Importance of Strategic HRM Approach in Investment Bank Industry - Literature review Example

HRM Dissertation Proposal Topic: Importance of strategic human resource management approach in Investmentbank Industry: A case study of Goldman Sachs 1.0 Background Strategic Human resource management (SHRM) has gained prominence of the last few decades due to the realisation that an organisational competitive edge depends on the availability of the right human resources (Aswathappa 2005). The focus of HRM is the key skills and capabilities of the human resources that are needed by the company to attain its strategic mission and HR activities. Accordingly, the investment banking sector has witnessed dynamics changes such as economic turmoil, new products and new working methods that require HR managers to implement a proactive and results-oriented approach in management of its human talent. The investment banks have undertaken various measures to attract and retain skilled and experienced security analysts in order to prevent future business losses and maintain the profitability of their businesses (Sims 2002). The aim of the dissertation is to understand the importance of strategic human resource management approach in the investment banking industry and measures that companies in the industry have undertaken to attract and retain qualified and experienced staff. The dissertation will explore the best practices in manpower planning in the industry, the recruitment process, training and motivation and compensation structures that encourage high performance. The dissertation will use a case study of Goldman Sachs in the UK and will rely on interviews and questionnaires in data collection. The research findings will be useful in making recommendations on how firms in the industry can ensure high employee productivity high retention and overall organisational profitability using strategic human resource management approach. 2.0 Preliminary Literature review Strategic human resource management (SHRM) approach involves aligning the human resource management goals with the overall corporate strategy in order to enable the organizations to attain predetermined corporate goals and objectives (Sims 2002). Dhar (2008) outlines that this approach perceives human resources as critical success factor in the attainment of corporate goals and human resource managers utilise proactive measures in ensuring the organization has the right mix of skills. Strategic human resource management is an important function in investment bank sector since it ensures that the company has the required human skills and competencies to perform the functions of the investment banking industry. Investment banks are involved in raising capital and security underwriting, trading securities and conducting market research and facilitating mergers and acquisitions. The recent globalisation has created high demand of investment banking services due to the integration of the global financial systems, growth of multinational corporations, market liberalisation, the emergence of new market securities such derivatives and the need to ensure efficient markets through understanding the financial market trends. Dessler (2003) points out that HRM processes such as manpower planning, recruitment, talent development, motivation and compensation are geared at attracting, developing and retaining the overall strategic capabilities that will contribute to attainment of a competitive edge in the market. Strategic human resource management ensures adequate human resources are available to meet the strategic and operational goals of investment banks. The process enables the investment banks to keep pace with the changes in economic, social and technology that impact on investment banking operations (DeCenzo and Robbins 2007). The HR managers occupy positions in top management of the investment banks and are involved in corporate goal-setting, allocation of resources and reviewing the HR policies in order to ensure efficient utilisation of personnel (Aswathappa 2005). The objective of strategic approach to HRM in investment banks is to develop adequate loyal and skilled employees who can accomplish the business goals in the changing industry environment (Sims 2002). Human resource managers in investment banks are tasked with analysing both the internal and external environment in order to determine the organisational current and future personnel requirements. For instance, an HR manager in an investment bank must understand the economic variables such as rate of economic growth, interest rate levels, the current employment trends and level of private investments in the economy (Rao 2008). In this case, HR managers can be able to predict the future personnel requirements in the company and identify the recruitment sources. Torrington, Taylor and Hall (2005) notes that HR managers must understand the impact of social-cultural trends such as increase in the number of aged citizens, high literacy levels and high population growth on the demand of investment banking services such as retirement benefits management, asset management, and wealth management. The HR management practices should be flexible enough to respond to changes in external environment such as impact of new technologies like cloud computing and online shares trade (DeCenzo and Robbins 2007). According to Rao (2008), investment bank’s HR manager must be conversant with both qualitative and quantitative methods of determining the future personnel needs such as employment trends, succession planning, replacement ratios, and forecasted business expansion potential. HR managers in investment banks use methods such as managerial judgment, Delphi technique, ratio analysis, and work study technique and trend analysis to determine the required number of employees in the future. Accordingly, it is important to understand the factors that may affect the supply of labour in the labour market such as literacy levels, population growth, promotions, and transfers (Sims 2002). Strategic HRM in investment banking sector requires the HR managers to conduct a proper job design that is essential in understanding the reporting and working relationships between various job positions in the organization (DeCenzo and Robbins 2007). For instance, it is critical to clearly outline the job roles and responsibilities in order to understand the candidates’ skills and attributes that are critical in effective performance of the job. The recruitment and selection process is another essential process in managing personnel in investment banking sector and major recruitment sources include job advertisements in newspapers, campus tours, and head hunting of experts in investment and wealth management (Pravin 2006). Goldman Sachs recruitment and short listing process is fair and transparent and criteria must meet the skills and competencies that are essential in effective performance of the job. The HR managers should ensure diversity in their recruitment and selection practices in order to benefit from creative workforce and a variety of talents. Diversity enables Goldman Sachs teams to explore a variety of viewpoints in problem solving and gain better decision-making capabilities. Rao (2008) points out that HR manager is tasked with identification of skills gap evaluation and identification of training needs. The responsible managers must assess the company skills requirements and formulate training programs that will enable the employee acquire the expected skills. Accordingly, SHRM plays a critical part in motivating the employees to improve their productivity and pledge their loyalty to the organisation (Kumar 2010). Goldman Sachs managers provide challenging job roles, opportunities for career progression and performance feedbacks. Another aspect is work-life balance that is essential in order to reduce burn-out and reduce the costs associated with work-related stress (Sims 2002). The work-life programs such as flexible working hours, counseling services and recreational facilities improve the healthy and psychological welfare of employees. Goldman Sachs encourages its employees to undertake healthy lifestyles and engage in physical exercise activities. Employees have flexible working hours arrangements and added benefits such as paid maternity leave. 3.0 What is the importance of strategic human resource management approach in Investment Banking Industry: A case study of Goldman Sachs? The process of managing personnel in an investment banking company is dynamic and complex due to the internal and external factors that influence how the people exert their efforts in their roles and how they behave. The first objective of the research is to critically evaluate the importance of strategic HRM in investment banking industry using a case of Goldman Sachs investment bank. The second objective is to analyse the importance of manpower planning, recruitment and training to investment banks. The third objective of the study is to evaluate the motivational approaches, the performance evaluation and compensation policies that contribute to high employee retention in investment banking sector. The fourth objective is to make HRM recommendations that should be implemented by investment banking industry in order to attain both individual employee goals and overall organisational goals. The research will seek to answer the following questions. a. How important is strategic HRM in investment banking industry b. How can manpower planning help investment banks attain competitiveness in the industry c. How can HR managers in investment banks motivate their employees in order to ensure high employee loyalty and retention d. Which are the best practices that should be implemented by HRM managers in ensuring diversity and creating a work-life balance e. What are the challenges facing HRM in investment companies 4.0 Research Methodology and Research Methods The research study will use phenomenological philosophical assumptions that aim at understanding the experiences of the research participants with the current human resource policies of Goldman Sachs. On the other hand, epistemology assumes that truths can be identified since knowledge entails undisputable truths that can be used to deduce knowledge from a hypothesis (Bryman 2012). Phenomenology is both interpretive in contrast to other research philosophies that are based on scientific methods and thus will be more useful in understanding the factors that have either led to low job satisfaction or high retention at the company (Seale 2004) The approach is essential since it relies on qualitative methods and inductions such as interviews in order to understand the respondents’ perspective. The approach requires patience and good interpersonal skills. Induction is essential since the research outcomes can be generalised to the entire investment banking sector (Bryman 2012). The research study will review available secondary data from previous research studies on the importance and various aspects of strategic human resource management in organizations. The study will utilise published books, journals, government reports, and company reports in order to understand the importance of SHRM. The secondary research is useful in understanding the mission of Goldman Sachs, the importance of investment banks, HRM theories and factors that contribute to high employee productivity and retention in an organisation (Anderson 2004). A qualitative research design is more appropriate in this study since it descries phenomenon that exist as part of the world we live and outlines the attributes of the phenomenon (Seale 2004). Qualitative research method will be used in the research due to its ability to discover concepts and relationships in strategic HRM in order to assist in understanding of the existing theories (Bryman 2012). Although qualitative research is challenging, it is also stimulating and interesting since it entails interacting with people involved in the subject area. The study will utilise the a case study of Goldman Sachs since it is a leading investment bank that has excellent HR policies that are geared at attracting and retaining qualified employees. According to qualitative studies, the use of case studies is more appropriate since it enables the researcher understands the dynamics that exist in a certain setting such as workplace or the company in a particular field of study (Loseke 2012). Case studies offer in-depth and holistic investigations on the subject area through exploration. The case study approach allows researcher to understand real life situations. The case study is more appropriate in understanding the contextual factors that are pertinent in a particular phenomenon of study. However, case studies are time-consuming due to the need of complex analysis of the existing phenomenon (Bryman 2012). The research study will rely on both questionnaires and structured interviews in data collection. The researcher will interview the HR managers on their approach to management of employees and mail questionnaires to the employees in different departments of the company in order to understand their grievances and suggestions regarding the current human resource practices in the company (Loseke 2012). The structured interview data collecting method was selected because it allows a researcher to discover the opinions of individuals on a certain topic especially the sensitive topics. Interviews provide deep understanding and allow the researcher to seek clarifications from the respondents. Other benefits of interviews include the high response rate and ability to ask detailed questions. However, the interview data collection method may be costly and time-consuming due to the need to transcribe and analyse the interviewees’ responses (Babbie 2009). The questionnaire will contain both open and closed-ended questions and will be mailed to a sample of employees of Goldman Sachs investment bank. The use of questionnaires is advantageous since it is cheaper and time-saving. The questionnaires are practical method of data collection and large volumes of date can be collected from a large sample without affecting the reliability and validity of the data (Dooley 1990). The questionnaires can be analysed objectively and qualitative data can be used to test the existing theories when the questionnaire results are quantified by the researcher. However, the data collecting method suffers some weaknesses since it is inadequate to understand the behaviour and some respondents may fail to return the questionnaires (Seale 2004). A sample of 50 employees will be selected using stratified sampling method. The population of employees will be classified in to stratas depending on the departments and then a sample of 50 employees will be randomly selected to form the sample for the study. The sample is enough to ensure credibility and reliability of the study findings. The stratified method is essential since it will ensure the sample represents the cultural diversity of all employees (Seale 2004). The company has a database of employee e-mails and this will be essential in sending the questionnaires to employees while the sampling frame is logical. There are not elements outside the population of employees of Goldman Sachs that will be included in the sampling frame. Validity and reliability form essential components of research design and reliability will be ensured by elimination of measurement error and researcher bias. The validity will be enhanced by including interview equestions that are familiar to HR managers and using simple language in questionnaires (Seale 2004). The research findings can also be generalised across the industry. Data Gathering Activity Details of Sample Method of Data Analysis Which Research Objective This Data Informs. Interviews 5 Senior HR managers Simple statistical software (SPSS) Understand if HRM policies are aligned with SHRM objectives, understand challenges of HRM in investment banks Questionnaires 50 employees from all departments Simple statistical software (SPSS) Understand the level of job satisfaction and loyalty, understand the importance of diversity in the HRM 5.0 Ethical Considerations The study will adhere with research study ethical standards by maintaining the privacy and confidentiality of the research respondents. The researcher will explain the purpose of the study to all participants and outline the measures that will be undertaken to protect their privacy and confidentiality. The researcher will seek the informed and genuine consent of all respondents before they are allowed to participate in the study and the identity of the respondents will be changed in order to adhere to data protection legislation. The participants will have a right to withdraw from the study at anytime without giving a notice to the researcher. 6.0 Research plan and Limitations Research activity Time period (days) Start Literature review 3 Prepare for fieldwork 1 Questionnaire preparation 2 Data collection 7 Data editing 2 Data analysis 3 Research finding analysis 4 Research discussion and recommendations 4 Compile appendixes 2 Bind and submit dissertation report 1 Total days Approximately 29 days The research study will face several limitations such lack of adequate time since a lot of time is needed to adequately explore the topic of strategic human resource management and various functions of human resource managers in investment banks. The study will also encounter financial challenges due to the high budget that is required to prepare voluminous questionnaires and travel to Goldman Sachs investment bank offices to interview the senior human resource managers. List of References: Anderson, V. 2004. Research Methods in Human Resource Management. London: CIPD Publishing. Aswathappa, K. 2005. Human resource and personnel management: text and cases. New Delhi: Tata McGraw-Hill. Babbie, E. 2009. The practice of social research. New York: Cengage Learning. Bell, E and Bryman, A. 2015. Business Research methods. Oxford: Oxford University Press. Bryman, A. 2012. Social research methods. Oxford: Oxford University Press. DeCenzo, David and Robbins, Stephen. 2007. Fundamentals of human resource management. Chichester: John Wiley & Sons. Dessler, G. 2003. Human Resource Management. London: Pearson Education International. Dhar, R.L. 2008. Strategic Human Resource Management. New Delhi: Excel Books. Dooley, D. 1990. Social research methods. London: Prentice Hall. Kumar, R. 2010. Human Resource Management: Strategic Analysis Text and Cases. New Delhi: I.K International. Loseke, D.R. 2012. Methodological thinking: Basic principles of social research design. London: Sage Publications. Pravin, D. 2006. Human Resource Management. New Delhi: Pearson Education India. Rao, P.L. 2008. International human resource management: text and cases. New Delhi: Excel Books. Seale, C. 2004. Social research methods: a Reader. New York: Psychology Press. Sims, R.R. 2002. Organizational success through effective human resources management. New York: Greenwood Publishing. Torrington, D., Taylor, S & Hall, L 2005. Human resource management. New York: Financial Times Prentice Hall. Read More