Human Resource Management In ABC - Essay Example

xxxxx No. 12345 HUMAN RESOURCE MANAGEMENT IN ABC ABC of XYZ Department of Management Sciences 12 December, 2011 Table of Contents Contents Page No 1. Introduction 03 2. Overview of Human Resource Management Policies in ABC 03 3. How to Improve HRM Practices in ABC Components? 05 3.1 Soft Model of HRM 05 3.2 Maslow’s Hierarchy of Needs Theory 06 3.3 Herzberg’s Two Factor Theory 07 3.4 Organizational Behavior Modification 07 3.5 Performance Measurement and Measuring Tools 08 3.6 Leadership Styles for HRM 11 Bibliography 12 1. Introduction In present scenario, the strong competitive environment demands and enforces the companies to emphasize on human being as the most vital resource from available resources. There are several companies which have taken a cost effective edge against their rivalries by making the human resource as a major competitive advantage. But research and review of literature of different organizations elucidates that modern HRM is the key to success in this scientific era. The motivated staff, good working conditions, an appropriate appraisal and promotional policies, welfare minded managerial lobby, and trained professional employees are the key ingredients of any good HRM model. This paper is actually an analysis on the reports of two human resource mangers Scot and McAfferty, detailed by CEO of ABC. The paper deals with the overview of the report of two HR managers with respect to ABC, the limitations and shortcomings of ABC’s HRM policies and discusses number of possible theories that can be opted by ABC managers and higher authorities to implement and enhance its HRM policies, operational activities, and improve its organizational change process. 2. Overview of Human Resource Management Policies in ABC Number of researches have been done on human resource management (HRM) in the past highlighting the factors effecting human resource and eventually the performance of organization (Steijn, 2002). One of the two leading factors is the individual differences e.g. gender, age, race, and qualifications (Reiner & Zhao, 1999). The second factor is the work environment which acts as a primary determinant to the job satisfaction and ultimately affects on the overall performance of the organization (Herzberg, 1966). The wisdom received from the reports of Scot and McAfferty is that involvement of ABC employees is crucial not only to the success of the company but also for the organizational change. Throughout the hierarchy of ABC, each employee must have clear concepts and awareness regarding the organizational strategy (Huang, 2001). The case of ABC is actually a failure of the organization to cope up its human resource with its vision and strategic objectives down from the top. The lag in terms of human resource management has caused a potentially widespread change of behaviors in the company. The reports primarily indicate the lack of modern applications of HRM models. There is no HRM department in ABC and only a mid-level manager is handling the issues of HRM. This eventually resulted in, although loyal, but ineffective workforce due to lack of prerequisite training. It is actually a failure of training aspect of HRM policies. Lack in training or insufficient training is the biggest failure of human resource management because it acts as the hurdle of highest gravity to achieve a complete organizational change (Bunch, 2007). Rare movement of employees is an example of poor working environment for employees which results a demoralizing attitude in them. In fact it is the disregard to Hertzberg’s two factors theory (Herzberg, 1959). Both the human resource mangers proposed a through cultural change in organization through the modification in staff behavior as well as by replacing the existing HRM policies by modern HRM models and motivational theories. They emphasized that staff is required to reconsider its behavior with respect to work i.e. how a specific task can be accomplished and how their lack of knowledge, training, and attitude act as an external hurdle. Three employees related activities are required to be addressed i.e. staff participation (it demands a democratic style of management from a HR managers), creating willingness to change (it needs organizational behavior modification theory), and sustaining the momentum with respect to change (Doorewaard and Benschop, 2003; Burnes, 2004). Formulation of a comprehensive HRM policy will benefit the organization in the long run. 3. How to Improve HRM Practices in ABC Components? On the basis of reports of Jane Scott and Arlene McAfferty, Chief Executive Gordon Watson along with senior executives can bring substantial changes in the overall working environment of ABC Company. Number of human resource management and motivational theories can be applied to bring effective changes. However, these HRM practices will depend up on ABC’s vision, mission, strategic objectives, and some external factors as well. 3.1 Soft Model of HRM Soft Model of HRM (also known as Harvard Model of HRM) will be best suited for ABC. The model depends upon two factors i.e. situational factors and stakeholders’ interest (Beer et al, 1984). The situational factors of ABC are influenced by internal and external environment like target market conditions, business and corporate strategies, social norms, scientific advancements, managerial styles etc. as far as stakeholders’ interests of ABC are concerned, they will deal with short term policies like dealing with government agencies, employee unions, and management of employees. The Soft Model of HRM will assist the HR managers in four facets of employees’ administration as shown in the tabular form below. Flow of human resource Recruitment, selection, staffing, performance measuring, promotion, suspension or termination etc Reward system Pay, job recognition Employee empowerment Responsibility, authority, and delegation of powers Work system Alignment of employees with respect to work and demand The application of above model will be quite useful for ABC in terms of four Cs i.e. it will facilitate the HRM policies with commitment, competence, congruence, and cost effectiveness. Commitment will produce two effective results. First, it will improve the performance level of employees and their loyalty to ABC and secondly it will enhance the employee’s worth in the company. In terms of competence, the organization will develop a solid base which will attract the new employees to the company and will retain the existing staff. The third element of HRM i.e. cost effectiveness is associated with wages, benefits, welfare, absenteeism, and strikes. The congruence is the prediction that with passage of time congruence will develop in ABC between its operational strategies and HRM policies. According to Scot the ability of employees to process the orders quickly was hindered by a lack of flexibility on the shop floor and staff was unable to move between press machines, finishing machines and assembly machines. Such working environment discourages the motivation level of the staff. Maslow’s hierarchy of needs theory and Herzberg’s two factor theory can be applied to improve the working conditions in ABC. 3.2 Maslow’s Hierarchy of Needs Theory Abraham Maslow presented the hierarchy of needs theory with two assumptions. First, human needs are always based on either the desire or avoidance. Secondly, after the satisfaction of one desire, another desire developed in human (Daft, 1997; McCoy, 1992; Quick, 1985). The theory basically addresses the incentive aspects the employees want from the organization. ABC staff is very much loyal but even then get short of achieving the tasks. It might be due to less welfare structure from ABC which has probably created passive laziness in them. By the application of Maslow’s theory, ABC can motivate the staff at the workplace through the following steps. (a) Physiological Factors. Food, drink, sleep, salary compensation and sex (b) Social Factors. Love and belonging among colleagues (c) Social Factors. Love and belonging among colleagues (d) Security Factors. Job security through permanent contracts (e) Ego Factors. High status, job recognition and increased responsibility (f) Self-actualization. Accepting challenging assignment, training and creativity 3.3 Herzberg’s Two Factor Theory The theory was propounded by Dr Frederick Herzberg in 1959. From a primary data of interviewing about 200 accountants and engineers in Pittsburgh, USA, Herzberg surprisingly found that most of the respondents did not consider high pay, good working conditions, company policy and administration, and relations with co-workers as highly motivating factors. Instead, the respondents said that they felt highly motivated and satisfied with their jobs when the factors like achievement, recognition, responsibility and opportunities of advancement were present in their job situations. ABC workforce also consists of 200 personnel. HRM department must identify the strong determinants of the job satisfaction (also called Hygiene factors) and dissatisfaction factors (also called motivational factors) related to staff. Hygiene factors include company policies and administration, supervision, salary, interpersonal relations, and working while motivation factors involve achievements, recognition, work itself, responsibility, and advancements etc (Herzberg, 1959). 3.4 Organizational Behavior Modification Organizational Behavior Modification (OB Mod) is the application of reinforcement theory to people in organizational settings. Reinforcement theory, as presented by B F Skinner (1971) states that the frequency of the desired behaviors can be increased by linking those behaviors with positive rewards and undesired behaviors can be decreased by linking them with negative consequences. Skinner further says that individuals can be motivated by proper design of their work environment and praise for their performance, while punishment for poor performance produces negative results. Therefore, a human resource manager of ABC should analyze the work situation of his people by eliciting their opinions in order to determine and pinpoint the troublesome areas and obstructions to performance. Appropriate changes in job practices / environment and specific goals should be introduced by involving workers in the above-mentioned phases. It must be the responsibility of human resource management to provide assistance to workers whenever they need to facilitate the desired performance. Prompt and regular feedback of the results should be made available and performance improvements must be rewarded with recognition and praise. Even when workers are not able to achieve the desired results, analysis should be made to find the causes of poor performance instead of punishing workers, and ways must be found to help them and praise them for their good efforts. This theory sounds too simple to work, and many behavioral experts and human resource managers have expressed their skepticism about its effectiveness in the contemporary organizations. However, a number of prominent companies have found this technique quite useful. For instance, Emery Air Freight Corporation saved over US$ 500,000 a year by merely inducing employees to make sure that the containers were properly filled with small packages before shipment. Perhaps the strength of Skinner’s approach to motivation is that it is closely linked with the requirements of good managing. It calls for sound planning of various activities, stresses on effective organizing and control through feedback and above all recognizes the significance of communication in the organizational setting to get things going in the right direction. 3.5 Performance Measurement and Measuring Tools In order to determine the performance of employees, it is necessary for the human resource managers to acquire information about them. Generally the main purpose of the measure is to check and enhance the individuals and their collective performance. The performance measure normally considers the evaluation, controlling, budgeting, motivation, promotion, learning and improving aspects of the organization with respect to personnel, strategies, process and systems (Behn, 2003). ABC needs to revise its performance measuring policies. Managers should gather the information from different sources to measure the performance of its staff and organizational standards. These must include personal observation, statistical reports, oral reports, and written reports. Each has particular strengths and weakness, however, a combination of them can increase the probability of receiving reliable information. What does HRM measure is probably more critical than how does HRM measure. The selection of the wrong criteria may result in a serious disorientation. There must be some control criteria in value based companies which should be applicable to all managers. For example, since ABC managers direct the activities of others, criteria such as employee satisfaction or turnover and absentee rates represent the measures of human performance. Additionally, most managers have budgets for their area of responsibility, thus keeping values within their budget might be a fairly common control measure. The comparing approach must determine the degree of variation between actual performance and the standard. Some variation in performance in all activities cannot be avoided. Therefore ABC managers should determine the acceptable range of variation. Deviation in excess of this range should become significant and receive the manager’s attention. In this stage, managers must be particularly concerned with the size and direction of the variation. McAfferty found that the approach to the management of people at ABC was largely unsophisticated and measuring of performance was managed only in the sense that people were disciplined when they fell short of the required standards. ABC requires comprehensive cultural and operational change in the entire organization because they have no proper HRM department. Just a mid-level manager performs some controlling and measuring roles. Numerous performance measuring tools are in vogue in the corporate world. ABC must apply one of the most popular and widely used method i.e. Balanced Scorecard. Other popular performance measuring tools used in human resource management include Six Sigma Approach, Baldrige, EFQM, and APIC, however Balanced Scorecard will be more beneficial for ABC because it is also a strategic tool which deals with 04 strategic perspectives i.e. financial, customer, internal processes, and learning and growth (Kaplan & Norton, 1996). The last perspective learning and growth is pertaining to HRM and deals with continuous improvement and development of the employees along with training, motivation and retention of human resource, critical information for front line employees, and productivity of entrepreneurship etc. The Balanced Scorecard is used as a strategic management system while Six Sigma is usually defined in terms of quality improvement within the organization (Antony, 2008). HRM department of ABC can use best practices of both the Balanced Scorecards and the Six Sigma in design and deployment systems. Both of these systems require the support of top-level management, efforts of a devoted team to bring cultural change, aligned strategy, implementation of improved projects, and the combination of top to bottom and bottom to top development. The Baldrige Award, European Foundation for Quality Management (EFQM) and Army Performance Improvement Criteria (APIC) are some more examples of performance management. Generally these performance tools are applied successfully in a particular timeframe. Since HRM requires a long time to be implemented forcefully, therefore these tools do not best suit to it. Since, Balanced Scorecard revolves around the assessment data to find out where the improvements and breakthroughs areas in performance are required; therefore, ABC must utilize this measuring tool so that the strategies can be re-analyzed to meet the required results. “The goal is not to have a new measurement system; the goal is, in the end, to have a management system” (Kaplan & Norton, 1996). 3.6 Leadership Styles for HRM ABC management has to adopt a proper and suitable leadership which suits the best with respect to their organizational culture. Robert Kreitner (2008) discussed number of leadership styles to cater different sort of activities and issues. The trait approach is the oldest leadership perspective that emphasizes on individual leaders and attempts to determine the personal characteristics which the great leaders share. The approach mainly focused on different traits of great leaders, such as vision, enthusiasm, emotional stability, courage, wisdom, inspirational power, foresight, etc as essential prerequisites. Numbers of HRM models suggest that the democratic leadership is the most effective and productive style which facilitates to share decision making with colleagues, explains to the group reasons for decisions when necessary, and objectively communicates criticism and praise to subordinates. This leadership style motivates the employees and makes them a sense of importance; create a sense of worth in them and a feeling of their task recognition in the company. Bibliography Antony, J. (2008). Pros and Cons of Six Sigma: An Academic Perspective. Beer, M., Spector, B., Lawrence, P. R., Mills, D.Q., and Walton, R. E. (1984), A Conceptual View of HR. in Managing Human Assets. Free Press, New York Chap.2 Behn, R.D. (2003). Why Measure Performance? 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(2008). Management, International Edition, eBay Product Quick, L.T. (1985). The Managers Motivation Desk Book. New York: Wiley Reiner, M. D. and Zhao, J. (1999). The Determinants of Job Satisfaction among United States Air Force Security Police, Review of Public Personnel Administration, 19(3), 5-18. Steijn, B. (2002). HRM and Job Satisfaction in Dutch Public Sector. Paper presented at the EGPA-Conference in Potsdam, study group on Public Personnel Policies Read More