Remington Consulting Group - Essay Example

Executive Summary A case study of Remington Consulting Group has been conducted. The study has been conducted in several phases; review of relevant literature – textbooks, reports, academic publications, case studies, and white papers; analysis of findings; conclusions and recommendations. Findings have been laid out as human capital management; issues from low labour turnover; organisation, and selection criteria and processes and human resource management. Remington hires employees that are among the best talent available. However, Remington has not been able to leverage on its human capital. Organisational innovativeness and consultant customer orientation are necessary for driving customer service and financial performance. The firm enjoys low turnover indicating that the firm is paying its employees high and making lower profits, and employees are not leaving. The firm has a traditional structure, and each branch has a similar setup. There is inadequate flexibility in the way employees operate, in light of developments in consulting practices. The firm has not kept pace with the use of technology such as the use of customer relationship management systems. Remington has global ambitions, but the firm has not adopted practices such as cultural influences or inculcating customer oriented behaviour among employees. Recommendations have been developed for consideration by the Board of Directors and Director of Human Resources based on deficiencies identified; and strategies to overcome limitations. Recommendations include development of a program for human capital management; accepting higher turnover; embracing innovation in the organisation; adopting strategic human resource selection criteria and processes; and adopting modern HRM practices. This includes restructuring the organisational boundaries for a move towards dynamic responsibilities, and extensive use of innovation. Contents Executive Summary 2 Contents 3 Terms of Reference 4 Procedure 4 Analysis of Findings 4 Human Capital Management 4 Issues from Low Labour Turnover 6 Organisation, Selection Criteria, and Selection Process 8 Human Resource Management 9 Conclusions 10 Recommendations 11 Recommendation 1: Development of program for human capital management 11 Recommendation 2: Accepting higher employee turnover 12 Recommendation 3: Embracing innovation in the organisation, and adopting appropriate selection criteria and processes 12 Recommendation 4: Adopting modern HRM practices 13 References/Bibliography 15 Appendix A 17 Terms of Reference This study is a case study of Remington Consulting Group. This study was assigned as a unit assignment. The study has been laid out in several sections. Sections include executive summary; terms of reference; procedure; findings; conclusions and recommendations; references and appendices. Procedure The study has been conducted in several phases. The first phase was an overview of the case. This was followed by review of relevant literature in the form of textbooks, academic publications, case studies, reports, and white papers. Material from publications was synthesized to analyse the Remington case scenario. This method was considered ideal for the study as it allowed review of a wide range of literature to evaluate the study, and identify good practices. Other methods considered were interviews and surveys. However, the scope of the case was limited to pursue interviews or surveys. Conclusions were drawn based on the analysis, and recommendations were developed. Analysis of Findings Findings from the review of literature have been analyzed. They have been laid down in four parts. These include human capital management; issues from low labour turnover; organisation, and selection criteria and processes and human resource management. Human Capital Management Elements of intellectual capital include human capital, social capital, and organisational capital. The branch of economic theory concerned with the value embodied in a firm’s human resources is known as human capital management. Human capital management has been described as "a strategic approach to people management that focuses on issues that are critical to the organisations success." The most significant link between human resources management and human capital management is definition of the link between the two. Human capital management is concerned with the measurement metrics. However, it is not primarily about measurement but creating and demonstrating value that people and people management can contribute to an organisation. The practice of human capital management begins with the collection of data and continuation with measurements and reporting. Specific applications of human capital management relate to human resources strategy formulation, talent management, learning and development, knowledge management, performance management, and reward management (Baron and Armstrong, 2008). Human capital management practices allow value extraction rather than value creation as a way to maximize value of the firm. Human capital has been considered an organisation’s intangible assets. These include competencies such as skills, experience, potential and capacity. It is widely believed that people with the right profile and capability provide a competitive advantage that cannot be replicated. Changes in practices have led human capital to become an important driver of organisational performance. Drivers include the acceptance that human capital is a key asset driving creation of value; move in human resource function from efficiency to effectiveness, cost to adding value, inputs to outputs, data collection to analysis, and operational performance (Ceridian, 2007). In the case study, Remington has not focussed on the value that can be derived from their human resources. The firm has consultants for specific domains within each branch. However, the use of tools to maximize human capital management has not been optimised. Returns on investment and employee selection and development can be achieved by human capital management strategy. The benefits of human capital management include increased adaptability; enhanced workforce performance; and ability to do more with existing resources. This requires integration of actionable, objective, and relevant information about employee skills and capabilities. Information should be put to work on multiple fronts; organisational design; workforce planning and recruitment; employee development; and performance management (Brainbench, 2003). Issues from Low Labour Turnover Theories of labour turnover have been described in table 1. Table 1. Labour Turnover (Morrell et al., 2001) Theory Description Labour market school Labour market exists when buyers and sellers of labour agree on a wage at which they are willing to exchange services. Complications arise as each party needs to be aware of each other’s circumstances, and perfect knowledge does not exist. Search theory Search theory is based on individuals with imperfect knowledge of labour market variables such as constitution of actors and volume of work available. According to the “multidisciplinary model,” the rate of employment is affected by the relationship between satisfaction and turnover. Opportunity influences turnover. Objective opportunities According to the model of interaction labour turnover is influenced by the interaction between labour market, occupational opportunity, and organisational size. Economic conditions can produce workforces, influencing the different patterns of turnover. Job satisfaction may be influenced by opportunities or influence of economic activity. Turnover is a function of economics. Components such as status and working conditions are converted to monetary equivalents. Labour market scope Assessing the impact of the labour market on employment conditions, the scope of the labour market must be defined within a geographical area, industry sector, or site. This gives rise to occupational labour market allowing modelling of turnover. Turnover is affected by situations such as variation in labour demand, supply, and volume. Psychological Labour turnover analysis involves explanation of individual’s decision to leave. There is a greater concern for individual factors, and despite unitary models assume heterogeneity among employees, they are suitable for the development of policies. March and Simon The principal determinant of labour turnover is job satisfaction. Labour market account of turnover can be incorporated in terms of internal and external opportunities. Perceived desirability and perceived ease are expected utility. Motivation is based on organisational equilibrium describes the balance between organisation and its employees. Price and Mueller The “causal model” has an emphasis on causal factors and outlines causal pathways between antecedents and turnover. Mobley Griffith, Hand and Meglino According to the expanded model, search and quit intentions are precursor to turnover. The model is more comprehensive and draws ideas from expectancy theory and earlier turnover models. Principal determinants to quit are job satisfaction, expected utility of alternate roles within the organisation, expected utility of alternate roles outside the organisation, and non-work values and roles. Job satisfaction (according to Locke’s theory) arises from self evaluation of job and comparison with personal values. Cusp-Catastrophe model The model offers a complex account of intrinsic properties of turnover. It is based on catastrophe theory of mathematics for describing turnover behaviour. The model enables reflect threshold nature of turnover. Turnover is characterized by abrupt change, state of disequilibrium, and divergent behaviour may occur on opposite sides. Remington has “too low” turnover (see figure 2 Appendix A). Based on the theories described above, labour turnover is influenced by labour market fundamentals of supply and demand, job satisfaction, individual factors, job assessments, tenure, wages and fringe benefits, and perceived opportunities. Remington is negatively affected by low labour turnover. The effect of turnover depends on turnover costs, incumbent suitability, and new hires. Remington’s low turnover indicates employees with favourable job assessments, tenure, and higher wage and fringe benefits. It is possible that the assessment system is not comprehensive enough. The firm seems to be paying high wages and making lower profits per employee. Also, the labour market conditions could be influenced by current macroeconomic conditions with lesser opportunities available externally. Remington can actually improve profits from a slightly higher turnover. Organisation, Selection Criteria, and Selection Process Going beyond an instrumental recruitment strategy, many firms employ managers that represent a symbolic value for the organisation or its clients. Another important consideration is individual self-interest in decision making. Employee customer orientation is positively related to employee customer-oriented behaviour performance. Additionally customer oriented behaviour has an influence on profitability without concomitant increase in costs. In order to profit from recruitment, hiring, and retention of customer-oriented employees, the focus should be on creating a climate supportive of customer-oriented behaviours (Grizzle et al., 2009). Market leaders are characterised by continual efforts to satisfy customer needs. Organisational innovativeness is more important in driving customer service and financial performance. Successful development of customer-oriented attitudes throughout the organisation requires employees to be committed to providing a high level of service. This requires an understanding of drivers of employees to adopt customer-oriented attitudes. Knowledge sharing has an impact on employee customer orientation. The use of IT such as customer relationship management software enables knowledge sharing. Tacit knowledge sharing positively impacts employee customer orientation and increases sharing of explicit knowledge, and also strengthens communication about customers in the organisation (Reychav and Weisberg, 2009). Remington has a bias towards traditional selection criteria and management of employees. Remington is investing in employees by mentoring employees, after hiring the best talent available. However, the firm has been lacking in the use of IT or customer oriented behaviours. Human Resource Management Boxall and Purcell (2007) have developed a conceptual framework allowing exploration of strategic human resource management within Remington. Employees in Remington are mentored and motivated to perform to their optimum level. There is a proactive and strategic career development program. Individuals are encouraged to set targets within the group’s targets and strategies. However, employees are bound to their mentors, and limited to the group’s targets and strategies which are confined to business units at each location. Globally, there has been an increasing emphasis on social structures for determination of factors influencing career. Changes in the nature of work have resulted in transition in the shape of careers and their management in organisations. Traditional careers have seen a shift towards boundaryless and protean careers. The focus has also seen a shift from organisation to individual focus. Major issues faced by Remington in the management of careers include strategic management of human capital; management of global careers; and diversity (Baruch, 2006). Protean career attitude has been considered an important determinant of success. Development of career insight mediates the protean attitude. In career orientation, the person is in charge, and the person’s core values drive career decisions and success. Remington should create situations where people pursue their “path with a heart,” and intensity of a calling (Hall, 2004). Conclusions Remington has employees that are among the best talent available. However, the firm has not leveraged on its human capital by developing appropriate programs. Human capital management at Remington has been ineffective. The firm enjoys low turnover indicating that employees have favourable assessments, enjoy high wage and fringe benefits, and tenure. However, it also indicates that the firm is paying its employees high and making lower profits. It is also possible that the assessment methods are not comprehensive or there are inadequate opportunities available based on current economic conditions. The firm has a traditional structure, and each branch has a similar setup. There is not much information available about the selection criteria, though the firm selects the best individuals available. There is lack of adequate flexibility in the way employees operate, especially in light of developments in consulting practices. The firm has not kept pace with the use of technology such as the use of customer relationship management systems. Remington has global growth ambitions, but the firms human resource practices has not adopted practices such as cultural influences or inculcating customer oriented behaviour among employees. Recommendations Recommendations have been developed based on deficiencies identified, and strategies to overcome limitations based on good practices. Recommendations include development of a program for human capital management; accepting higher turnover; embracing innovation in the organisation, and adopting appropriate selection criteria and processes; and adopting modern HRM practices. Recommendation 1: Development of program for human capital management This recommendation is for consideration by the Gareth Morgan, Director of Human Resources. Baron and Armstrong (2008) have recommended the use of toolkits to develop and manage human capital within organisations. In order to manage its human capital, Remington should develop a human capital management program (see figure 1 Appendix A). Organisational design requires skills measurement to provide a base of skills requirement and descriptions allowing the development of competency models, and adapt them to match changing job requirements. Skills metrics allow employees opportunities for career advancement by establishing skills milestones. Skills assessment helps identify employees with training needs and measure training effectiveness. Skills can be improved and their progress assessed on a continual basis. Such systems provide important advantages for managing and improving performance in relation to balanced scorecard initiatives and employee evaluation. These systems provide valuable source of metrics for gauging critical skills and drive balanced scorecard metrics. Employee evaluation can be determined by several factors. The scores provide a valuable source of data for supporting the process, and include details for tracking improvements, and validating acquisition of new skills (Brainbench, 2003). Recommendation 2: Accepting higher employee turnover The recommendation is for consideration by the Board of Directors, with David Remington as the Chairman. Remington can be accused of playing too safely with favourable assessments, more tenured employees, and wage and fringe benefits out of context with the economic realities. Investments in human resources can yield positive performance-related outcomes. According to the theory of organizational equilibrium, organizational inducements such as competitive pay will lead to labour productivity, besides improving customer satisfaction (Subramony et al., 2008). A new assessment system is desirable in line with the human capital management program. The assessment should be upgraded in line with best practices, and wages and fringe benefits should be re-structured in line with current economic conditions. Remington can increase profits by an increase in turnover rates to “about right” (see figure 2 Appendix A), as incoming workers could be better educated, more skilled, and have greater initiative and enthusiasm than existing ones. Recommendation 3: Embracing innovation in the organisation, and adopting appropriate selection criteria and processes This recommendation is in two parts; organisational culture and use of appropriate selection criteria and processes. The first part of the recommendation is for consultants. Organisational culture reflects attitudes of consultants are Remington. Change management can be brought by resolution for change by consultants. Consultants must embrace organisational innovativeness to drive customer service and financial performance. Consultant customer orientation is required for improving consultant customer-oriented behaviour performance. Consultants should practice tacit knowledge sharing, and use IT to transform it into explicit knowledge for augmenting consultants’ customer-oriented attitude. The second part of the recommendation is for consideration by Gareth Morgan, Director of Human Resources. Personnel decision making involves the use of measures including person-organisation fit. Person-organisation fit is strongly related to satisfaction. Personality assessment plays an important role in personnel selection. This based on the belief that personality can predict job performance. Widely used techniques include the five factor model of personality and narrow personality measures. The five factor model is based on dimensions including openness to experience; extraversion; conscientiousness; neuroticism; and agreeableness (Acton, 2006). Use of assessment includes external screening, internal promotion, and certification. Psychosocial assessment for the occupational context is the relation between human characteristics and success. Psychological bases have been developed around personality research and psychometric methods. These include multimodal behaviour and performance relationships; trait stability; and person-organisation fit. Instruments for personnel selection include tests; work sample tests; biographical information; interviews; and multiple procedures (Schuler, 2004). Predictors used for personnel selection include cognitive ability tests; physical ability tests; biographical information; job simulations and work samples; assessment centers; interviews; integrity tests; and drug testing (Ones and Viswesvaran, 2004). Recommendation 4: Adopting modern HRM practices The recommendation is for consideration of the Gareth Morgan, Director of Human Resources. As the nature of careers is changing rapidly, human resource function has become more challenging than ever. Organisational design and structures has been influenced by environmental pressures such as globalisation, rapid technological change, and changes in the workforce. There has been an increased reliance on teams, changes in employment contracts, new ways of assigning work, leaner companies, and flattening of organisations. This has decreased the opportunity for traditional career advancement and moving through positions that are clearly defined for progression. Future careers would require continuous learning, not remaining in a job or an area or speciality for a long time. Remington should shift towards being boundaryless with dynamic shapes and structures. These include organisational membership, job duty roles, and ambiguous departmental identity leading to principles of careers that are “boundaryless.” Concepts such as resilience, protean, anchors, ownership, responsibility and proactive personality have to be embraced by the Remington culture (Weinert, 2004). Human capital management links human resources with business strategy. Human resources management practices demand strategic management of human resources. This involves making decisions about best fit or best practice with a strategic resource-based view of Remington, and requires developing systems for working to match the changing priorities of the Remington to be a global player in consulting (Boxall and Purcell, 2007). Strategic recruitment includes rethinking jobs and introducing talent; employer branding; promoting values; and recruiting experienced people. The recruitment and selection process involves getting the right “fit,” and delivering the “promise.” Motivation and retention includes motivating employees to get the best from them and inculcating loyalty. Strategies for retention include helping employees become aware of their limitations; managing employer expectations about keeping people; paying retention bonuses; giving employees an opportunity for variety; considering people to update their qualifications; not threatening employees security; and motivating employees want to take initiatives to further Remington’s goals (Holbeche, 2008). Human resource management should be structured to support business strategies of Remington. Cost minimisers; contingent motivators; competitive motivators; resource makers; and commitment maximizers are bundles of human resource practices. These are distinguished by organisational values and structure. Human resource choices are related to the context of operations at Remington (Toh et al, 2008). References/Bibliography Acton, S. (2006). Five Factor Model. Available: http://www.personalityresearch.org/bigfive.html. Last accessed 08 March 2010. Baron, A. and Armstrong, M. (2008). Human Capital Management: Achieving Added Value Through People. Kogan Page Ltd:UK, 240. Baruch, Y. (2006). Career development in organizations and beyond: Balancing traditional and contemporary viewpoints. Human Resource Management Review. 16(2), 125-138. Brainbench. (2003). Strategy: Human Capital Management. Available: http://www.brainbench.com/pdf/STG_HumCapMgnt.pdf. Last accessed 08 March 2010. Boxall, P. and Purcell, J. (2007). Strategy and Human Resource Management (Management, Work and Organisations) (2nd Ed.). Palgrave Macmillan:UK, 400. Ceridian. (2007). Human Capital White Paper. Available: http://www.ceridian.co.uk/hr/downloads/HumanCapitalWhitePaper_2007_01_26.pdf. Last accessed 08 March 2010. Garino, G. & Martin, C. (2007). The Impact of Labour Turnover: Theory and Evidence from UK Micro-Data. University of Leicester: Department of Economics. Working Paper 05/10, 1-31. Grizzle, J., Zablah, A., Brown, T., Mowen, J. & Lee, J. (2009). Employee Customer Orientation in Context: How the Environment Moderates the Influence of Customer Orientation on Performance Outcomes. Journal of Applied Psychology. 94, (5), 1227-1242. Hall, D. (2004). The protean career: A quarter-century journey. Journal of Vocational Behavior. 65(1), 1-13. Holbeche, L. (2008). Aligning Human Resources and Business Strategy (2nd Ed.). Butterworth Heinemann:UK, 496. Morrell, K., Loan-Clarke, J. and Wilkinson, A. (2001). Unweaving Leaving: The Use of Models in the Management of Employee Turnover. Loughborough University Research Series Paper: 1, 1-65. Ones, D. & Viswesvaran, C. (2004). Personnel Selection. Encyclopedia of Applied Psychology. 35-43. Reychav, I. & Weisberg, J. (2009). Going beyond technology: Knowledge sharing as a tool for enhancing customer-oriented attitudes. International Journal of Information Management. 29(5), 353-361. Schuler, H. (2004). Personnel Selection, Psychology of. International Encyclopedia of the Social & Behavioral Sciences. 11343-11348. Subramony, M., Krause, N., Norton, J. & Burns, G. (2008). The Relationship Between Human Resource Investments and Organizational Performance: A Firm-Level Examination of Equilibrium Theory. Journal of Applied Psychology. 93(4), 778-788. Toh, S., Morgeson, F. & Campion, M. (2008). Human Resource Configurations: Investigating Fit With the Organizational Context. Journal of Applied Psychology. 93(4), 864-882. Weinert, A. (2004). Career Development, Psychology of. International Encyclopedia of the Social & Behavioral Sciences. 1471-1476. Appendix A Figure 1. Human Capital Management Matrix (Ceridian, 2007) Figure 2. Employee Turnover (Garino and Martin, 2007) Read More