HRM Practices in Gateway Engineering Limited - Research Paper Example

Gateway Engineering Limited HR0257 A. People Management Problems In the area of entrepreneurial activity, the term ‘people management’ is a relatively new concept. Until recently, the term ‘human resource management’ was used in order to express all issues related with the management of employees within an organization. However, gradually this term has been ‘replaced’ by the term people management, a term which is more human related. The study of Chiavenato (2001, 19) showed that ‘people management’ as part of the organizational activity is usually developed under the control of middle managers who are characterized by “unique personalities and intelligence, and differentiated aptitudes, knowledge and abilities”. Through the years the form of ‘people management’ has been differentiated and the role of employees has been developed up to the level that the latter are considered to be business partners. This is an aspect of the ‘managing with people’ scheme of human resource management. Usually, the performance of a particular organization is depended on the performance of its employees. However, Gelade et al. (2003, 383) supported that “few organizations can evaluate their performance accurately by averaging the performance of their employees; in most cases, the performance of an organization is determined by the productivity and efficiency of such higher-level organizational entities as departments, retail outlets, plants, or teams which constitute - in the language of operations research – the so-called "decision-making units" (DMUs)”. In other words, although the relationship between organizational performance and employees’ performance is extensive and continuous, there are cases that the corporate performance can be negative even if the performance of its employees is significant (and vice versa). For this reason, it is stated by Walker (2000, 5) that “the measure of performance is not compliance with rules and procedures, but the achievement of real results; results (or outcomes) are not to be confused with mere outputs which just give us a sense of how much work has been done, but results give us an indication of the real impacts of the work”. The reference to the above issues – aspects of personnel management and corporate performance – is necessary in order to identify and evaluate the problems appeared in Gateway Engineering Limited regarding the management of its personnel in all organizational sectors. At a next level, the findings of the research made by the company’s CEO regarding the problems of the organization in the area of human resource management, revealed a series of long existed problems and conflicts within the particular organization. Before starting analyzing the problems related with the personnel management in the specific company we should mention the most common problems appeared through the Operational Strategy Development in most enterprises globally. This presentation is made in order to prove the significance of human resource management (and particularly of the personnel management) for the growth of the organizational performance. In this context, the most common problems of the Operational Strategy Development are the following ones: “(1) problems regarding the organizational structure within which the persons involved work; (2) problems regarding the cognitive skills of the persons involved; and (3) problems regarding the attitudes of the persons involved” (Akkermans et al., 1992, 7). In accordance with the above view, human resource management is a sector of significant importance for any organization around the world. However, the operation and the development of this sector within a particular enterprise has to be constantly monitored in order for the specific firm to be protected against any potential damage (possibly caused by the application of an inappropriate personnel policy or the lack of sufficient control over the measures proposed for the human resource management sector). In general, the personnel management sector of the specific organization could be characterized as ‘sufficient’ referring to the plans available to the public. In the particular organization, its presence in the local market for many years (approximately 47) proves that the strategy followed by its managers is appropriate in accordance with the social and financial conditions of each specific period. The company is ‘divided’ into four divisions, each of which follows particular rules and policies regarding the human resources management. The most important division of the company is the ‘Operations’ sector. The main characteristic of the human resource policies applied in the particular division is the existence of several ‘project teams’ which provide specific services in accordance with the firm’s requirements. The major problem regarding this division is the absence of appropriate training and development ‘schemes/ seminars’ for employees in all organizational sectors. On the other hand, the number of employees working in the particular sector has been estimated to 950, a significant one if comparing the other departments of the specific firm. Problems related with delays in the delivery of services can be also observed in the Support Services Division which provides significant support to the firm regarding a series of problems related with the human resource management – as it can be observed in the particular case. In this context, the fact that most things are decided under conditions of significant pressure – and with the previous permission of a manager - can limit the performance of the firm at least in the long term. As for the third organizational department (this of the Information Technology Services) we should notice that this department applies a successful strategy regarding the management of human resources. More specifically, the particular department is considered to be extremely profitable throughout the years and it is for this reason that no particular strategies for organizational restructuring have been presented throughout the firm’s operation regarding this particular sector. On the other hand, the low levels of staff turnover observing in this sector could be considered as the only ‘drawback’ of the particular department. The implementation of appropriate training sessions could help the workers in this sector to improve their knowledge in accordance with the needs of this Division. From another point of view, the Marketing and Sales department also lacks of the appropriate consultation regarding the development of specific projects across the country and their role in the limitation of energy provided in the particular area. For this reason, the provision of the manager’s view regarding the execution of a specific plan is crucial. His permission is also required before any project begin. The continuous control of the manager over the specific department should be regarded as a positive element of the organizational strategy in this particular department. However, the fact that its plan of the particular department has to be reviewed by the manager, it can lead to significant delays. The lack of sufficient experience in the staff working in this department should be considered as of its main disadvantage. Generally, the role of managers within all the firm’s divisions should be strongly criticized because their active involvement in the problems appeared currently in the firm’s four divisions, could be really valuable for their resolution. More specifically, the participation of the leader in a particular plan can be a crucial detail towards the development of human resources. The role of leader in this occasion is crucial. More specifically, the leader has to “encourage and develop subordinates, manage individual performance, and build an effective work team establishing through his or her example and actions a climate of trust; people are trusted with difficult tasks, given appropriate support and are encouraged to succeed while mistakes are opportunities for learning, not occasions for punishment” (Sandwith, 1993, 44). On the other hand, Engel (1997, 23) stated that “traditional managers perceive work teams as a threat because work teams are displacing traditional management methods and mind-sets, which bodes ill for managers from the old school”. In accordance with the above view, sociological perspective seems to be particularly strong in the evaluation of the firm’s human resource strategy. Generally, it could be stated that the development of human resource management within a particular organization is a challenging task mostly because the identification of the problems related with the specific sector can face several constraints due to the intervention of a series of parameters. Moreover, because of the importance of the particular sector for the organizational growth it is necessary for the firm’s management to take all appropriate measures for the development of the specific sector. The participation of the workforce as a ‘union’ regarding the realization of specific business projects is considered as crucial. Towards this direction, Frenkel (2002, 15) supported that “workplace relations are both an expression of wider economic, political and social forces and a major influence on the life chances of most adults; these patterns of management-worker relationships vary between societies from highly conflictual to strongly cooperative and tend to change over time”. In other words, the development of the human resource management sector is a priority for managers around the world. This development can lead gradually to the increase of the firm’s profitability and as a result to the improvement of its position in the relevant market place. B. Recommended Changes In order to propose the appropriate measures for the development of human resource sector within the particular country’s industry, it is necessary to explore primarily the content and the structure of organizational change as a particular tool of business development. The main issue examined in this context is the implementation of a series of training and development programs within the specific organization and their ‘consequences’ in the improvement of the firm’s performance. In this context, it is noticed by Greve (1998, 149) that “as an outcome jointly determined by motivation to change, opportunity to change, and capability to change”. The above assumption could be analyzed by Katzenbach et al., who supported that (1996, 149) “change efforts are often conceived as waves of initiatives that sweep through an organization from the top down, or the bottom up, or both, and flow across functions; seen through the eyes of the change leader in the middle, however, change looks more like pebbles dropped in a pond, creating expanding waves of energy that spread out to impact people at all levels”. If the management of change is not appropriate then it is likely that the person involved will not be welcomed in the particular organization. Towards the same direction, Eoyang et al. (2001, 5) stated that “many organization change initiatives start at the top and deal strongly with any resistance from system agents that blocks progress; common ways of responding to resistance include downsizing, restructuring, and re-engineering”. In order to evaluate current human resources strategy and propose the appropriate plans of change, we should primarily examine the structure of HRM as a fundamental sector for the organizational development. In this context, it is noticed by Sims (2002, 3) that “human resources involve HRM programs aimed at developing HRM strategies for the total organization with an eye toward clarifying an organization’s current and potential problems and developing solutions for them; they are oriented toward action, the individual, the global marketplace, and the future”. Although the planning related with the human resource management of the particular organization is stable and profitable, the evaluation of this performance is related mostly with the behaviour of staff in all organizational contexts. Moreover, the existence and the development of appropriate personnel management is a process that needs to be closely monitored in order to protect the firm from possible damages. Regarding the above, it has been proved through the study of Bunker et al. (2005, 12 that “much of that failure stems from not understanding how to manage the structural side of change and the human dynamic of transition; as a result, instead of a loyal, productive, and enthusiastic workforce, we face employees who are insecure, fearful, and skeptical, and we undermine our progress toward new goals”. In accordance with the above views, the implementation of an appropriate strategy based on the diversity can promote the local activities (presented under the projects sent earlier for the development of his/ her products). In the above context, Mathews (1998, 175) has participated in the development of Human Resources) as they can be investigated in most countries surrounding the hill (Operational service). On the other hand, it should be highlighted that “the differentiation of human resources management in each particular workplace should be based on the following criteria: ‘a) the business structure, b) the legislative and employment relationship context, c) the patterns of HRM competence and decision-making and d) the national culture’ (Schuler et al., 1998, 159). For this reason, all firm’s departments should be restructured following the principles and the patterns of the general commercial market – as it has been described above. In the same context, it should be noticed that Jackson et al. (1995, 237) stated that HRM can be used as “an umbrella term that encompasses (a) specific human resource practices such as recruitment, selection, and appraisal; (b) formal human resource policies, which direct and partially constrain the development of specific practices; and (c) overarching human resource philosophies, which specify the values that inform an organizations policies and practices”. In accordance with the above views, all changes recommended within a particular organizational environment should be in accordance with the needs of the specific organization and the trends of the market. For this reason, the role of the HR policies as primary sources of organizational development cannot be doubted. All firm’s departments, apart perhaps from the Information Technology Services, follow a specific route of development. However, it is necessary that their HR strategies are ‘reconsidered’ in order to identify possible causes of organizational failure. The existence of ‘networks’ or ‘teams’ of cooperation in the Operations department although an effective solution for many years, has not produced yet its results in accordance with the targets set by the firm’s operational department. For this reason, a new policy of HR in the specific department is considered as necessary. The same observations can be used in order to explain the plans for growth of the HR department of the Support Services division. The existence of high level of bureaucracy in this sector has led to severe delays of the daily activities of the local population, and for this reason, the existence of such a situation can lead to the successful organizational restructuring. The creation of a personnel unit for the organization’s needs has to be considered as a significant advantage comparing the practices followed in the past. More specifically, it can be noticed in the case provided that the creation of personnel unit in each of the firm’s departments for the development of the programs related with the training of staff, could be proved a valuable strategy, however the training procedure can be proved as particularly difficult especially when employees have different levels of education/ working experience. For this reason, it has been mentioned by Hamilton (1995, 399) that “establishing a personnel unit and designating a personnel officer is dependent upon a number of variables including number of employees, type of organization, size of budget, and expectations regarding the personnel unit’. The above views are also supported by Brown (1997, 15) who supported that “organizations can buy skills through hiring, or they can develop skills through training and development (T&D) activities”. In fact, if the appropriate schemes of training and development are followed within a particular organization, then it is very likely that this organization will be developed rapidly. On the other hand, Bagshaw (2004, 154) stated that “workforce diversity – from customer service personnel through to the board of directors – is a critical dimension for those companies seeking to establish themselves as global enterprises”. The issue of training is not mentioned by the above researcher leaving the impression that this issue is considered as common having as a major ‘path’ of resolution the implementation of extensive and continuous training and development programs. However, it is stated by Clemons et al. (2004, 39) that “for many employers there is a serious gap in their employment training programs; that gap is caused by the absence of a well-designed diversity training program that actually ties together and completes the equal employment training repertoire and addresses diversity issues in the workplace; most employers do not recognize the need for such training until it is too late”. Towards the same direction, it is noticed by Karp et al. (2000, 152) that “in designing and delivering diversity training almost, if not all, programs focus on making changes in the awareness and the attitudes of the participants; the strategy is to create changes that will have a long term positive impact on the organizational culture, with the objective of creating a safer and more productive working environment for all organizational members’”. On the other hand, it is suggested by Barrick et al. (2003, 3) that “an organization could increase productivity simply by increasing the happiness and satisfaction of its employees, and both organizations and employees would benefit” (Landy, 1989, R. Wright, 2000 in Barrick et al., 2003, 30). From another point of view, the role of technology in the development of appropriate training programs within a particular organization is crucial. For this reason, Megginson (1972, 75) et a “while technology can increase productivity and give major emphasis to social and economic development, the other factors are equally important; management exerts strong influence upon the types and extent of utilization of technology as well as the supply of natural, financial, and human resources while productivity involves using knowledge, skills, attitudes, motivations, and methodology of people in an existing culture”. It can be assumed by all the above that in the particular organization, the implementation of appropriate training and development schemes could help employees to increase their productivity and in this way the performance of the company should be also increased. However, it is necessary that the above measures are implemented after the careful examination of all parameters related with the daily operational activities (in terms that the proposed measures are going to resolve existing problems). In this context, the level of involvement of employees in the organizational procedures could be difficult to be decided. More specifically, it is stated by Levine (1995, 83) that “in certain occasions, the employee involvement could lead to significant problems for the company’s profile towards its stakeholders”. The role of the firm’s leader in this case should be considered as crucial. Firm’s leader can have a multi-task role (Hill, 2004) in the completion of the relevant procedure (restructuring of organization, implementation of appropriate T&D schemes). The study of the relationship between motivation, emotion and leadership, led Asforth (1995, 97) to the result that “Leaders may persuade with logic, but they motivate through emotion; they must come to grips with the challenges of emotion, a key driver of productivity, quality and other factors that lead to business success”. In this context, the leader of Gateway Engineering Limited could propose the appropriate measures for the restructuring of the firm having the right to decide on the implementation and the monitoring of each particular strategy as well as the use of supplementary HR tools, like the ones proposed by Kesler (1997, 28): “a. strategic staffing and selection b. learning and education, c. performance management, d. rewards and recognition, e. organization design and f. communications”. The main aim of the firm’s leader should be to successfully ‘adapt’ the human resources strategies to the organizational needs. In this context, Harris et al. (2004, 156) stated that “the particular set of HR practices that an organization adopts must fit with other organizational factors in order for it to be effective”. The issue of ‘fit’ regarding the implementation of HR plans has been also examined by Korman et al. (1999, 21) who noticed that “of critical importance is the nature of fit; organizations need more versatile managers and are finding fewer candidates available with the skills they need”. From a different point of view Sias (2005, 385) found that “practitioners in troubled organizations (e.g., those with high levels of turnover, low levels of performance and morale) might examine the quality of the supervisor-subordinate relationships in their organizations to determine how that might be detracting from the dispersion of quality information throughout the organization”. The cost involved in the relevant procedure should however be estimated in advance with accuracy (at the highest possible level). Towards this direction, Walker (1998, 9) supported that “costs of human resource processes and initiatives (investment of money, time, and other resources) are best measured in relation to their outcomes while unusually high recruiting and training costs may be justified by the resulting business results achieved”. The possible effects of proposed strategies of change have to be considered especially regarding the employees who should ensure the protection of their rights (Hill, 2004). For this reason it is stated by Huy (2002, 31) that “fundamental change in personnel, strategy, organizational identity, or established work roles and interests often triggers intense emotions; emotions in turn affect how different groups interpret a proposed change and how they behave”. Generally, it could be stated that “based on partnerships among human resources developers, managers, and peers, the workplace can provide opportunities for team-based learning and growth in basic competencies such as listening; that is, the work environment itself can become a development tool” (Cooper, 1997, 79). The development of technology should be considered as a crucial element in the whole procedure of the firm’s restructuring. In fact, the firm’s departments would possibly need to interact in order to achieve the required target. During this process their form may change in accordance with the current standards of organizational restructuring. It is for this reason that Rowden (1999, 22) noticed that “the traditional HR functions of staffing, recruiting, compensation and benefits are losing ground to a new generation of value-added core HR functions that include career planning, executive development, training, succession planning and organization development”. In any case, the implementation of the appropriate training and development programs can be expected to lead to the increase of the employees’ productivity and – in this way – in the improvement of the firm’s performance in the long term. However, it should be taken into account that the proposal for change would be expected to cause the reaction of firm’s employees even if the proposed measures would be of their interest. Perhaps this behaviour could be expected by the view of Rosenberg (1993, 21) who stated that “change is a constant in modern working life; since change is inevitable, managers must work to give their staff a sense of control over changing situations”. Through the time, the firm’s employees are more likely to accept the proposed changes and participate actively in all aspects of the relevant plan. References Akkermans, H., Aken, J. (1992) Process-Related Problems in Operations Strategy. International Studies of Management & Organization, 22(4), p. 6-12 Ashforth B. E. (1995). Emotion in the workplace: A reappraisal. Human Relations 48(2), p. 97-99 Barrick, M., Ryan, A. (2003). Personality and Work: Reconsidering the Role of Personality in Organizations. Jossey-Bass. San Francisco Bunker, K., Wakefield, M. (2005). 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