Impact of the Firms Internal Context on HRD - Coursework Example

Essay 1 Introduction This essay focuses on the contexts in which the theory and concepts of human resource development (HRD) are applied. Particular emphasis is given to the nature and scope of HRD with respect to HRM (human resource management) and its role within and outside an organization. Also considered are the impacts of the internal organizational environment and economic and social conditions on HRD. Human Resource Development Historically, HRD has been considered an inseparable part of HRM. Its central concerns are training and development, career planning and development, and organizational development (Aswathappa, 2008). Over the last decade, HRD has become much more strategic as the effectiveness of human resources use has become more crucial in the realization of business objectives (Tichy et al., 1982). In particular, HRD is increasingly considered central to the strategic management processes of formulating the mission, corporate objectives, and marketing of an organization (Schuler et al., 1987). This has led to the development of the new concept of strategic HRD (SHRD) that enables an organization to respond more effectively to technological, economic, and social changes. Such effective responses require a balance between flexible HRD practices and the necessary congruence between SHRD and competitive conditions, organizational developmental stages, business strategy, and the realities of multinational business (Grieves, 2003). Emerging social issues that give rise to public policies affecting HRD practices are also important. HRM and HRD HRD policies are closely associated with aspects of HRM concerned with investing in people and developing human capital. A primary objective of HRM is to create conditions in which the latent potential of employees will be realized and their commitment to organizational causes secured. Such potential includes not merely the capacity to acquire and utilize new skills and knowledge, but also any untapped wealth of ideas about improving the organization’s operations (Keep, 1989). HRM reaches beyond personnel and organizational levels to consider societal structures involving such matters as legal compliance, benefits, and union relationships. Organizational Role of SHRD Human capital theory argues that firms should protect core competencies through investment in training and development (Lepak et al., 2003), for the value of employees is related to the particulars of their capabilities and skills. Research confirms that SHRD facilitates the development of those core capabilities critical in building up and maintaining competitive advantage by facilitating optimal use of existing firm-specific capacities. It also encourages the development of new capabilities and skills for coping with change. SHRD is sensitive to and has a role affected by both emergent and planned strategies. In planned approaches, it is unlikely that SHRD will have any major role during the strategy-formulation phase. Its most effective contribution will be within the strategy-implementation phase. By contrast, emergent approaches to strategy are embedded in the organization’s social structure (Garavan, 2007). Impact of the Firm’s Internal Context on HRD Particular aspects of an internal context that have an impact on HRD are focus, orientation and practices, including strategic orientation, organizational structure, organizational culture, and leadership. Strategic orientation is especially relevant as it influences HRD practice selection and their priority and importance. Firms pursuing cost-oriented strategies generally focus on skills training that raises productivity and efficiency and are less likely to invest in management and leadership development and knowledge management (Lepak et al., 2003). As firms emphasizing innovative strategies mostly strive to create and build a capacity to respond to change, they need to posses the required internal flexibility. These firms should adopt HRD practices focusing on organization-wide development involving management, leadership, and career planning, as well as organizational and knowledge development (Lepak et al., 2005). Another important element of internal context affecting HRD practices is organizational culture. Firms with domestic structures have more choices with respect to HRD practices, while global firms adopt more corporate-wide approaches. Finally, leadership influence is often manifested in HRD professionals being concerned with bottom-line results and adopting business-partner roles. Leaders increasingly demand HRD efficacy with respect to the maximization of profitability, enhancement of human capital, creation of employee commitment and loyalty, and HR strategies generally. Collins (2003) demonstrates that SHRD enhances firm performance by encouraging leaders to build internal and external social networks that they leverage to enhance the financial bottom-line. HRD in Economic Context Human capital formation is among the critical sources of economic development. It is defined as productive investment in humans, including their skills and health attributable to education, health care, and on-the-job training (Todaro, 1994). Human capital theory addresses, inter alia, the macroeconomics of production and economic development by viewing human capabilities such as knowledge, skills, health, and effort as integral to a nation’s capital along with its financial and natural resources. Human capital theory and HRD are linked through their focus on labour in the process of increasing economic productivity. A human capital approach renders HRD as strategic within an organization for it views employees as a resource that requires training to maintain competitive advantage and increase corporate value (Carnevalle et al., 1990). From this perspective, HRD activities, most specifically training, ensure that a nation keeps up with economic and technological changes. Therefore, linking training with specific job functions and performance requirements becomes strategic in maximizing returns on investment. It is the economic potential and rationale that provides the impetus for investing in HRD. HRD in Social Context HRD has several important socially-related motives. Under conditions of frequent and significant social change, the role of HRD increases, for national economic objectives cannot be realized without considering social structure and welfare. Education, new-technologies implementation, and training all build up social capital ‘understood roughly as the goodwill that is engendered by the fabric of social relations’ and capable of being ‘mobilized to facilitate action’ (Adler et al., 2002). HRD interventions related to social capital can have an impact on many, if not all, aspects of the human life-world, including culture, community, and the self. These three structures of the life-world are reproduced through the ongoing processes of cultural reproduction within an organization, social integration of organizational members, and emergent forms of socialization. HRD practitioners may, at different times, be involved in all three processes. Through these reproduction processes and the three life-world structures, strong links between all processes of preserving healthy organizational cultures, communities, and employee identities become centrally important. For better or worse, all may be subject to HRD interventions (O’Donnell et al., 2007). Conclusions This essay has dealt with the broad nature, scope, and role of HRD as it is predominantly associated with strategic organizational motives, as well as with the economic and social motives of the organization within society at large. Internal and external organizational environments influence HRD practices such that it is impossible to separate them from environmental considerations or discuss them in economic and social isolation. Essay 2 Introduction This essay deals with performance management as a mechanism for helping employees and employers maintain high performance. The following sections consider first, a general overview of performance management, including definitions and benefits for employees, employers, and the organization; secondly, the process of performance management in pursuit of high performance; thirdly, how to deal with unsatisfactory performance; and fourthly, some conclusions flowing from the essay. Performance Management Much evidence supports the idea that through HRM emphasizing performance management, high levels of workforce performance can be achieved. Performance management, conceptualized by Aubrey C. Daniels in the late 1970s, describes methods for managing performance as measured by behaviour and results. It can be further explained as an ongoing communication process of setting goals, self-assessment, manager assessment, peer-assessment (also called 360 degree assessment), coaching, development planning, and evaluation. All this is undertaken through a partnership between employees and their immediate supervisors that involves establishing clear expectations and understanding about essential job functions, how employees’ jobs contribute to organizational goals, what ‘doing the job well’ means in concrete terms, how employees and supervisors will work together to sustain, improve, or build on existing employee performance, how job performance will be measured, and identifying barriers to performance and removing them (Bacal, 1999). While performance management cannot solve every problem, it has the potential to overcome many common management concerns such as micromanagement, time saving in decision making, having less than adequate information about an issue, and mistakes and errors in workplace procedures. In helping employees understand what is expected of them and empowering them with the ability to make day-to-day decisions, performance management becomes an investment that ensures there is no communication gap between employers and employees. Maximizing High Performance Levels Maximize high employee performance levels requires an effective performance management process (PMP). An ideal PMP depends upon organizational needs and environment and must identify key performance indicators (KPIs) for existing human resources. Employees’ performance cannot be maximized unless and until they consider themselves integral to the organization. Such a PMP must ensure focus and clarity by linking individual performance to strategic priorities and organizational values. To be effective, then, a PMP considers the role of employees and supervisors as integral to the system and assigns responsibilities to them while providing quick and easy skill-based learning. In general, a PMP has a planning phase, a performing phase, and a reviewing phase (Development Dimensional International, 2007). A well-planned PMP will have pre-decided timelines for each objective, such as coaching and training requirements, before implementation. The planning phase identifies the human-resources KPIs of the organization and the priorities and objectives of each functional department and its employees, along with the new employee competencies required for their attainment. An ideal planning phase results in a development plan directed at improving the skills of employees. The ensuing performing phase involves monitoring employee performance and providing them with feedback and coaching. In general, the performing phase is a year-round process providing supervisor feedback to employees, or 360 degree feedback. It will involve numberless ratings when assessing how employees meet their responsibilities, such as ‘does not meet standards’, ‘needs improvement’, and ‘meets or exceeds improvements’. Where the employees’ work involves dealing with customers, then employees’ behaviour must be rated accordingly. Overall, the PMP should encourage a partnership between supervisors and employees in terms of accountability and responsibility, with supervisors trained to provide effective employee performance appraisals (State of Oklahoma Office of Personnel Management, 1998). Finally, the PMP must have a reviewing phase which deals with plans for future development. This is realized by collecting data concerning employees’ performances through ratings and other means and analysing such data to determine performance levels. Benefits of Maximizing Performance Several tangible and intangible benefits flow from maximizing human-resources performance. Intangible benefits include helping create a high-performance workplace that involves all personnel from top to bottom, aligning the performance of the workforce with the organization’s vision and mission while providing the framework for doing so, helping identify the key competencies required for employees to achieve functional and organizational goals, and aiding organizational leaders in establishing evaluation strategies to assess effective employee performance. The ultimate tangible benefit then is reducing human-resources costs by ensuring optimal utilization. Dealing with Unsatisfactory Performance As no PMP can ensure an absence of unsatisfactory performance, advance plans to deal with these situations are required. Unsatisfactory performance must be dealt with at the informal level and the formal level (York University, 2007). At the informal level, a preliminary solution might involve the supervisor solving the employee’s concerns on a one-to-one basis. The supervisor could prepare evidence and examples to demonstrate links to the employee’s concerns and detail the implications of poor performance. It is important that the supervisor explains the relevant performance standards and expectations. Training, support, encouragement, mentors, and guidance work well at this level. After the informal meeting with the employee, the supervisor must continuously review his or her performance. Where improvement is inadequate, the problem must be dealt with at the formal level. Formal action must be outlined in discussion with HR department and before taking such action, the employee should be aware of its impending implementation. The HR department’s involvement requires a detailed investigation of the performance concerns and a decision whether the case warrants formal action. The investigation must include clarifying performance issues, enquiring into the circumstances surrounding the performance issues, and gathering factual information and witness statements (Government of the UK, 2009). If it is clear that formal action is required, then one of the following actions can be taken. First, if there has been substantial improvement in the employee’s performance during the interim period, the matter should be closed. Secondly, if there have been some improvements, the matter should be sent back to the supervisor for informal action. Thirdly, if there have been no improvements, the employee should be given a written warning that without improvement within a specified time, he or she will receive a pink slip. Conclusions This essay has concerned performance management issues and the process of dealing with them. Although a PMP plays a critical role in ensuring satisfactory employee performance improvements, the process may not be sufficient to prevent unsatisfactory performance. Such performance lapses must be dealt with before they affect the organization at large. References Adler, P. S., & Kwon, S. (2002). Social capital: Prospects for a new concept. Academy of Management Review, 27(1), 17-40. Aswathappa, K. (2008). Human Resource Management. New Delhi: Tata McGraw Hill. Bacal, R. (1999). Performance Management. New York: McGraw Hill. Carnevalle, A., Gainer, L., & Villet, J. (1990). Training in America: The organization and strategic role of training. San Francisco: Jossey-Bass. Collins, C. C. (2003). Strategic Human Resource Practices, Top Management Team Social Networks and Firms Performance: The Role of Human Resource Practices in Creating Organizational Competitive Advantage. Academy of Management Journal,46, 740-751. Development Dimensional International. (2007). Facts Maximizing Performance. Development Dimensional International Inc. Garavan, T. N. (2007). A Strategic Perspective on Human Resource Development. Advances in Developing Human Resources, 11, 27-48. Government of the UK. (2009). Dealing with unsatisfactory performances - policy and procedure. London: Government of the UK. Grieves, J. (2003). Strategic Human Resource Development. New York: Sage. Lepak, D., & Snell, S. (2003). Managing the Human Resource Architecture for Knowledge-based Competition. In S. E. Jackson, H. A. Hitt, & A. S. DeNisi (Eds.), Managing Knowledge for Sustained Competitive Advantage, 127-154. Lepak, D., Bartol, K., & Erhardt, N. (2005). A contingency framework for the delivery of HR practices. Human Resource Management Review, 1(1), 139-159. O’Donnell, D., Gubbins, C., McGuire, D., Jørgensen, K. M., Henriksen, L. B., & Garavan, T. N. (2007). Social Capital and HRD: Provocative Insights From Critical Management Studies. 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