Understanding & Managing Organisations - Essay Example

?Understanding and Managing Organisations Introduction As corporations respond to the changes and challenges demanded by the global business environment, it has strong implications in the manner in which human resource management (HRM) is conducted (Lawler & Mohrman 2003). These changes influenced by rapid developments in information and computer technology, establishment of transnational corporations, globalisation and other similar factors, have contributed to the notion that human capital is critical for the success of modern organisations (Marrewijk & Timmers 2003). As such, human resource (HR) has to find means wherein the management of people becomes the foundation for the success of the organisation (Boxall & Purcell 2003). In this regard, this study will look into HRM, its meaning and functions and on how strategic HRM becomes an essential development in the field. From this perspective, the study will focus on five aspects of HRM, namely, resourcing, employee engagement, job design, employee development and leadership. This is undertaken with the purpose of gaining more insight and better understanding of HRM. The paper will be having the following structure. The first section will deal with the nature of HRM. This will provide the framework in which the five related functions of HRM are appreciated. The second part will deal with some questions pertinent to the five aspects of HRM, which is the focus of the study. This is essential as it affords a way wherein some concerns relevant to these five functions may be clarified. Finally, the third part will be the conclusion. In the end, it is the aim of the writer to be able to produce a clearer vision of the relationship between organisational behaviour and HRM. HRM: Its Nature and Definition Before, HRM has been concerned with administrative functions in people management. However, with developments in technology, HRM administrative functions are no longer its main concern, but it is now focused on coming up with strategies that position the right staff in the right job at the appropriate time and carrying out task effectively (Lawler & Morhman 2003). As such, human resource management is “strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of its objectives” (Armstrong 2006, p 2). Observable in the definition is the notion that people are considered to be as the “most valued assets of the organisation”, this position breaks from the traditional perception that employees are deemed as costs rather than assets. This is a significant condition because there are some who are claiming that there is a difference between HRM and human capital management (HCM) and that the main difference between the two is the actual practise (Armstrong 2006). It is contended that HRM also sees personnel as assets, however, since they have several concerns, only a few of HR people admits in implementing the philosophy and belief system underlying HCM (Armstrong 2006). On the other HCM uses measurable data to come up with policies, strategies and programmes that will help the management develop the right training, learning and opportunities that will further improve the employees. Nonetheless, although the discourse regarding the difference between HRM and HCM is continuing, what is necessary is that HRM and HCM may be combined in order to with better HR policies, strategies and programmes that best suit the needs and goals of both employees and the organisation. With people as valuable assets as its ethos, HR works within a system wherein there is a clear HR philosophy that serves as a guide to managing people. It also has to have clear HR strategies that will lead HRM to its goals and vision. Likewise, it has to have HR policies that will set as the standard in addressing HR concerns while HR procedures are necessary concrete methods or processes adopted by the organisation as it implements HR policies. At the same time, there are HR practises that are informally adopted by HR as they deal with some issues encountered and finally there are HR programmes, which become the venue for the implementation of HR strategies, policies and practises (Armstrong 2006, p 4). All of these factors combine to creating HR system that is an integral in the operations of HR in particular and of the company in general. There are other models for HR system (e.g. Fombrun et al 1994; Harvard Framework –Beer et al 1984), and as such what is necessary is to be able to choose the right ‘fit’ for the organisation so that it can come up with a HR system that is not removed from the context, condition and reality of the organisation. Fig.1 Source: Researcher This figure shows that there is an underlying philosophy supporting HRM. The ethos serves as the driver that guides the policies, programmes, practises and procedures that HR creates in order to achieve its goal. Moreover, since HR activities are geared towards the achievement of goals, it is strategic and purposive. As such, HRM becomes an integral bridge connecting employees and management and an indispensable tool in establishing the platform that will assist in the realisation of the goals of both the company and the employees. HRM and Some Concerns Regarding Its Functions Some of the major functions of HRM involve the hiring of the prospective employee, training of employees and the continued learning and development programmes that cater towards the achievement of the organization’s goals and self-growth of the employees. From these functions, it can be inferred that HRM is the first section of the organisation that deals with potential future employees. As such, they have to come up with plans and strategies that will attract the best applicant for the job. This is important because if people are deemed as valuable for the success of the organisation, the best applicant for the job should be selected (Cook & Ferris 1986). This notion is true regardless of the size of the organisation. In fact, large companies and TNCs have used virtual reality as part of their recruitment platforms (Kovach et al. 2002). This is done to reach as many applicants as possible so that they will have the opportunity to select the best among the numerous applicants. While, small and medium enterprises (SMEs) uphold the position that one their advantages over large companies and MNCs is their employees (Harney & Dundon 2006). However, in a study conducted by Harney and Dundon (2006), they have found out that the recruitment of SMEs is usually performed informally via word of mouth or through recommendations of friends. They have also found out that this is the practice of recruitment persists because it is cost effective and reliable (Harney & Dundon 2006). In this context, can it be maintained that knowledge of HRM can help SMEs in recruiting and selecting the best possible employee? Considering that SMEs and HRM views employees as valuable for the success of the company, it can be inferred that knowledge of HRM is advantageous because it can help in planning actual selection of the best possible candidate for the job (Chandan 2011). Through knowledge of HRM, SMEs can create the necessary questionnaires that may assess the knowledge of the candidate regarding the employment. Likewise, it can assist in the formulation of the necessary questions for the interview that may be of assistance in knowing the capacity of the candidate vis- a-vis the job opening (Chandan 2011). These are essential because, in the selection process, the primary focus is to get the best applicant for the job. As such, sometimes, intuition and word of mouth are not enough to attract the best possible candidate. Thus, knowledge of HRM is an advantage in attracting and selecting the best possible candidate for the job. HRM’s responsibility does not stop in the selection of potential candidates. In fact, it is just the beginning. After the candidate is selected, the next step that ought to be performed is the induction and socialisation of new employee/s. One serious concern related to induction and socialisation is the uncertainty whether it helps in the long-term engagement of the employee? Induction is the introduction of new employees with the existing culture and practises of the organisation. It helps new employees to settle in their new jobs, meet co-workers, and become familiar with the environment, people, the organization and other significant elements of the organisation (Hodgetts 2002). Moreover, induction helps in reducing the anxiety of new employees. It assists in the integration of the employees within the firm. It facilitates the introduction to the various departments of the company. It is an appropriate time for ne employees to learn and understand the standards and expectations of the firm, while at the same time, informing them of policies, procedure and practises that are crucial for them to know. Finally, induction is the orientation of new employees to the firm and as such, it is the opportunity, for newly hired employees, to air out any questions that they may have regarding the firm. In other words, induction is the opportunity to get to know not only the organisation, but also people in the organisation. If this is done properly and not in haste, it helps in creating a good impression as it enhances employee retention and assists in easier adaptation for the new employees (Hodgetts 2002). In this regard, induction can be considered as the initial stage of socialisation in the company. This is useful in view of long-term engagement of employees because at the start they are provided with the necessary information that they have to know as they begin their job in the company. This information helps the employees in knowing the environment and people of the organisation and as such create the necessary knowledge that will assist in the establishing social relations with others in the company. Socialisation is vital for the engagement of the employees because according Maslow’s Hierarchy Theory; socialisation is part of the needs that firms have to satisfy in order to obtain job satisfaction (Maslow 1954). In this regard, if in the induction the employees see that there are venues for socialisation with other workers, it becomes a form of inspiration or motivation for the employee (Maslow 1954). For instance, in P&G, induction of new employees is performed in two stages – the work –unit induction and the organisational induction. In the work-unit induction, the new employee is introduced to the unit where he/she will be placed. During this stage, the goals of the unit are presented, the employees functions and on how he/she can contribute to the goal, and he/she is introduced to other employees of the unit. On the other hand, the organisational induction is the orientation of the employees regarding the policies, programmes, practises, codes and other salient details and information that are necessary for the new employee to know (www.png.com). One more central focus of HRM is job design. Job design is defined as “the specification of the contents, methods, and relationships of jobs in order to satisfy technological and organizational requirements as well as the social and personal requirements of the job holder” (Davis 1976 as cited in Armstrong 2006, p 330). The aim of job design is first, it is designed to meet the vision and goals of the organisation and second it is intended to help individuals attain self-growth and development. In this regard, decisive factors that ought to be considered in job design are ? organizational design this includes the purpose of the organization or the organizational unit, the particular demands that achieving that purpose makes on the people involved, the structure of the organization, the processes and activities carried out in the organization, the technology of the organization, the changes that are taking place in that technology and the environment in which the organization operates the process of intrinsic motivation; the characteristics of task structure; the motivating characteristics of jobs; the significance of the job characteristics model; providing intrinsic motivation. Source: Armstrong 2006, p.328 The process of intrinsic motivation pertains to the motivation derived inherent in the fulfilment of the job. For example, is the salary. Although this is external, the employee achieves other goals through it. The characteristic of task structure refers to the number of tasks that may be performed in view of the function. Planning, implementation and monitoring are essential elements in the task structure. Another factor is the motivating characteristics of jobs. This means the job, in itself, is empowering as it provides opportunities for planning, decision- making and action while keeping support, training and guidance in identifying responsibilities. On the other hand, the significance of job characteristics model connotes the experienced meaningfulness of the work, the rewards derived out from meritorious performance and awareness of the responsibilities that are entailed (Robertson et al 1992). Finally, providing intrinsic motivation entails getting the necessary feedback in the performance of the function that will assist in the further development, not only of the work, but also of the employee. The job uses abilities that are valued by the employee and that it allows the employee to practise self-control over the setting of their own goals (Armstrong 2006). As knowledge becomes crucial for the success of the organisation in the age of information, one of the recent tasks of HRM is to develop programmes will contribute to the continued learning, training and development of staff. However, does investing in staff training and development contribute to the strategic capability of the organisation? Indeed, some may see investment in staff training and development as costs, but it should be noted that although there is difficulty in directly quantifying the contribution of staff training and development to strategic capability of the firm, it contributes to it (Valle et al 2000) by (i) Training and development are decisive factors that help employees obtain self-development and self -growth. Maslow’s Hierarchy Theory claims that self-development and self-growth are primary factors that motivate employees (Maslow 1954). Employees that are motivated perform beyond what is expected and as such attain increase in quality of performance and productivity (Lepak et al. 2006). (ii) As people are valuable assets of the company “acknowledgement, development and systematic use of the skills and knowledge of employee (Ramirez et al 2007, p 496) becomes one of the sure way wherein corporate social responsibility of the company is addressed. This helps in the promotion of the company and thus, attracts the best possible candidates for the job (Wood & De Meneses 2008). (iii) Providing training and development venues for employees creates a positive reputation for the company. It appeals to ethical consumers, which, is a new and growing segment of the buying market. Ethical consumers are people who are willing to pay a higher price for services or commodities that supporting consumers’ ideologies such as human rights, labour rights and many more (Memery et al, 2009). (iv) Responding to the needs of employees for training and self-development is a critical factor for social investors. This is important because currently there is a continued increase in the number of investments made by socially responsible investors (MIstra 2009). This means that there are growing number of investors who are no longer just interested in profit, but they are also interested in seeing that their investments are doing for the society. (v) It is one of the reliable way that will help retain the best employees of the company (Evans 1986). For example, P&G continues to provide training to its employees. They have established state of the art training facilities for the continued learning and development of employees. Likewise, they have initiated distance learning for their employees (www.png.com). Meanwhile, the financial standing of PnG is stable considering that the global economic downturn is not yet over. In fact, there is an increase in their net sale for 2010, from $76, 694 billion in 2009 to$ 78, 9 billion in 2010. Even if there are other factors that ,contribute to P&G’s status, their involvement and commitment to the welfare of their employees is part of the sustainability strategies that the company upholds (www.png.com). On the other side, of the spectrum, is the leadership of the organisation. Leadership provides the inspiration that influences the performance of the employees (Boselie, Dietz & Boon 2005). Presently, two of the most important types of leadership are transactional leadership and transformational leader. Under transactional leadership, the leader recognises the needs, aspirations, and dreams of the employees and then the leader will negotiate on how those identified needs and aspirations will be satisfied in exchange for the labour/work provided by the employee (Jing & Avery 2008). By laying down all the necessary information the employees need in discharge of their functions, the leader builds an environment of transparency and reliability that encourages employees to excel. This happens because the employees are informed of the relevant details that will enable them to satisfy and even go beyond the demands of the job in order to gain a reward that is also clearly laid down. In addition, the transactional leader encourages dialogue; however, the final opinion is still the leader (Jing & Avery 2008). It has been observed that, under this kind of leadership, employees are authentically empowered since they perform their job base on the negotiated and expected rewards, benefits and other agreed upon benefits. On the other hand, transformational leadership employees become emotional and intellectually engaged in the company. This means that the leader provides the inspiration and ideal that touches the employees and it becomes a shared ideal between them (Jing & Avery 2008).However, there is a weakness in this kind of leadership, since the trust, commitment and enthusiasm of employee is dependent on the leader, this kind of leadership may run to disappointment or disillusionment if the leader cannot deliver (Jing & Avery2008). However, despite its recognise limitation, transformational leadership, empowers employees. The inputs and ideas of the employees become crucial in the attainment of the vision of the leader. Moreover, the autonomy of the employees are encouraged, thus, in the end both the leader and the employees share the same ideals and vision. The difference between the two is significant. Transactional leadership sees the relationship between management and employees as exchange and this creates no distinction between the relation of worker and capitalists during the industrialisation period wherein the workers sell their capacity to work to the capitalists in exchange for salary. On the other hand, ion transformational leadership, what happens is sharing of vision and ideals that move the employees and the management together. It may be more susceptible to disillusion, but it recognises the humanity of both the management and employees. Moreover, under transactional leadership motivation is simply the reward, whereas in transformational motivation lies on the knowledge that the employee has contributed to the success of the organisation. In this sense, the employees are authentically empowered. Conclusion Fig. 2 Organisational Behaviour and HRM This figure shows what is central in the above discussion – people at the centre of HRM. When coming up with polices, programmes, practises and procedures, the philosophy ‘people at the heart of management and the company’s success’, becomes the beacon that guides and the ethos that drives the development of HRM in particular and of the organisation in general. This is difficult, but it has been proven by P&G and other companies that by placing the concerns and welfare of employees as one of its main concerns, achievement of company goals become easier. References Armstrong, M 2006, A handbook of Human Resource Management Practise (10th Ed), London: Kogan Page. 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