Human Resource management: cases of IBM and Oracle - Essay Example

? Human resource management Table of Contents Task 4 1a. Personnel Management and Human Resource Management 4 1b. Approaches of HRM followed in theorganization and changes occurring over the years 6 Task 2 7 2a. HR Planning process in the organization 7 2b. Comparison and Contrast between recruitment and selection process of two organizations 10 2c. Interview and Selection process in the organization 11 Task 3 13 3a. Job Evaluation and factors determining pay 13 3b. Performance management for employees 13 3c. Benefits and rewards 14 3d. Application of Maslow’s hierarchy of needs to the reward system in IBM 15 Task 4 16 4a. Exit procedures 16 4b. Selection criteria in the redundancy process 16 Reference 18 Bibliography 21 Task 1 1a. Personnel Management and Human Resource Management Some of the diverging aspects of HRM and personnel management have been highlighted by authors. Torrignton (1989), has described personnel management as a continuous process of growth and evolution in which different fields of expertise has been assimilated and developed. On the other hand human resource management has added a further dimension to the multi faceted role of HRM. It is not regarded as a revolutionary concept by researchers. Armstrong has emphasized on the similarities of the two streams in terms of techniques and procedures, however, the philosophical and strategic context of human resource management has been perceived to be more powerful, effective and relevant in today’s organizational settings (Koster, 2007, p.5). HRM is said to have provided a completely new viewpoint for personnel management and reflects a consistent departure from the orthodoxy of personnel management. The main difference between the HRM and personnel management can be explained using the hard and soft models of HRM. Personnel management is more consistent with the soft model stressing on the aspects of human resource. On the other hand, the hard model focuses on the quantitative, calculative and strategic business aspects of management of the headcount. HRM primarily highlights the management’s interests and considers employees as being means of attaining organizational objectives. Therefore, HRM strictly directs and controls the human resources through databases and qualitative performance management (Koster, 2007, p.6). The main role of HRM which has evolved over the years is developing strategies and policies, systems, standards and processes for attaining business objectives. It maintains compliance with the state, local and federal laws. The HR manager plays the role of aligning department objectives with organizational objectives. His role includes resourcing, recruitment and selection. He is responsible for organizational development and design, change management and performance management. Training and development, employee motivation, compensation management and benefits are some of the other aspects of the roles of an HR manager. In all of the above aspects he seeks to design policies for meeting business objectives and aligns his activities to the goals and purpose of businesses. The strategic role of the HR manager is to drive the organizational performance (Daft & Lane, 2009, p.308). Instead of focusing only on employee welfare, he tries to provide a strategic direction to the department and works in partnership with the business. IBM’s HRM strategies are rated among the best in the industry. Through the initiative of its HR management team, IBM has demonstrated numerous innovative practices and policies which depict great respect and concern for employees. IBM’s recruitment strategies is committed towards a diverse workforce which actively seeks to recruit qualified candidates depending on the nature of markets that it serves and includes women, candidates with disabilities, minorities etc (IBM-c, 2002, p.1). HR management plays the key role in creating strategies for establishment of work life balance in the company’s culture. In all of its activities, the HR management seeks to align strategies and policies with the business objectives of the firm. More than 80,000 numbers of IBMers are found to take part in the company’s telecommuting programs which allow them to work from the customer’s location. This program has not only helped employees to maintain work life balance but has also enhanced their work productivity considerably (IBM-c, 2002, p.2). 1b. Approaches of HRM followed in the organization and changes occurring over the years The organization considered for study in the project is IBM which is known for its rich heritage of technology leadership, core values, innovation and the crucial role that the employees are required to deliver for continuously driving it towards growth and innovation. The values carried by the organization are embedded in the HRM strategies and practices executed in the organization, which is to focus on the success of the clients and improving IBM as well as the world at large. The role of HR managers has changed from implementing HR strategies to becoming strategic partners of the organization. Initially they were primarily associated with looking after employee welfare and managing their work productivity. Now this role has changed and they are required to devise such practices which ensure long term objectives of the firm. Recruitment, compensations, training and development activities, all are directed towards attainment of strategic aims and objectives of the company. In response to changing customer demands, the roles and responsibilities of the HR managers in the company has undergone change. Apart from being an administrator, their job extends to analyzing the industrial trends for standard and regulatory changes and aligning HR strategies according to that. The creation of innovation and innovative strategies catering to the business objectives have evolved as the most important role of line managers. Line manager’s roles do not remain restricted to the looking into the welfare of employees. They rather act as business partners and implement such strategies and practices which can be constantly renewed and reintegrated with the global competitive environment and ensures the best results from employees (Morris & Calamai, 2009, p.4). The ‘HR generalists’ have been increasingly referred to as ‘business partners’ which connotes a more strategic working and closer relationship between the various operational units and HR departments in the organization. Line managers and shared service personnel has acquired a substantial amount of the front-line employees’ activities which has been able to reduce the workloads of employees significantly (IBM Global Business Services, 2006, p.3). Task 2 2a. HR Planning process in the organization The HR planning strategies in IBM seeks to ensure that the right person is placed in the right job role and also at the right time. Increase in the environmental instabilities, demographic shifts, technological changes and enhanced international competition has called for the need for extensive planning in organizations. Planning in IBM is generally done through the interaction between planners and line managers for addressing the HR concerns and developing the short and long term solutions (American Psychological Association, 1990). The purpose of implementing the HR planning strategies was to forecast the business requirements, customer demands, and the workforce demands and options (Bernardin, 2008, p.116). The HR planning process in IBM occurs out of the direct response of the enhanced global competition and the changes in workforce demographics. The planning process seeks to improve the strategic capabilities of the organization. At the fundamental level HR planning refers to the two issues of strategy formulation and strategy implementation. IBM combines the two aspects to develop its human resource planning and implementation strategies (Bohlander & Snell, 2009, p.51). The process begins with analysis of the human capital data and information at present in the organization. It refers to the possession of requisite workforce with the requisite for meeting the business interests of the company. It also refers to the equipping of employees with the right technologies, tools and equipments for meeting present crisis and business requirements. The next step refers to the analysis of future plans of the enterprise in terms of staffing. However, the plan requires making analysis of the future strategies for the company. The future strategies reflect the future human resource requirements or making a workforce demand forecasting (Bernardin, 2008, p.118). Since IBM is a global enterprise this stage requires making analysis of the future workforce and business trends in the global market. This would encompass the need for new skills and capabilities which would be needed. The next step includes making a thorough analysis of the workforce supply in future. This necessarily means projecting then resource availability from the internal and external sources in the organization. This stage is followed by making a gap analysis for reconciling the forecasting the supply and demand for labour. At this stage HR departments make identification of the surplus and critical shortfalls of labour. The next step would refer to the designing the different approaches for dealing with the problem and finally one of the many alternatives would be chosen. However, before selection the different alternatives would be evaluated and monitored after implementation (Bernardin, 2008, p.118). The following diagram would reflect the steps in HRM. Figure 1: Steps in HRM (Source: Management Innovation eXchange, 2010) According to RDI material, planning process refers to finding the right people at the right time, in right numbers, in the right job and in the right place. Although IBM complies with the above strategies, now it primarily seeks to frame strategies catering to the future requirements of the firm. Along with meeting the present skill needs and requirements, training needs requirements, production requirements, it seeks to forecast future business requirements and then fulfil them. Another aspect of difference between the planning process in IBM and that presented in the RDI materials is in the case of failure of the planning process. Generally when the planning process result in low productivity or business loss, a different strategy is applied this might involve employee downsizing, early retirements, or retrenchments etc. However, downsizing is not considered a favourable option in IBM. IBM especially tries to redeploy employees and retrain their staff. Overtime is not considered feasible, rather proactive search for additional work activities with the existing clients or attempts to expand client base is considered to be a more favourable option for the organization (IBM-c, 2002, p.2). 2b. Comparison and Contrast between recruitment and selection process of two organizations The recruitment and selection process of IBM would be compared with that of Oracle in the study. In IBM the recruitment process begins with identifying the various vacancies. For this the positions are posted internally in the organization. The recruitment procedure includes advertising for the vacancies and managing the responses that follow. This is followed by the short listing of suitable candidates and arranging for their interviews. The screening of candidates includes an online aptitude test, followed by a group discussion and an HR round. It must be mentioned that the entire recruitment process is done in compliance to wage and hour laws and regulations. This includes those associated with minimum wages, overtime, piece rates and other elements of compensation and benefits. It follows the global employment standards strictly and ensures that it does not exceed the maximum hours of work as prescribed by the law and pays its employees adequately. Here the employees do not work for more than 60 hours in a week, including overtime, excepting the conditions of extraordinary business circumstances. The labour laws are applicable for all irrespective of gender and the company does not follow any kind of discrimination between the two genders. The company does not employ any kind of forced or bonded labour of any kind or even child labour. It makes use of the relevant and legitimate workplace practices, internships and other programs incompliance with the labour laws and regulations (IBM, 2011). However, the recruitment process in Oracle is conducted through an institution called i-Recruitment. This institution helps managers, candidates and recruiters in the entire process of finding, tracking and hiring of candidates. The basic difference between Oracle and IBM’s recruitment process is that in the former it is done internally without any external agency while in the latter, the organization assigns the entire process to an external agent. The external hiring agency conducts the recruitment and selection process completely for Oracle. The company uses workforce scheduling mechanism helping the organization to decide and allocate particular resources in particular places. The company abides by the labour laws and legislations which are applicable; however, the compensation systems, benefits, payrolls are managed through automated softwares. The softwares are directly linked with the associated costs for each of the HR process and therefore demonstrate the cost effectiveness of the system. Moreover, the softwares ensure that employees are compensated on time and according to compensation laws (Crum, 2002, p.877). 2c. Interview and Selection process in the organization The recruitment and selection process in IBM is done compliance with the aim to cater to the changing technologies with the right workforce requirements. The selection process in IBM begins with the sorting of application forms including the submission of required documents, etc. This is followed by a written examination to test the aptitude of the candidates. The pass mark for the examination is quite high so as to ensure that the best candidates qualify for the position (Catano, 2009, p.26). This is followed by a second interview round which is more of a behavioural round and tests the behavioural aspects of the candidate. The candidate is also screened on his technical capabilities and skills. The candidate is not only evaluated by his or her communication but also by his general demeanour. The candidate also goes through psychological testing and work simulations. The company especially evaluates its candidates on crisis management through crisis simulation techniques (IBM-a, 2006, p.1-3). Since interviews are considered necessary for evaluating the technical and behavioural aspects of the candidate, however, they are not enough to evaluate whether the candidate would be able to adapt to the different situations or his problem solving abilities. The candidate could be subjected to a virtual crisis situation, rather than being subjected to a tough round of interview. There would no interviewer panel. Rather he would be observed externally by a group of members which would consist of people from the management cadre or even the lower level employees. The observation would be evidence of his abilities to manage stressful and crisis situations (Cotton, 1990, p.18). The other alternative to the conventional round of interview would be to absorb the candidates temporarily. This is because many of the eligible and efficient candidates are not able to deliver their best during the interviews and are consequently rejected by large organizations. This was the reason why organizations lose out on precious human resources. The candidate could be taken in and then evaluated for a month on various aspects, like efficiency, competency, communication, adaptability, stress management, crisis management etc. After completion of a month if the candidate is found to be performing well he would be absorbed while on unsuccessful performance he would be rejected (University of Sunderland, 2008, p.6-10). Task 3 3a. Job Evaluation and factors determining pay IBM has changed its conventional point factor job evaluation mechanism with the salary grade system in which the job is evaluated through 10 different compensable factors (Martocchio, 2004, p.242). The factors are used for making assessment of the job’s worth. The new one would slot the employees’ jobs into ten bands on just three factors. The factors are skills, requirements of leadership and impact or scope. In this way the numerous job tiles which existed would be reduced significantly and the salary scales were also reduced. According to the new system, the performance appraisal of employees is linked with his salary or his increments. This approach also allows employees managers to rank employees on a wide variety of criteria based on which their pays vary. An employee highly ranked with his manager would be on a greater salary scale than the other (Dessler & Varkkey, 2009, p.434). In the previous system, an employees’ cash compensation consisted of his base salary, overtime, shifts and various other adjustments. There was no link between pay and performance. However, according to the new system, most employees have more than 10% of their entire compensation directly linked with his performance (Dessler & Varkkey, 2009, p.434). 3b. Performance management for employees The commonly used methods of performance evaluation methods can include self evaluation and appraisal process where an individual’s performance is evaluated by others, such as peers, seniors and subordinates, through a checklist. Invited or imposed performance evaluation refers to the system in which a foreign agency does the evaluation for the organization. It is generally invited by the workforce themselves. The most commonly used method of evaluating performance of employees is the 360 degree feedback system in which the employees are assessed by seniors, subordinates, peers and him. In such cases he has the liberty to take feedback from his manager on any issue related to his performance evaluation. The company also holds regular performance review meetings in which employee makes self assessments and provides managers with the relevant input (IBM-b, 2011). The manger records the performance of the candidate for further review and analysis in future. Calibration is done using the various management reporting tools. The entire system of performance management and evaluation is done against a set target at the beginning of the year which is complemented with a mid-year review system. 3c. Benefits and rewards In the total reward strategy, achievement of goals in not only considered to be the only determinant of rewards where individuals are paid according to the accomplishment of goals and objectives. Rewards can also be in the form of ‘additional time offs’ or ‘flexible work schedules’. As a part of reward strategies, individuals also receive developmental opportunities in the form of promotions or trainings. IBM believes that what gets rewarded decides what gets done. It has oriented its reward strategies in order to sustain its highest performance and most effective culture in its business. This reward strategy completely focuses on the making investments in such programs which recognize results and not just tenure. The design of all the compensatory strategies in IBM is such that provides market based compensation that is completely performance driven. This is applicable for all sections and divisions existing in the company. The highest contributors are the maximum rewarded and the reward is also in the form of variable bonuses as well as base salaries. Moreover the basic pay is comprised of competitive salaries which are market determined and also determined from the differences existing between the geographical locations where the organizations are located (David, 2009, p.313). 3d. Application of Maslow’s hierarchy of needs to the reward system in IBM Maslow has put forth the fact that the basic needs of individuals are attained through a progression from the lower order needs like the physical needs towards the higher order needs such as the aesthetic needs, self actualization needs, etc. Since a large organization like IBM can be stratified into various levels according to job structures, it is possible to apply Maslow’s hierarchy for motivating employees by designing suitable rewards structures for them. It is seen that the lower level employees are absorbed at low salaries; however, their jobs demand high quality of service and intelligence. In such conditions employees can be motivated through base salary increments. Even a small rise in their salaries would act as a high motivator and in this case money can be regarded as one of the lower order needs of the employees. As employees move up the ladder, they are less interested in salary increments and would rather be attracted by recognition, appreciation and promotion of job designation. This would serve to meet their higher order needs of self esteem. On the other hand, employees belonging to the middle level and who are satisfied with the job status as well as their salaries would be motivated easily by a comfortable working environment and culture including friendly colleagues and peers. This would serve his middle order need or the need for love, affection, belongingness, etc. In such cases, employees belonging to the middle level in the organizational hierarchy could be motivated through a certificate of appreciation, or a token or gift which would be linked with his performance (Rosdahl & Kowalski, 2008, p.45). Task 4 4a. Exit procedures In IBM, only continuous poor performance of employees can lead to termination. The company emphasizes on employment security considerably. The dismissal and promotions of employees are designed with the spirit to attain full employment. The company places all its employees, even the blue collar employees on salaries and provides them with the pays and benefits which can be compared with the best union contracts (Mills & Friesen, 1996, p.76). It replaces the seniority in layoffs with the provision of employment security to all the employees. As per the best practice outlined in the RDI material, employee dismissal is considered as the worst possible strategy for reducing or managing surplus labour. IBM’s approach towards managing surplus is completely in accordance to the above. IBM’s Workforce Management Initiative involves re-deployment which caters to moving employees to different parts of the company and to different jobs which the company needs. This way the employees’ jobs are kept secure and the organization can also attain optimum utilization of human resources. Employee downsizing or involuntary reduction of headcounts is considered to be the last option in the organization (Phillips, 2009, p.354). 4b. Selection criteria in the redundancy process The existence of redundancy in organizations does not necessarily mean that redundancy must be eliminated. This is what is done in IBM. It aims to synchronise the redundancies within the organization. Redundancy is not handled through elimination. Rather it is handled through re-deployment. The employees are absorbed in other job activities. However, this is done using the same recruitment process as applicable for a new employee. Moreover, it is followed by training the employees on the new skills and expertise. IBM is said to have successfully overhauled career plans for numerous employees who were transitioned from their staff positions to the position of sales resulting from the massive reorganization of the corporation. Since organizational restructuring requires staffs to be re-deployed and retrained, it is recommended that they should not be considered for the formal rounds of selection procedures as applicable for a fresh employee in the organization. Rather, they must be absorbed in other positions as per their contributions and experiences. Since they had served the organization for certain times, there would be no need to test their competence all over again. Rather they could be trained on the new procedures and on the new skills and expertise. Reference American Psychological Association. (1990). Human resource planning: Challenges for industrial/organizational psychologists.. [Online]. Available at: http://psycnet.apa.org/journals/amp/45/2/223/. [Accessed on September 22, 2010]. Bernardin, H. J. (2008). Human Resource Management 4E. Tata McGraw-Hill Education. Bohlander, G. & Snell, S. (2009). Managing Human Resources. Cengage Learning. Catano, V. M. (2009). 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