DHLs Human Resource Practices - Case Study Example

Word Count: 2000

Table of Contents

Introduction3

Review of theories and models3

Performance Management3

Reward system5

Findings9

Performance management9

Reward system10

Conclusion13

Recommendations14

Reference List15

• Introduction

The human resource practices has gained immense in the business industry due to its significant impact on the workforce management and their retention. Previous researches showcases considerable evidence that links human resource practices with the employee turnover ratio and their commitment towards the organisational goals. The sustenance of business in a knowledge based society is significantly determined by the strength and potential of its workforce (Munusamy Naidu, 2010). Organisations in the present era emphasizes on motivating their employees with the intention to retain talents which in turn enhance their competitive advantage. Needless to say, the concept of employee retention and their long term sustenance has become the key challenge in a constantly changing business scenario. Effective human resource practices should be in place in order to retain talented employees within the organisation. Additionally, human resource management is viewed as the potentially unique tool to generate sustainable competitive verge for the firms.

The key objective of the study is to analyse the impact of human resource practices on employee’s job performance, their involvement with the company policies by entirely focuses on DHL Company. The study will identify two different topics of HRM which will be further investigated by using appropriate theories and models.

• Review of theories and models
  • Performance Management

Performance management is considered to be an integrated process of reviewing employee commitment along with the incorporation of goal-setting strategies through the performance appraisal and development framework (DeNisi and Kluger, 2000). The concept of performance is mainly concerned with the objectives of how an employee is working, the development attempts to enhance their performance, strategies to maximise employee contribution within the company.

360-degree framework

This typical framework is known to be the multi-source feedback process through which the individuals receive extensive feedback on their performance from various stakeholders. The 360-degree performance feedback is mainly obtained from the direct reports, feedback collected from the line managers, colleagues, external and internal stakeholders and individuals. DeNisi and Kluger (2000) suggested that the framework of 360-degree feedback has better validity due to its unique contribution in performance enhancement, individual growth, greater awareness that will eventually lead to organisational growth. According to Nowack and Mashihi (2012), this effective tool is useful for variety of purposes that include determination of pay, planning of succession, placement of job and making decisions in performance appraisal.

The 360-degree feedback instrument is a typical questionnaire that is used to assess specific behavioural dimensions, competencies and skills. Majority of organisations incorporate the sophisticated computer systems that has inbuilt configuration of completing the questionnaire, generation of feedback reports and electronic delivery (Kwon and Hein, 2013).

Consequentially, 360-degree framework systems enlighten greater insights and gives out various benefits that enhance organisational effectiveness and receptiveness to change. However, it has been found that there can be a significant difference between the ratings provided by managers to that of self-report created by individuals. In response to this, Kwon and Hein (2013) argued that, attention should be given on performance goals and task performance of individuals rather than considering the self reports. Moreover, the model should consider the specific recommendations for improvement along with the implementation of goal-setting interventions which in turn will make it more effective.

• • Reward system

Benefits or rewards are considered to be an essential element for the development of employment relationship. Human resource managers exploit the tool of rewards in order to facilitate the employees with financial protection, support work-life balance, enable access to healthcare and safety programs, etc(Worldatwork,2011). In relation to employee benefits, the total reward framework and approaching total reward systems acts as the differentiator for any organisation. This particular framework is effective and has significant positive impact on employee attraction, their retention and engagement.

Total reward framework

Allen and Kilmann (2001) incorporate the total reward model and demonstrated it through its five key elements and dimensions that collectively demonstrate the strategy of a firm to attract, motivate, engage and retain employees.

Figure1: Total Reward Model

(Worldatwork, 2011)

Each of the five elements are used as the “tool kit” which is utilised by an organisation to offer and align value prepositions which in turn will create value for both the employee and organisation itself. Total rewards model is an effective tool that leads to satisfied, productive and engaged employees, which in turn develops desired performance and constructive results of business for long term.

O'Boyle and Hassan (2013) described each of the five elements of total reward system in the following manner:

• Compensation- The monetary payment provided to an employee by an employer for their rendered services (that include skills, time and effort). Pay includes both the fixed and variable component respective to the level of individual performance.
• Benefits- It is a program designed by the employer to supplement the financial compensation received by the employee. Workplace benefits can be anything ranging from retirement and savings program, health protection benefits, job security, etc (Stefenson, 2004). The benefit or reward program is particularly designed to protect the interests of employees and their families.
• Work-life balance- Employees focuses to maintain the work-life balance of employees by designing a significant set of organisational policies, philosophy and programs that enables the employees to maintain a balance both at home and work.
• Performance and Recognition- Performance considers the alignment of team and individual efforts in order to attain the organisational objectives which in turn will lead to success. Performance management can be done through establishment of expectations, demonstration of skills, assessment, feedback and improvement plans (Tenhiälä and Lount, 2013).

On the other hand, recognition relates to the special attention given to successful actions of employees, their efforts, performance and behaviour (Tenhiälä and Lount, 2013). Both the formal and informal recognition programs immediately acknowledge the contributions of employees. This form of recognition can be in terms of cash and non-cash (i.e. certificates, dinner, verbal recognition, trophies, etc).

• Development and career objectives- Development include the incorporation of training and learning modules designed for employees to enhance their skills and competencies (O'Boyle and Hassan, 2013).

Career opportunities consider the advancement of employee career goals by offering them promotion, opportunities to attain higher studies so that talented employees are deployed in the position (stefenson, 2004).

Worldatwork (2011) suggests that the implementation of the entirely new or revised framework of total reward system can always be challenging. In order to boost the rate of success, the human resource experts must project the model using four phases mainly, implementation, assessment, design, execution and evaluation.

Fig: 2. Four phases of Total Reward Model implementation

(Kwon and Hein, 2013, p. 32)

Phase 1: Assessment

This phase mainly considers the evaluation of existing total reward system of the organisation and then generates ideas to improve it by identifying the present pitfalls. This task will include survey of benchmark, analysing the present reward system, employee acceptance, etc.

Phase 2: Design

This phase acknowledges the reward strategies by considering the organisational attributes to reward system. The reward strategies include pay compensation, personal and professional opportunities, workplace benefits, etc (Allen and Kilmann, 2001).

Phase 3: Execution

After designing the new system of total rewards, it moves to the execution phase in order to put the new system in place. This phase considers a number of attributes that include eligibility for rewards, support from top management, validity and reliability of performance data, etc.

Phase 3: Evaluation

In evaluation process, the Human resource experts’ compares desired results of total reward system with that of the actual executed results.

• Findings
  • Performance management

Deutsche Post World Net forms the worldwide network of DHL organisation by integrating three main subsidiary companies namely, DHL, Deutsche Post euro express and Danzas. Consequentially, the company initiated their worldwide integration program with the aim to synchronise all of their business processes in order to ensure consistent application of its businesses in all global locations. The company needed to develop a team of efficient managers to integrate and grow the new businesses successfully (Deutsche Post DHL, 2014). The newly merged organisation found no clear means to identify the skills gaps of potential leaders and reduce these gaps to build a talent pool.

Tailored to its own competency framework, DHL incorporated the online 360 degree feedback framework, in response to this situation. The DHL HRM utilise this system for talent management along with its integration in other competency based HR processes that include performance management, talent review and senior development programs(DeNisi and Kluger ,2000).The 360-degree feedback process allows the line managers, subordinates, peers and colleagues to provide their individual personal development feedback. As DHL has used the online tool of collecting 360 degree feedback, it allows a more streamlined structure that could be applied cost-efficiently throughout the huge network of new organisations.

The online 360-degree questionnaires are uploaded and made available across all DHL portals globally, followed by the extensive programs of testing and validation with the main users. DHL incorporate HR technology to initiate and complete full 360-degree feedback process for each of its employees and produce a detail 360-degree feedback report for individuals within a period of 20 days (Kwon and Hein, 2013). On evaluation of the feedback report, the individual gain an insight on the improvement areas and then develop a personal development plan under their own initiative.

The 360-degree feedback approach clarifies the goals and objectives anticipated from the managers whose performance is being reviewed. It also facilitates the manager to discuss their findings in an open and non-threatening manner with their immediate management line.

• • Reward system

With the aim to drive employee engagement at Deutsche post, DHL implements online total reward. DPDHL created the myRewards system in order to facilitate its employees with more transparency on the individual compensation and benefit packages (Munusamy Naidu, 2010). The total reward program was developed to explain the potential and value of these packages to the senior team and make them realise how much they are valued across the various departments of business.

The myReward interface was built on a responsive design platform by collecting and verifying data so that employees can access the system from their laptop, smartphones and desktops.

Figure 3: Deutsche Post DHL online page of myReward system

(Deutsche Post, 2014)

The figure shows the landing page where the employees can view three main components of their compensation package, which is annual target cash, allowances and benefits and long-term incentives presented in pie-chart (Nowack and Mashihi, 2012) .This functionality allows the employees to understand their package structure and alignment of their package with the corporate pay philosophy. The users are facilitated with the access to archive data which in turn enable them to track the evolution of compensation package over time.

Figure 4: DHL myReward online portal

(Deutsche Post, 2014)

Figure 5: DHL myReward online portal

(Deutsche Post, 2014)

Besides the improved transparency on the individual level, myReward system allows a constant and aligned communication across the global operations of DHL and permits the executives to remain in the same page. This reward system has positive aspects for the managers as well. It allows the HRM experts to practice market comparison across the divisions and regions.

• Conclusion

DHL was clear to in its decision to invest adequate resources in developing advanced system of performance management by incorporating its own competencies that would be globally applicable. The introduction of online 360-degree feedback process enables the DHL executives to find essential areas of improvement in the reports that are presented in jargon-free language so that individuals can easily respond without any confusion.

The concept of myReward was greatly accepted by the executives of DHL and more than 85% of the respondents have expressed their gratitude towards the inconceivable accuracy of data. Moreover, this process of reward system is rolled out across the overall business, which also plays an essential role to maintain the pipeline of talent in future. Moreover, the functionality of the total reward system is in place for the managers who are able to create virtual statements for the potential hires in order to provide apparent demonstration of their potential earnings.

Hence, the two significant topics of human resource practices are well-implemented at DHL. Both the systems of 360-degree feedback and myReward system help the HR experts to have more meaningful and effective communication with the employees.

• Recommendations

360-degree feedback model can be better implied on the purpose of development rather than utilising it for decision-making and that it should not be used on one-off event rather on regular occasions to evaluate its effectiveness. The system can be successfully leveraged by providing proper training and guidance on its utilisation so that it can be reviewed and evaluated appropriately.

• Reference List

Allen, R.S. and Kilmann, R.H., 2001. The role of the reward system for a total quality management based strategy. Journal of Organizational Change Management, 14(2), pp.110-131.

DeNisi, A.S. and Kluger, A.N., 2000. Feedback effectiveness: can 360-degree appraisals be improved?. The Academy of Management Executive,14(1), pp.129-139.

Deutsche Post, D.H.L., 2014. Code of Conduct. [online] Available at: <http://www.dhl.co.in/content/dam/downloads/g0/about_us/code_of_conduct_en.pdf> [Accessed 10 June 2016].

Kwon, J. and Hein, P., 2013. Employee benefits in a total rewards framework. Benefits quarterly, 29(1), p.32.

Munusamy Naidu, K., 2010. The Influence of Human Resource Management Practices on Employees Work Related Attitude and Behavior: Examining the Effect of Job Embeddedness (Doctoral dissertation, USM). [online] Available at:<http://eprints.usm.my/23993/1/The_Influence_of_Human_Resource_Management_Practices_on_Employees_Work_Related_Attitude_and_Behavior_Examining_the_Effect_of_Job_Embeddedness.pdf> [Accessed 10 June 2016].

Nowack, K.M. and Mashihi, S., 2012. Evidence-based answers to 15 questions about leveraging 360-degree feedback. Consulting Psychology Journal: Practice and Research, 64(3), p.157.

O'Boyle, I. and Hassan, D., 2013. Organizational performance management: Examining the practical utility of the performance prism. Organization Development Journal, 31(3), p.51.

Stefenson, T., 2004.Performance Measurement at DHL Solutions. Routledge Informa Ltd. Available at:< http://epubl.ltu.se/1402-1617/2004/294/LTU-EX-04294-SE.pdf> [Accessed 10 June 2016].

Tenhiälä, A. and Lount, R.B., 2013. Affective reactions to a pay system reform and their impact on employee behaviour. Journal of Occupational and Organizational Psychology, 86(1), pp.100-118.

Worldatwork, 2011. Total Rewards Model. [online] Available at: <http://www.csae.com/Portals/0/CSAE%202014/Anderson%20Handout%201.pdf> [Accessed 10 June 2016]