away from traditional seminar-conference type of teaching-learning bonding. It starts at recruitment, as with training. A potential applicant goes through rigorous, screening interviews, on-the spot demonstrability of product knowledge and presentation skills, observations on job attitudes, field stamina, and commitment. IQ, personality, product knowledge, test score standards are set high. A recruit is paired right off with seasoned staff and gets exposed to the actual job situation as same is carried “piggy back” style to observe and participate in the entire process of job and job environment. The Wyeth 4-stages training portfolio is started during the testing-for-job fitness period. Upon actual hiring, a recruit has become a promising professional on the job, a fast team worker, and trainer. At the end of Day 1 in the workplace, the values have become synonymous with quota codes and productivity. Team morale is high. In work pay, Wyeth compensation and benefits package rate with the highest in the industry. However, closer analysis into the values mechanism may offer another clue of why its way works. The “take charge” style of leadership value, the “culture of collaboration” that naturally ensues among all sharing the same work values perspective, the orientation to-achieve-goals quality of work delivered, the symbiotic respect for leaders, co-workers, and clients, and integrity associated with keeping one’s job are integrative. Finally, documentary research shows that Wyeth operates by a Code of Conduct that contains Company Work Rules (i.e. on operations, safety, security, business ethics, and marketing violations) and stipulations on specific areas of law and business ethics. The Code emphasizes that all in Wyeth are governed by said Code. Value HR Policy: The HR can innovate from the process, as follows: 1. Devise own strategic plan. Come up with a definitive HR values reformation & training program with manuals drawn up.. 2. Derive own integrative, realistic operational definitions of all HR-related work functions, corporate behaviour, accountability, and policy. 3. Draw up sustainable HR-related statistical trends, projections, requirements. 4. Pursue salary grade standardization and job re-classifications according to new business and HR mandate. 5. Review compensation and benefits scheme in accordance with new mandate on personnel requirements and priorities. 6. Calibrate and draw up parametric measures or standards of rating accountability, assessing, disciplining, rewarding performance and achievements in training, aspects of job, significant contributions to company or those that lead to company gain. 7. Institutionalise periodic, transparent, and objective HR-related program performance reviews and sessions to monitor performance efficiency and correct inefficiencies. 8. Institutionalise a body to address workers’ concerns and build up workers’ confidence and trust in management. HR Wage and Salary Administration Salary Grade Standardization Policy ACL workers’ low morale is linked to worker’s flat rate pay, bonus pay tied up with production rejects, losses, and no wage increases. A workers’ valuation of his pay is not subject to time and place. Quoting from “Scotland, An Equitable Pay Plan,” A PMAP Personnel Journal 1976 reprint, “There is no single factor that has a greater impact on employees’ morale than the pay received from their work. The amount of the pay or how this compares with the amount received by his co-worker mean more to an employee than almost any other factor in his job. How employees feel about equitableness of their pay can influence to a large extent their level of performance.” Thus, the rationale for adoption and implementation of salary grade standardisation (SGS) as an HR strategic initiative. The advantages provided by this method to raise the pay of employees are: 1. The scheme uses a criteria-based, systematic, and research-drawn objective approach to determine areas of job operational efficiencies and deficiencies. In positions upgraded or new ones created as a result of SGS process, recipient employees given recognitions for jobs held or for outstanding performances are given justice. 2. In collapsing redundant, duplicating, gap-causing unfilled items and those that cause inequitable distribution of work load, justice is also served those who are given relief especially in long-held jobs that have remained unmonitored up to the time of SGS implementation. To these ends, practical guide pointers in undertaking SGS is available in the form as recommended by a former Corporate Planning Manager (Quitzon, 2004) involving Supervisory to the rank & file posts for a leading Insurance Company in the Philippines, as follows: 1. In undertaking SGS, consider the company’s VMG mandate encased in company organizational structure and personnel requirement 1.1 Under organizational structure, consider department/unit goals-objectives-functions. 1.2 Under personnel requirement, consider workforce composition (e.g. contractual, probationary, regular), work structure, delivery of service (efficiency and effectiveness) 1,3 For entry-level positions: Distinguish between skilled and technical work for contractual positions. Put premium on higher qualification, aptitudes, and potentials. For those under probation, consider the Labour Code on rules for regularization. 2. Categorize level of operation (strategic, operational, tactical) 3. Consider future workforce and include manpower pooling under the HR program. 4. Consider HR equipping with tools to draw up valid and reliable parameters for screening applicant qualifications and potentials involving education, training, job skills, job aptitude, job attitude, work experience. 5. Closely scrutinize the HR capability to manage organizational growth and personnel upsizing. 6. Top management must decisively complement HR organizational mandate vis-à-vis proposed institutional changes. 7. Top management must mandate establishment of Manpower Career Development Program corollary to SGS. To enable professionalization in the ranks of potential employees To regulate overburdening of qualified staff To provide a sustaining motivator to keep high employee morale . 8. Seniority or probationary status should not serve as a liability or cause for grievance as a result of SGS processing. 9. Objectivity and use of criteria should guide upgrading or collapsing of positions. Other Considerations for upgrading positions: Employment history Level of work difficulty/sophistication/complexity Concerns relevant to company welfare and gain (substantive innovations, contributions) Other Considerations for collapsing positions: Collapse unnecessary spread-out gradations in position levels to ensure equitability in terms of “equal-pay-for-equal-work” principle. Collapse standard positions, at the time of SGS activity, that show gaps in levels not filled up to avoid overburdening of staff assuming work load of unoccupied position or loading one occupying lower or higher position. Ensure that process-based activities are not randomly fragmentized to ensure more efficient monitoring and evaluation of performance and pinpointing of responsibility. 10. Use of merit and selective upgrading for salary increase. Award merit increase for academic degree achievements pursued by workers on their own account to motivate the pursuit of higher learning and self-improvement that redound to company’s gain. 11. Re-align, recast job statements, and job descriptions to accurately express work load and work descriptions 13. Consider putting the remuneration scheme at par, if not better, over similarly- based companies. I4. There should be no diminution in rank, position, or remuneration, in the process of SGS Implementation.3/ __________________________________________________________________ Task Three 2 TOPIC 1: What I believe to be an important barrier to change and how to overcome it Change, here, is qualified to be developmental in nature to which ineffective communication is pointed out as barrier. There are various ways to regard ineffective communication. It may be the lack of it, the failure in communicating, or simply the breakdown in communication. The key idea is communication. Why is it an important barrier to change? Without communication, that is, effective communication, chaos and confusion rule everywhere. Positive change will be hard, if not impossible, to achieve. One does not have to be a communication guru or disciple to appreciate the centrality of communication in any business or development transaction and relationship. When it comes to the subject, Berlo’s (1963) communication dictum “Meanings are in people, not in words” is classic and remains useful to this day. In effect, every student of communication, more so on development communication, would agree that when used for developmental ends, to effect CHANGE, the intent or design of communication or Communicator is to persuade, to influence. Going by Berlo’s teaching, to be effective, communication must be responsive, by being receiver-oriented. To overcome communication barriers put up, it is logical to approach the intended recipient of communication from his framework. The level of effort applied is commensurate to the importance attached to overcoming the barrier set up. Today, a communicator has various ways of communicating and communication modes have literally become automated, efficient, easily accessible, and so facilitative. On top of this, communication has become global in reach, as in what education can do to overcome resistance to change. Nevertheless, when communication or Communicator is ineffective, the desired change is not brought about. This writer’s position is actually supported by OB and OD experts and theorists that include Schermerhorn, Hunt, and Osborn, (2000) and Kotter and Schlesinger (1979). Schermerhorn, et. al listed eight factors3 that point out WHY PEOPLE RESIST CHANGE of which lack of good information comes second. How would “lack of good information” differ from “ineffective communication”? Both situations show communication failure in desired message conveyed and received. In fact, all are communication-based. With proper communication action to remedy the lack of communication, resistance to change can be addressed and resolved. This view is supported by Klein (1969) who considers that resistance to change actually serves as signal for something to be done to gain the desired change result. Resistance may just be a matter of communicating the uncommunicated importance of change being sought (Rogers, 1993) or communicating the uncommunicated to give psychological and emotional assurance to overcome the barrier interposed. Communication barriers are as much culturally influenced. To overcome cultural differences, it is logical to exert effort to know the cultural frame of intended recipients of communication. Adjustment in language used, idea presentation, communication mode, or simply personal approach may settle it. Motivation can influence effort exerted. Today, communicating to be understood in order to get what one needs is also fast becoming a market commodity where one must be efficient in use of language to be effective. Low morale is akin to low self-esteem. Either condition may be individual or group-based reinforced. Definitely, there is a gap-lack condition to be addressed. Perspective can determine what academic language to adopt to qualify these states. The range is limitless and diverse as people are diverse. But a common ground for bridging and overcoming barriers in thought process is communication. Is used by every human being and understanding frames of who, what, how, where, when and why people say what they say provides the starting for overcoming real or imagined barriers set up to resist planned change. Topic 2: Likely barriers to the implementation of the recommended HR policies: Ideas are presented in hereunder form for visual ease. Likely Barrier to Implementation How to Overcome 1. Apathy of present HR itself to ACL Top management decisive intervention proposed structural and to assess HR actual capability, readiness, functional change and commitment to carry out changes 2. Lack of HR capability to act as Top management decisive political will and Change agent and action too hire external HR management Consulting service team to pave and fast- track strategic planning and SGS preparatory review and initial action phase Special and fast re-tooling of HR unit 3. Workers’ resistance to HR strategic information, education, communication, positioning/empowerment participatory involvement of workers to assure them on fears relating to what Schermerhorn, et. al have pointed out as tackled in Topic 1 END NOTES: 1/ Of the author, it is written that he has been the prime mover of the Personnel Management Association of the Philippines (PMAP), an organization which has been responsible for raising the standards and prestige of personnel management and for upgrading it as a profession in the country. 2/ Figure 1. Interaction Between Business Planning and Human Resource Planning Business Planning Human Resource Planning Strategic Planning Environmental Scanning Long-Range Corporate Philosophy, Labour Supply Analysis Planning Organizational Mission Labour Force Composition Strengths & Weaknesses Social/Cultural Changes Demographic Changes Operational Planning Forecasting Middle-Range Planning Projected Personnel Needs by Organizational Goals and Job Category Objectives Attrition Productivity Changes Budgeting Projected Staffing Requirements. Short-Range Budgets Surplus or deficit of Personnel Planning Staffing Authorizations Economic Forecasts Succession Planning Performance Goals Promotions and Transfers Annual Operating Plans Training and Development Source: David J. Cherrington. Personnel Management. Iowa: WM. C. Brown Company Publishers, 1983. 2/ Wyeth presents a factual case for related study in organizational re-engineering in view of the scenario presented by ACL, as a hypothetical case for analysis. The following excerpts of actual interview of the Wyeth CEO, to whom the revival of Wyeth as a global corporate leader is accordingly attributed, adds authenticity to case report. What is the Wyeth Way? Excerpts from interview done by the Wall Street Journal with Robert Essner dated 22 January 2007 at the Wyeth headquarters in Madison, New Jersey as reported by Scott Hensley: As posed by the Wall Street Journal: “ so what is the Wyeth way?” Essner: “We’ve tried to find the middle ground between great science and rigorous process. We look very sharply at ways of reducing cost in improving efficiency on the development side and constantly improving the quality of science on the discovery side…” Our tests for a new drug are: is it convenient? Does it help enough people that you can envision a commercial market? Answer those two questions Yes and we want to keep it going”… “Scale is not an asset. In today’s environment, extreme scale, scales that companies haven’t learned to deal with, is something of a handicap. It’s a skill-based industry and our focus is on trying to develop our skills. Being no. 1 I the industry in size just doesn’t really matter”…(on management style) “I like to surround myself with people who are different from me in terms of background and personality. I think I’ve done that there. I like to see them mix it up when it comes to key decisions, and then I’m perfectly willing to make decision. It’s not democracy, but it’s a place where everyone has got their voice and uses it freely…” “To love good solid change, but not in love novelty. Loving change for the sake of change is an error you can get into that’s destructive.” 3/ In support of the SGS, Quitzon recommends related vital functions: follow up “after activity” workshop with department/unit head to refine work specifications workshop with supervisors and rank & file on job re-orientation preparations values reformation workshops Finally, the same underscores the need to prepare the organizational environment for this HR activity which stands to challenge the status quo which will resist change. For ACL, this is a strategic HR activity that complements the work environment of the new business. 4/This portion appears to be asking for two kinds of response:: One, on barrier to change (First sentence) . Two, on likely barriers to implementation (in parenthesis) These are not the same questions. However, to accommodate, TOPIC 1 presents a general discussion on what is perceived as a barrier to change which is a matter of individual perception on what this barrier is and how the writer would try to overcome it: TOPIC 2 presents what is asked to be “ likely barriers to implementation” . This time, there is an obvious, logical implicit specific reference to the HR policies proposed in the paper which the writer similarly addressed.. 5/ fear of the unknown lack of good information fear of loss of security no reasons to change fear for loss of power lack of resources bad timing habit BIBLIOGRAPHY Cherrington, David J. 1983. Personnel Management: The Management of Human Resources, (Iowa: WM. C. Brown Co.). Klein, Donald. 1969. “Some Notes on the Dynamics of Resistance to Change; The Defender Role” In Bennis et. al. (eds.) The Planning of Change. Kotter, John P. and Schlesinger, Leonard A. 1979. “Choosing Strategies for Change,” Harvard Business Review, vol. 57 (March/April). PMAP Personnel Journal. 1976. Scotland, “An Equitable Pay Plan”, Management World, 1975, a reprint (April). Quitzon, Sharon C. 2004. Salary Grade Standardization. Manual. Public Safety Mutual Benefit Fund, Inc., Corporate Planning Department, Quezon City Philippines. Rogers, Everest M. 1993. Communication of Innovations, 3rd. Edition. (New York: Free Press). Schermerhorn, John R., Hunt, James G., and Richard N. Osborn. 2000. Organizational Behavior, 7th Edition (USA:Wiley). Sison, Perfecto S. 1991. Personnel and Human Resources Management, 6th Edition (Phil.: Rex) Snell, Alice._______”The Gap Between IT and Strategic HR in the UK”, UK HRM Articles, www.hrmguide.co.uk/65 Wyeth Code of Conduct. Executive Offices, Five Giralda Farms, Madison, NJ07940;Company Work Rules. Wyeth Philippines, Inc.: New Employee Orientation Handouts (Ref.: No. SOP 1500). Read More