Human Resource Management Strategies - Maggie's Cookies - Case Study Example

Maggie’s Cookies Contents Introduction 3 Analysis of Current Human Resource Management Strategies 4 Human resource capabilities appraisal strategy 4 2.Recruitment and selection 5 3. Training and development of staff 7 4.Reward Management 8 5. Performance Management 10 The appropriate Human resource strategy and its implementation 10 1.Strategic human resource management 10 2.Implementation 12 Conclusion and Recommendations 14 References 15 Introduction Maggie’s Cookies is an entrepreneurial venture started by Margaret Smith in a small town named Nicosia in the United Kingdom. The company specializes in the manufacture and sale of chocolate chip cookies and other types of homemade style pastries and cookies. Margaret Smith along with her husband Pavlos opened up the first cookie shop in a comfortable suburban in Nicosia, Cyprus. The couple identified the scope of opening up a pastry shop, which offered homemade style of pastries and cookies to the customers in the region. The owners of the Maggie’s Cookies shop opened up the first shop by emphasizing on the traditional, bright and clear appearance of the pastry store and on the fresh and all natural ingredients that they imported directly from the main cities of the United Kingdom. The company saw huge success within 5 years of its inception followed by which Maggie opened up three more pastry stores in other locations of the United kingdom, including Nicosia, Larnaka and Limassol. The first store of the company that the owners of Maggies cookies opened up in Nicosia continued to be the primary flagship store of the pastry store chain. Additionally, the owners expanded the business into other product areas like the traditional sandwiches and also offered innovative and new services like takeaway services, in house serving of the traditional sandwiches and pastries as well s the creation of an in store traditional format lounge known as Maggie Deli. With time, Margaret Smith also started considering opening up franchisees for her original business concept and store, Maggie’s Cookies. However, the opening up of franchises and expanding the business in other areas does not seem to be an easy process and involves a number of challenges for Maggie, especially in the area of human resource management as used in the company. Many human resource management issues like high employee turnover rates, mismanagement of employee resources, absence of capable human resource managers and suitable management policies seemed to be working as the weaknesses and constraints in the process of the future business initiatives of Maggie’s Cookies. Analysis of Current Human Resource Management Strategies 1. Human resource capabilities appraisal strategy The human resource groups of a company are the most valuable assets that a company can maintain and develop for achieving long term success and competitiveness in its industry of operations. This is also true for a growing company like Maggie’s Cookies. The human resource management strategies are extremely important in the entrepreneurial ventures and play a critical role in meeting organizational challenges and in making the organization prepared to take up the opportunities in the external business environment (Figure 1). Figure 1: Conceptual overview of HRM and entrepreneurship (Source: Stajkovic and Luthans, 2011) As such, the people in the company should be selected and developed in a manner such that they provide beneficial human capital in the working of the company. The aspect of human capital may include skills, ideas, reasoning, intuition and knowledge, all of which are necessary for Maggie’s Cookies in the process of expanding the business and creating sustainable competitive advantage over other players in the industry (Stajkovic and Luthans, 2011). Additionally, the strategic human resource management system should include the identification of the core issues in Maggies Cookies like high attrition and employee turnover rates, lack of a satisfied, motivated and loyal base of employees, rudimentary and basic human resource management policies and systems, absence of professional skills in designing the human resource management programs, absence of industry specific and contemporary training and development functions, several employee management issues, like stealing of cash and ideas from the company, lack of customer service skills among the employees and a high level of disorganization noted in the organization due to the use of informal and novice methods of strategic human resource management in the company. 2. Recruitment and selection Recruitment and selections is the first phase in the entire human resource management process. Any organization has to first attract and select the most useful groups of people according to the exact requirements of the job roles. The recruitment and selection of the right kind of people for respective job roles within the business of Maggie’s Cookies is the most basic requirement for ensuring suitable human resource management policies and developing a skilled and effective workforce within the organization (Huselid and Becker, 2006). The current recruitment and selection policies used by the owner of Maggie’s Cookies seem to be too upfront and unattractive for the kind of employees that the business needs. The low cost business is currently using an human resource management policy in which the company recruits people who are comparatively low skilled as per the requirements of a service based organization (Leopold, Harris and Watson, 2005). Since the company offers marginally higher payments in salary forms as compared to the industry standards and competitors of Maggie’s Cookies, therefore, the probability of low skilled workers being interested to join the company increases. This makes the workforce group of the company less efficient because the people are prepared to work in the company at low salaries but their services do not meet the standard levels of customer service provision as required in the hospitality sector (Brewster and Mayrhofer, 2012). Providing the customers with excellent and impressive customer care and service is a necessity for companies like Maggies Cookies which suggest that the recruitment and selection of candidates for working in the new stores and franchisees of Maggie’s cookies should be done in a more inclusive and considerate manner that would suit the contemporary business environment of the food and beverages sector in the country.  The company needs to focus on hiring the most appropriately talented and skilled workers who can work as beneficial assets within a service sector in which the business operates. The communication skills of the personnel should be one of the main considerations for the selection of candidates in the company. Also, other primary employee skills like motivation, dedication, loyalty and pro-activeness should also be considered while recruiting candidates in different job roles and designations. The organization should try to filter the number of applications received for a post and then organize and conduct interview processes that would help the interviewers to assess the potentials and skills of the candidates from all the needed perspectives. Developing a basic understanding of the alignment of the personal objectives and goals of an individual with the organizational strategies and goals is also significant in this stage (Bratton and Gold, 2012). Additionally, the personalities of the employees should also be assessed so as to understand whether they would fit into the existing culture of the organization and in general into a service based industry. Additionally Maggie’s Cookies should provide the potential employees with honest and transparent level of information regarding the expectations of the company and other information about the vacant position so that the potential employees can form a realistic idea about their job responsibilities as well as the organizational culture to some extent (Beardwell and Claydon, 2010). This process would help to reduce the high staff turnover rate in the company and would also help to ensure resource formation and competitive advantage for the company in the medium to long term scenarios of the business. 3. Training and development of staff The training and development system used in Maggie’s Cookies is definitely a major weak point of the company. In the modern business environment, when every company is focusing in taking up professionally designed training and development programs to manage and support their employees, the use of basic training and development system in Maggie’s Cookies seems to act as a primary loophole in the human resource management process of the business. In order to make the existing employees of the company more efficient for operating in the front end and back end services of the cookie store, the owner has to ensure that carefully designed induction, on job training and during job training programs are conducted in a timely and value generating manner in the company (Boxall and Purcell, 2003). Since, the problem of high attrition and employee turnover remains a major problem for Maggie’s Cookies, therefore, the owner should train and develop the employees by highlighting their personal and job related needs and requirements so that their loyalty towards the company is increased and thus, the developed skills and talents can be retained within the organization as critical and valuable assets for the business. Definitely, budget remains a constraint for any small entrepreneurial venture, due to which Maggie ahs to consider developing and designing employee training and development systems which are cost as well as time effective and does not call for high expense professional trainers and human resource managers (Jackson, Schuler and Werner, 2011). Suitable types of training and development programs and facilities would not only help to foster better performances but also contribute towards developing a highly skilled group of employees within the organization. Additionally, the provision of training and support for the employees would enhance the morale of the employees and make them assured that the owners of Maggie’s Cookies are not only focused on generating economic and financial profits but they are also interested and concerned about the growth and well being of the employees of the company. This would also help to enhance the image of Maggie’s Cookies as a potential employer among the candidates in the market. Since, a small company like Maggie’s Cookies has a comparatively lesser number of employees working in the company, therefore it is also important for the human resource managers of the company to provide adequate levels of cross training to the human resources so that they can cover up for multiple job tasks and functions according to the needs of business specific situations and in times of business contingencies. Also, the training and development processes of the company should encompass low cost and effective training techniques and strategies. 4. Reward Management An appraisal and reward management systems is mandatory for motivating and involving the employee resources into the organizational objectives and functions. Maggie’s Cookies should try to adequately recognize the efforts and contributions of its employees in different stores, not only in monetary but also in non monetary forms of rewarding and awarding. The analysis of the performances of the individual employees as well as teams should be done on a monthly or quarterly basis and they should be awarded and appraised in front of all the employees and clients present in the stores of the company. This would help to motivate the employee groups land also foster higher involvement and commitment on the part of the employees. Additionally, these kinds of reward and appraisal systems would help to form a competitive and all inclusive organizational environment that is expected to lead to a happy and satisfied workforce in Maggie’s Cookies stores. The reward management process should be aimed at controlling the activities of the employees to an extent and also for identifying the exact development needs of the individual employees working in the company. The reward management processes would also help the company to evaluate and assess the work performances of individual employees which can be used as the information to take key decisions like pay, bonuses, promotions and incentives etc. (Armstrong, 2006). The appraisal system and the reward systems should be linked so that the employees and mangers continuously try to perform better because of the scopes of earning incentives as well as recognition in their roles. Financial and non financial incentives including bonus, perks, medical allowances, recognitions, awards and promotions etc. are likely to further motivate and engage the employees towards improving their own as well as organizational performances. In a small business like Maggie’s Cookies, there need not be any hard and fast rules regarding how recognitions and rewards would be provided to the employees. Some of the common methods and reasons that can be used by the owners of Maggie’s Cookies in the reward management process may be the tenure of service of the employee in the company, attendance records of the employee, productivity and efficiency of the employee, behaviour of the employee, superior performances, customer services etc. The rewards can be given in the form of special merit awards, employee of the month programs, above average performance rewards and similar schemes like these. 5. Performance Management Performance management is an important perspective of human resource management in the modern business organizations. Maggie’s Cookies should take up effectively formulated performance appraisal systems to enhance the job satisfaction and motivation of the employee groups. Different approaches of performance management should be used in Maggie’s Cookies like the measurement of work inputs, the measurement of the outcomes and results at individual as well as group levels and the behaviours of the employees as displayed in their performances in the organization. A proper reward and performance management system can help to reduce the employee attrition rates and thus, reduce the impacts of employee turnover rates on the bottom line of the company. For a business like Maggie’s Cookies, the cost of replacing an employee may vary from USD 7000 to USD 14000. As such, the management of the turnover and recruitment costs of employees are major costs that have to be borne by Maggie’s Cookies every time it has to recruit a new employee in place of an old one. Considering this fact, it can be inferred that the development of the most suitable and practically implementable human resource management strategies are absolute necessities for the company in the business expansion and growth processes. The appropriate Human resource strategy and its implementation 1. Strategic human resource management The human resource management strategy of Maggie’s Cookies should be developed by supporting the corporate and business objectives and strategies of the company by ensuring that the company has a properly qualified and skilled base of employees, the human resource groups aim at meeting the motivational needs inherent to the organization, the employees are supported and developed in a manner so that they exhibit the right level of knowledge and skills to perform their respective job roles in the most effective and efficient manner. The management of the existing and potential groups of employees in Maggie’s Cookies is a pre mandate for creating competitive advantage by making appropriate use of the available and accessible people resources in the company. The use of the resource based strategy for human resource management would be most appropriate for the case company. The analysis of the available people resources in the company should be done before developing the appraisal and other human resource management strategies in the company (Marchington and Wilkinson, 2008). The ability to develop and retain a high performing employee group can help Maggie’s Cookies to create high degrees of sustainability and competitiveness in the dynamic and demanding food and beverages sector of the United Kingdom. Maggie’s Cookies can improve the ability of the business to attract, manage, retain and involve the employee groups and subsequently improve the performance and productivity of the business by applying the PRIDE model of human resource management. The five steps of the PRIDE model includes Provision of a positive and supportive working environment. Recognising, rewarding and reinforcing ethical and moral behaviour among the employee groups. Involving and engaging the people resources in the activities and functions of the organization. Developing new skills, potential and talents of all groups of employees. Evaluation and measurement of the productivity and performance of the employees. 2. Implementation The strategic human resource management process in the company should thus be primarily aimed at developing a strategic approach at managing the employee resources and employee relations by emphasizing on leveraging the capabilities and skills of the people resources in an organization and by focusing on streamlining these capabilities with the organizational strategies for achieving success and competitive advantage. As such, the entire human resource management process should be implemented by considering different aspects like recruitment of the most suitable candidates, supporting the employees by training and development programs and developing human resource management policies that are beneficial for both the company and its employee groups. Figure 2: Human resource management process (Source: Marchington and Wilkinson, 2008) The development of the most appropriate human resource management strategies and policies is necessary in order to ensure that the business expansion process of Maggie’s cookies is adequately supported by the human resources in the company. An action plan should be designed as a part of the strategic human resource management of the company, so that the human resource management can be done starting right from the recruitment and selection of the employees, training and development of the work force to more advanced techniques of human resource management like performance management and reward and appraisal management techniques (Figure 2). The formulation of a strategic action plan would be necessary for achieving the decided objective of expanding the company in a profitable and successful manner (Cloke and Goldsmith, 2002). Both horizontal and vertical fits are necessary to be achieved within the organization. This means that alignments and communication have to be developed at the intra-employee levels and between the employees and their managers so as to develop a competent and organized people resource and a supportive organizational environment within the branches of the company which can contribute positively towards the future growth, expansion and success of Maggie’s Cookies. The evaluation and monitoring of the system of human resource management strategies should be done on a periodic basis so that any kind of redundancies and drawbacks are quickly identified and also the progress and outcomes of the implementation of these strategies are adequately measured. The evaluation process would also help to measure the morale, attitudes, turnover, engagement and proactive behaviour of the employees. The human resource management strategies should further include conducting employee satisfaction surveys, providing flexible working systems, measuring the employee turnover costs and re-examining the human resource strategies as per the changing requirements of the business. Conclusion and Recommendations In my opinion, the business of Maggie’s Cookies is a high potential business which has ample opportunities and resources to grow and expand in a profitable and successful manner. However, in order to achieve these business objectives, the entrepreneurial venture ahs to focus on dealing with the current human resource management issues in a well planned and effective way. There are few constraints of a small business in terms of investing resources and capabilities in the modern strategic human resource management processes and systems. As such, Maggie’s Cookies has to focus on developing these strategies such that they reap maximum benefits while at the same time can be implemented in a time, cost and resource effective way in the company. The company should focus on all aspects of a human resource management system including recruitment and selection, training and development and reward and performance management as all these strategies would allow for the development of a highly engaged, involved and committed group of employees in the company. A small business organization like Maggie’s Cookies would be able to progress and do well by negating the obstacles of the business by redefining the traditional management as well as human resource management strategies as employed within the business. As per my view, the main reasons for high employee turnover rates and low level of loyalty among the employee groups in Maggies Cookies are that the employees in the company are not properly recruited, supported and developed which leads to reduced employee morale and satisfaction. Considering this, Maggie’s Cookies can employ the new strategic human resource management systems as discussed above, in order to attract, develop and retain the best people as per the business and industry requirements. References Armstrong, M., 2006. A Handbook of Human Resource Management Practice. London: Kogan Page Publishers. Beardwell, J. & Claydon, T., 2010. Human Resource Management: A Contemporary Approach. London: Prentice Hall. Boxall, P. & Purcell, J., 2003. Strategy and Human Resource Management. Basingstoke: Palgrave. Bratton, A. & Gold, D., 2012. Human Resource Management: theory and practice. Basingstoke: Palgrave MacMillan. Brewster, C. & Mayrhofer, W., 2012. Handbook of Research on Comparative Human Resource Management. London: Edward Elgar Publishing. Cloke, K. & Goldsmith, J., 2002. The end of Management and the rise of organizational Democracy. San Francisco: Jossey - Bass. Huselid, M. A. & Becker, B. E., 2006. Strategic Human Resources Management: Where Do We Go From Here? Journal of Management, 32, 6, pp.898-925. Jackson, S., Schuler, R. & Werner, S., 2011. Managing Human Resources. Stamford: Cengage Learning. Leopold, J., Harris, L. & Watson, T., 2005. The Strategic Managing of Human Resources. Harlow: Prentice-Hall. Marchington, M. & Wilkinson, A., 2008. Human resource Management at Work: people management and development. London: CIPD. Stajkovic, A. D. & Luthans, F., 2011. Differential Effects of Incentive Motivators on Work Performance. Academy of Management Journal, 44, 3, pp. 580-590. Read More