How Human Resource Management Practices Can Add Value to Pepsi Arabia - Case Study Example

Name Unit name Grade course Professor’s name 24th October, 2011 Group assignment 3: Role-playing HRM-HES best practice Introduction Many changes have occurred in Human resource management (HRM) practices. The changes in this profession have been very influential in determining the success of each organization in terms of man power administration. Lack of an effective human resource management would result to negative growth of a firm and may call for such measures as replacing the human resource department with modern technology or even outsource the human service to other firms at a cost. Technology can be influential in automating some service but HR managers should focus on ensuring HRM activities that can add value to the organization (Noe Hollenbeck & Gerhart 39). Technology can help to ensure an effective process of managing human resource like for instance by having an automatic program to determine employees’ benefits and their usage. HRM is a broad subject that tends to focus on the welfare of the persons hired or employed to do tasks so that they can be motivated to work hard to achieve an organization’s goals (Noe Hollenbeck & Gerhart 40). Right from recruiting the right persons to do a job, follow up measures are needed to ensure that the employees undergo training so that they can be fit to do the jobs (Noe Hollenbeck & Gerhart 45). Besides, the work environment needs to be conducive in terms of environment and health so that the safety of the employees is guaranteed. The paper will focus on the HRM and HES of UAE firm that fails to address the concerns of the human resource management. The issues raised will be addressed with respect to human resources best practices. Case review Pepsi Arabia is one of the Pepsi branches operating in Saudi Arabia. The company is one of the global leaders in food and beverages supply. The human resources department recruits individuals based on the firm’s policies. The main objective in the recruitment exercise is to ensure that appropriate candidates are selected for the job based on academic qualification, skills and experience. The firm’s recruitment policy further stresses on fairness and consistency in the recruitment exercise with some few exemptions. One such exemption happens when several equally qualified candidates are considered. Pepsi Arabia prefers to work with the UAE nationals and internal candidates rather than external (Gitman & McDaniel 67). In such circumstance, minimum experience is waved when considering the nationals. In the view of this paper, the recruitment process fails to have consistency since the initial objective of the firm is to hire people who are best qualified based on academic performance and work experience. The firm might end up hiring inexperienced persons who do not even have passion in growing their talent at work since the job opportunities are offered based on their place of origin. The HRM department of Pepsi Arabia focuses on the 5 strategic HRM activities namely: staffing, training and development, compensation, employees’ relations and HR planning (Lewis et al 34). However, the selection stage fails to consider some of the factors that might result to reduced productivity by the firm. Hiring candidates since they are nationals of the UAE might lead to hiring individuals who may lack the commitment and competence to work (Gitman & McDaniel 70). The reason for this is because the recruitment policy may fail to consider the experience factor when considering candidates with similar qualifications. This policy might fail to work during the current uncertain times. The global economy has been faced by disruption and uncertainty. Majority firms are faced with the task of making difficult choices in order to respond to the changing customer needs, behaviors and competitive risks (Lewis et al 40). In order to survive the uncertain times, high performance will be needed for the purpose of securing a good relationship with the customers and deliver solutions to what they need today. The current uncertain times are characterized by loss of income, reduced purchase power, potential loss and wealth loss. This situation is likely to affect customers from all segments: corporate, institutions and end consumers (Lewis et al 48). Firms everywhere are now feeling the impact of the volatile economic situation and are thus planning to take immediate response by rethinking of long term strategies. This is usually a difficult decision especially when considering protecting the wishes of the customer since the needs of the customers keep on changing. Among the strategies being used by the firms to provide long term solutions include: strategic cost management, customer retention, industrial consolidation, acquisition and globalization (Gitman & McDaniel 73). Pepsi Arabia ensures health sustainability by providing high quality food and beverage products. In order to drive positive change, Pepsi as a global leader ensures that in collaboration with the private sector, nutritional needs of its customers are addressed so as to reduce such cases as obesity. In its objectives, Pepsi stresses on the importance to train people so that they can succeed the management in driving the company forward. Through its talent sustainability goal, Pepsi has continued to expand the global market and recruiting new personnel into the company. In order to ensure that the safety and well being of the employees are met, Pepsi embraces occupation health and safety. Further, Pepsi ensure that human right prevails in its global world. This is achieved by getting rid of any form of discrimination. Being a signatory of the United Nations Global Compact, Pepsi is strict in observing its ten principles including labour standards and those related to human rights. Pepsi also stresses on being environmental friendly by employing efficient methods of exploiting the land, energy water and the way it treats it waste. Pepsi employs methods that are scientifically proven in order to protect the environment (Gitman & McDaniel 77). The importance of the human resource department in any organization can not be under-estimated. In order to ensure firm’s competitiveness, there is need to successfully manage the human resource factor (Noe, Hollenbeck, & Gerhart 51). Research has indicated that in most organizations, HR managers handle HRM practices responsibly and believe that the contribution of the human resource factor in any business is a core mission (Torrington, Hall & Taylor 89). Other managers believe that the HR department does not receive deserved respect due to alleged incompetence and communication with firm’s operations. That is one of the reasons why Deloitte consulting study found out that on 23 percent of business executive in the US believe that human resource performs an important role in operation and strategy outcomes (Noe, Hollenbeck, & Gerhart 52). As such, many mangers believe that HRM practices need to have a relationship with the business strategic direction for them to be effective. This paper stresses on how human resource management practices should play a significant role in realizing business goals, improve service and the quality of products and ensure general effectiveness in business. There are many strategic directions that can be taken by a firm. For instance merger, acquisition, downsizing, growth and even restricting (Noe, Hollenbeck, & Gerhart 54). Regardless of which strategic direction is taken, the issue of HRM in firms plays a vital role of providing value to the employees, shareholders, customers and the community in which the business is located. The term value used in this case does not only refer to the profits made but rather works satisfaction and growth, increased employment opportunity, environmental stewardship and community empowerment through corporate social responsibility (CSR). The firm is expected to use its physical, financial, and human capital in order to create value. The way a firm manages its human capital including the treatment on the employees determine its reputation to the public hence the reputation of the firms brand (Noe, Hollenbeck, & Gerhart 55). This is the reason why some big companies like McDonald’s and Coca-Cola adhere to their training and development, recruitment and growth plan while ensuring that their employees make sacrifices to ensuring that business is sustained (Noe, Hollenbeck, & Gerhart 55). All aspects of human resource management are believed to add value to a firm. These aspects include the criteria a firm uses to recruit, develop, compensate and prepare its employees. In addition to this, the way a firm interacts with the environment can also help the firm to overcome its competitive challenges while at the same time gain value. In order to create value, a firm has to first overcome its challenges (Sims 17). Competitive challenges There are three categories of competitive challenges that face firms today. The first type of challenge is the sustainability challenge; sustainability in this case refers to the firm’s ability to survive a competitive environment which is dynamic (Sims 20). This in turn depends on the ability of the firm to meet the needs of those people who are interested in the firm’s success. Sustainability is challenged by such factors as the ability of the firm handle economic and social change, practice ethical business practices, sustainable use of the environment and natural resources and providing quality products and services. In order to achieve these goals, a firm has to depend on its employees to be productive, innovative, and creative so as to provide good quality customer services. One major issue is how to retain and attract a committed and productive workforce in times of economic crisis. For this to happen, the HR department has to seek ways of providing the short term needs of the employees while at the same time ensuring that the long term goals of the firm are met (Sims 27). Firms also experience a global challenge which comes as a result of competition from global firms. As such firms are entitled to protect their domestic market from goods coming from the foreign markets as well as widen its global market. The challenge of globalization can be overcome by having innovative and creative employees to assists the firm to respond to competition (Noe, Hollenbeck, & Gerhart 57). The application of modern technology in firms practices such computer aided manufacturing, internet and virtue reality can assist a firm in its growth strategy. In addition, technology can assist employees to be more efficient in service and products provision. Companies whose human resource embrace the use of technology gain by having a high performance work system. For such technology to be adopted by a firm there is need to have the human resource capability, policies and work structures and the technology itself (Noe, Hollenbeck, & Gerhart 58). Today, electronic human resource management (e-HRM) is being used by firms to ensure that employees active participate in training and communicate with co-workers and employees around the globe. In order to create value, organizations must address these challenges by motivating, training and having a committed workforce. Human resource management best practices Schuler and Jackson (34) define HRM as policies or practices that affirm puts in place in order to influence the performance and the altitude of its employees. There are several practices that fall under the broad topic of human resource management. These practices are: Analyzing and designing work Human resources needs determination, also called HR planning Recruiting Selection Training and development Compensation Performance management Employees’ relation The HR department has a vital role to play in the administration of human capital to any organization. This department is supposed to keep the records of the employees, evaluate their performance, provide compensation and many other duties in compliance with the labour law (Loosemore Dainty & Lingard 32). The department does this in collaboration with other departments so as to ensure that there is increased productivity. Human resource professionals need to have six core competencies for them to add the required value to a firm. These competencies are: cultural steward, credible activist, strategic architect, talent manager, operational executor and business ally. In addition to these, HR professionals need to effectively execute their administrative functions of recruiting the right personnel, paying benefits to the employees and keeping employees records (Loosemore Dainty & Lingard 34). HR department should successfully build a strong relationship with the employees, managers, community suppliers and customers. What is most important is for the HR department to mobilize its staff to effectively execute its task so as to ensure that the firm grows. This is possible by rewarding the staff members for achieving some of their goals (Loosemore Dainty & Lingard 112). Such goals as achieved when the employees feel that their work environment is conducive for them to perform their duties. This also involves helping the staff members when crisis occur like for the case of hurricane Katrina. In response to this, Avis executive president in charge of human resource ensured safety for his employees by ensuring that there was an effective communication system through telephone numbers which the employees would use to call when they needed help. In addition, the VP gave the employees time to evacuate their families when the disaster worsened. After the storm was over, the employees were asked if they needed any food, shelter or medical aid. Avis trucks were sent to the scene of the disaster to assist in the rescue mission. After the storm, the employees received their full salary even though they had not worked fully (Noe, Hollenbeck, & Gerhart 60). The employees felt that their employer rely cared for them and after resuming work they were motivated to continue working hard. Simmons (10) stresses on why firms need to do ethical business in his article on social corporate responsibility. According to Simmons (10) firms do ethical business according to the relationship it builds with the stakeholders. In this case, stakeholders refer to all those individuals or entities that have interest in the business including the community. The issue of CSR is built on three core values integrity, accountability and justice. Acting responsibly calls for an organization to administer justice and fairness; this is made possible by recognizing the rights of the people. The issue of justice applies more to the managers according to how they treat individual employees. In respect the community, a firm has the responsibility to ensure that the community benefits from the business (Simmons 15). Conclusion This paper has found out human resource management practices if well addressed can add value to the firm. The growth and development of a firm is dependent on the commitment and creativity of the employees. However, HRM only adds value to the business if the right persons are selected for the job, failure to select the right persons could result to having a work force that is not able to address the business needs. After selection, employees should undergo a training and development process on regular basis so as to ensure that they are ready to work. Motivating the employees should not be forgotten since the firm’s growth depends on the human factor. Works Cited Gitman, Lawrence & McDaniel, Carl. The Future of Business: The Essentials. New York: Cengage Learning, 2008. Print. Lewis, Pamela et al. Management: challenges for tomorrow's leaders. New York: Cengage Learning, 2009. Print. Loosemore, Martin, Dainty Andrew & Lingard, Helen. Human Resource Management in Construction Projects: Strategic and Operational Approaches. New York: Routledge, 2005. Print. Noe, Raymond, Hollenbeck, John & Gerhart, Barry. Human Resource Management. New York: McGraw-Hill, 2007. Print. Schuler, Randall & Jackson Susan. Strategic HR Management and Leadership. New York: MCGraw hill, 2010. Print. Simmons, John. CSR and management ethics and morality in human resource management. Social responsibility journal 4 (12): 8-19, 2006. Sims, Ronald. Human resource management: contemporary issues, challenges, and opportunities. London: IAP, 2007. Print. Torrington, Derek, Hall, Laura & Taylor, Stephen. Human resource management. New York : Prentice Hall. Read More