Effective HR Management Correlates with Corporate Performance - Research Proposal Example

What does the HR role contribute to organisational success? How can the HR function be linked to corporate performance? Is there evidence that effective HR management correlates with corporate performance? Abstract/Executive summary Human Resource Policy enables the organizations to manage its human resources base effectively and efficiently. There is not single best human resource policy because different companies have different ways of empowering, managing and motivating their staff. The role of human resource department is critical for the success of the entire organization. Human resource managers should ensure that they develop productive human resource policies that guarantee development of highly capable human resource base. In addition, they should be innovative enough to establish initiatives that attract and retain top talents in their organization. Their core duty is to plan and implement recruitments and selection plans, compensation plans as well as training and development plans for the company’s employees. Contents 2.0 Abstract/Executive summary ........................................................ 2 3.0 Introduction ............................................................................. 4 5.0 The organisation ................................................................. 4 6.0 Methodology ............................................................................ 4 7.0 Literature Review ................................................................. 5 8.0 The Data Collected ................................................................. 8 8.1 Barclays Bank ............................................................................ 8 8.2 British Airways ............................................................................ 9 8.3 Coca Cola Company .................................................................. 9 9 Analysis ......................................................................................... 11 10 Conclusions ............................................................................ 12 11.0 Recommendations ................................................................. 13 12.0 References ............................................................................ 15 4.0 Introduction Human resources play pivotal role in realizing organizational objectives. According to Budhwar & Katou (2007), human resource policies and initiatives dictate the level of performance in an organization. Therefore, employee management policies that support individual and collective interests of all the employees in an organization can contribute to organizational success in the end. The objective of researching the topic on the role of human resource is to determine whether extensive recruitment and selection process, training and retraining of employees, incentive compensation and benefits as well as safe and healthy working conditions helps to improve overall performance of an organization. The research on the role of human resource will help to shade light on the key areas of the human resource issues that help to generate good overall results in the company. Employees of any given organization initiate, implement, monitor and evaluate the business processes that are needed for effective and efficient functioning. 6.0 The organisation Human resource policies are specific to organizations depending on the nature of the organization and location in which the organization operates. However, most organizations have similar rules and guidelines that govern the management of the human resource. This research attempts to investigate and analyse the effectiveness of human resources policies applied by Barclays Bank, British Airways and Coca Cola companies. 6.0 Methodology The data collected in this research was qualitative in nature. Secondary data collection method was used to gather relevant information needed to inform and explain different human resources policies that Barclays Bank, British Airways and Coca Cola companies used to manage the human resource. The impacts of the policies applied were also identified and analysed. The sources of the information were their respective annual reports provided in the companies’ websites, books with relevant information and other publications. Secondary data collection method is fast and requires less resource as compared to the primary method of data collection. In addition, it saves time. The specific areas under investigation were the selection and recruitment of employees, compensation and benefits for the employees as well as training and development of human resource as applied in the three companies. 9.0 Literature Review Human resource management policies that allow employees to participate frequently and willingly on matters affecting them improve the performance of the organization. The performance of the organization is measured through company’s financial performance, work attachment as well as employee productivity. The critical areas in the human resource policies that promote improved organizational performances include recruitment and selection, employee training and development, incentive compensation, benefits, health and safety. According to Kaila (2005), vigorous employee educational and training programmes equip employees with necessary skills to drive the organization forward. Training ensures that the roles, duties and responsibilities of both employee and managers are clearly specified. As a result, companies build strong capacities of their employees and gain in the end. Clear communication of employee expectations and targets is very important to enable the organization to run smoothly. According to Budhwar & Katou (2007), research has shown strong positive correlation between high involving human resource management policies and organizational performance. Green et al (2006) asserts that companies, which align vertically and integrate horizontally their human resource policies and practices exhibit both higher individual and organizational performance. Employees of the company understand and perform their jobs better if they are trained and developed. In addition, good human resource policies drive out fear in employees and encourage teamwork among all employees across the departments of the company (Breyfogle 2008). Bogardus (2009) explains that Vroom’s Expectancy Theory helps the management develop human resources benefits based on expectations, instrumentality and valence. It emphasizes the importance of managing the expectations of the employees well. This is because employees are motivated by the rewards they desire to get once they complete their work. If the rewards are worth, the employees are likely put enough effort and complete the work accordingly. According to Kaila (2005), Barclays Bank aims at becoming the best employer. Barclays Bank aspires to make its employees feel happier and valued. Therefore, the bank has put in place human resource policies that attract, develop and retain high caliber employees.Two thirds (57,000) of Barclay’s employees across the United Kingdom are women. Women are perceived to be more caring and concern with organization activities. Barclays Bank human resources department have developed employee friendly policies. The company’s employees can apply for paid career leave and breaks, request flexible working conditions and parental leaves. In addition, maternity and adoption are paid in excess of the statutory minimum. The friendlier policies make Barclays Bank to retain over 80% of women employees who go for maternity leave each year. Aswathappa and Dash (2007) explain that Coca Cola Company has developed common human resource policies across all its worldwide branches. They have developed common compensation packages in comparison with the local best companies. Corporate human resources undertake two-week orientation session for their employees from twenty-five operating divisions. The company encourages sharing of human resource policies globally. Global experts are US based compensated. BA (2010) ascertains that British Airways undertakes intensive employee recruitment and selection programme. The company believes that it is important to get the right people from the beginning. Right caliber employees perform well in their jobs and the company realizes cost effectiveness. British Airways was unprofitable during the 1981/ 1982 financial year. In 1982, the airline conducted a research to identify some of the challenges it was experiencing. Research revealed that the company’s passengers were not satisfied with the services of British Airways. As a result, the airline launched an extensive customer-training programme for 12000 staff who had direct contact with customers. The target employees included baggage handlers, engineers and pilots. Customer first teams were established and tasked with coming up with innovative ways of improving customer satisfaction. Employees worked as a team and the company started improving financially. Employee training improved customer satisfaction as the quality of service improved. British Airways ferried 23.7 million passengers and reported a profit of £ 44 million in February 1995. The success was partly attributed good human resource policies that the company had adopted. A survey undertaken in 1992 indicated that employees rated British Airways as a bad employer. Therefore, the company found it difficult to retain and develop committed employees due to its poor working conditions. In 1997, the airline employees protested against a new pay that the company’s management tried to impose without involving the staff. According to Kaila (2005), employers who provide childcare referral services for their employees save £2 foe every £1 spend on the service. Therefore, employers are able to save an estimated £50 million annually for providing the service because of reduced absences. 10.0 The Data Collected The data that collected from relevant publications and reports were majorly quantitative. However, there are some few quantitative data. The information collected shade light to the human resources policies especially in the areas of selection and recruitment of employees, compensation and benefits for the employees as well as training and development in Barclays Bank, British Airways and Coca Cola companies. The data indicate the importance of employee guiding policies and its implication to the overall performance of the company. 8.1 Barclays Bank Barclays emphasize on teamwork during the implementation of company’s activities. In addition, the company has a plan to develop and upgrade its talented employees. The company recruitment policy states that the recruited must undertake a series of four placements within two years in various departments of the company. Seasoned persons in the banking industry mentor young and inexperienced graduates. This enables the employees to develop competences in management, other areas of interest, leadership, project management and marketing. The company provides £250 for each employee each year for personal development. In addition, the company provides other financial and non-financial assistance for employees who decide to undertake professional courses. The bank has developed its human resource policy over a long period. Barclay bank suffered disputes and strikes in 1997 after the introduction of performance related pay. However, in the year 2000 the bank and trade union established a new partnership agreement. The partnership consulted over human resource policies at an early stage. The partnership promotes setting up of policies including those on flexible working and career breaks (Armstrong and Brown 2006). The bank experience low employee turnover of about 11.5% annually. 8.2 British Airways British Airways have put in place good human resources policy that aims at attracting and retaining the top talent. As a result, the company has made financial improvements over the years. This is true because the company made its first profit in 1995 after a long time and success was attributed to improved working conditions. The company has continued to make good profits thereafter. The company made £883 million in 2007/2008 profits as compared to £611 million profits made in 2006/2007. British Airways has developed training and development policy that has been integrated into company’s activities. The company allocates millions of pounds for the training of its employees each year. In addition, it has adequate library facilities and learning materials. The training emphasizes teamwork, leadership development, presentation and negotiation. British Airways offers incentive compensation fit for blue chip companies. The company has the following benefits; employee share schemes, holiday entitlements, bonuses, profit share scheme, health care schemes, reduced airfare and travel discounts for employees, social amenities and subsidized staff restaurants. However, British Airways faces the risks of industrial actions. The company’s cabin crew announced a three-day strike on March 27, 2010 and March 30, 2010 after the company withdrew an offer to increase their pay. The company’s employees have not been in good terms with the management claiming that the chief executive Officer Mr. Willie Walsh was opposed to negotiated settlement. 8.3 Coca Cola Company Most employees of Coca Cola Company admitted that the company is one of the most difficult to work in. The employees in the company feel insecure. They claim that the management is not providing the required leadership. Most employees in the company feel that the workload is too much and that they are not appreciated. As a result, there is high staff turnover in the company. Coca cola had faced numerous strikes. More than 100 workers at Wakefield protested on bad human resource policies. This is because the management needed the workers to sacrifice overtime rates and bonuses. The workers complained that the company was earning profits and little was trickling down to them. The company has a structured internal selection interview process for all its internal employees. However, the company contract search firms to find talents for jobs in salary grades 10 to 13. Most employees that were surveyed in 2005 complained that internal selection process was unfair. African American employees felt that they were discriminated in the selection process. In addition, selection disregarded competence and qualifications of individuals. The employees were also concerned with insufficient feedbacks after the interview. Compensation of employees depends on what other companies offer their employees in the locality in which it operates. The company made drastic changes in the compensation process in 2004. Grade 10 employees do not receive stock options any more and grade 11 and 12 employee had their stock option s reduced. As much as some of the employees feel that the company is hard to work in, the company invest in human resources development. The company has a Coca Cola University (CCU). CCU play critical role in equipping company’s employees with practical skills and knowledge needed in the market place. The university also conducts research and provides coaching for the Coca Cola employees and its associates. 11.0 Analysis It is evident that companies that have vigorous and intensive recruitment and selection process end up getting the best talent in the market. However, good recruitment process should be accompanied by good policies that encourage them to stay and work for the company. In addition, there should be a fair and transparent employee recruitment process to earn the trust and confidence of the top talent. Barclays and British Airways have lower staff turnover as compared to Coca Cola Company. The human resource policies of Coca Cola are not employee friendly and the company loses top talents yearly as well as time because of numerous disputes and complains. From the above data collected, it is evident that different companies apply different types of human resources policies depending on the nature, size and the geographical area. Coca Cola Company experiences employees out rage more often. The situation is so bad that employees do not discus or negotiate their working conditions. Instead, they decide to look for other companies to work for. Poor resource policies may earn the company more profits in the short time but the company have the trouble of continuously hiring new staff to replace those who work away. Even companies with good human resources policies can experience industrial actions. This is often real when the employees want to share the increasing profits with the company. In that case, the employees do not work out of the company but rather involve trade unions to help them negotiate the pay rise. 12.0 Conclusions Good human resource policies have indicated a strong positive correlation with increase in company sales, stock values and return on assets. In addition, the companies have recorder lower staff turnover rates. It has also been established that recruiting the best talent help in increasing the pace of company’s growth and development. Each company has its own unique human resources policies in place. A fair and effective employee recruitment and selection process promotes company’s transparency and trust in the work place. The companies should try as much as possible to develop and implement good human resource policies that uphold the rule of law and human rights. In addition, it is important to develop fair and transparent employee selection criteria at all level in the selection and recruitment process. This enables the company to get the top cream talent with the capability to drive the company forward even during hard economics times. Furthermore, employees develop loyalty to the company and become courteous to their colleagues. It is important to continuously develop and upgrade skills and capabilities of employees. This enables the company to respond faster and appropriately to the changing socio-economic conditions. Finally, the company should compensate its employees well. If the company is making good profits, employees who generate the profits should receive incentives as per their contribution. 11.0 Recommendations 1. Companies should develop vigorous and intensive employee recruitment process to attract the best talent to the company. 2. Companies should develop ways of tracking new recruits to analyse the trends and likely intervention to develop and retain the talented employees. 3. Companies should develop compressive recruitment and selection plan that is aimed at reducing or eliminating discrimination and other unfair practices during recruitment process. 4. The company should integrate training and development clause in their human resource policy to encourage employees learning and development. 5. The company should compensate its employees well. This increase employee satisfaction, loyalty and commitment. 6. Companies should implement flex times and job sharing to distribute the work evenly. Incase of seasonal overwork, companies should hire temporary employees to reduce the workload. 12.0 References Armstrong, M and Brown, D 2006, Strategic reward: making it happen, Kogan Page Publishers, London. British Airways 2010, Exploring our world: training and career development resource to fulfil your potential , viewed 7 April 2010, http://www.britishairwaysjobs.com/baweb1/?newms=info2 Aswathappa & Dash 2007, International Human Resource Management, Tata McGraw-Hill, New Delhi. Banfield, P & Kay, R 2008,Introduction to Human Resource Management, Oxford University Press, Oxford. Bogardus, A 2009, PHR / SPHR Professional in Human Resources Certification Study Guide, 3rd edn, John Wiley and Sons, New York. Breyfogle, F 2008,Business Deployment: A Leaders' Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard, BookPros, LLC, USA. Clayton, M 2009,Management Models Pocketbooks, Alresford. Goodwin, N., Gruen, R & Iles, V2005, Managing Health Services, McGraw-Hill International, New York. http://www.thecoca-colacompany.com/ourcompany/task_force_report_2005.pdf Kaila, H2005, Human Resource Management (In Two Volumes), Gyan Publishing House, New Delhi. Katou, A & Budhwar, P 2007, The Effect of Human Resource Management Policies on Organizational Performance in Greek Manufacturing Firms. Thunderbird International , USA. Read More