Human Resource Management of MAPS Company - Case Study Example

Human Resource Management – MAPS Ltd Introduction In order to achieve the completion of an integrated image of the company’s Human Resource strategy,we have to examine its particular department and evaluate separately the strengths and the weaknesses as they can be observed in practice. Furthermore, we should proceed to the analysis of each specific issue aiming to the presentation of an effective solution. The above analysis should be combined with the provision of the relevant data which can help towards the formulation of a realistic aspect regarding the company’s current situation on the human resources management area. Current Human Resource strategy of MAPS Ltd The examination of the current issues related with the MAPS Ltd human resources management, has to begin by the presentation and the analysis of the structure and the tasks of each particular department. When observing the company as an entity, we can distinguish four particular Divisions which have been created under the pressure of the existence of particular projects and the need for an increase to the corporate profits. The first division is the Operations one which concludes 950 staff. This specific division has been characterized as the most important one regarding the existence and the operation of the company. The basic characteristic of this division is that it is consisted of ‘autonomous’ teams each of which has its own project manager. In this context, each time that a project is submitted to the specific division, the Divisional General Manager has the responsibility to appoint the specific project to a project manager (who will use his team in order to complete the project). The operation and the structure of this division seem to suffer from a significant number of problems, which could be summarized as follows: a) there is no cooperation – or at least to an effective level – between the people working in each particular team. This can result to the insufficient handling of tasks especially when there is a need of specific knowledge (i.e. in cases where the knowledge required belongs to a member of the staff working for another team inside the division). The lack of cooperation between the members of the different teams can have a very severe influence to the performance of the company (see also Lajara, Lillo and Sempere, 2002, who state that the lack of cooperation between the employees can destroy even an international joint venture), b) the teams seem to suffer also from lack of diversity as this assumption can be extracted from the limited participation of women and foreigners in the teams. The lack of diversity inside the specific division can lead to severe problems in the relations between the staff and the decisions which have to be made in each project. Furthermore, the lack of diversity can cause problems to the company’s image towards the public and the general market. The differentiation of the corporate culture regarding the specific issue is being considered – for the above mentioned reasons – as absolutely necessary and the adoption of specific and effective measures towards this direction should be prioritized in the company’s strategic plan c) the lack of cooperation between the staff participating in each team is also creating a ‘hostile’ environment for positive performance and cultivates the competition between the employees. The last phenomenon could be also considered as a positive aspect, however in the particular case it seems that the competition do not lead to a significant increase to the company’s performance (which remain stable with negative perspectives) but just to the delay of the completion of projects (or to their incomplete presentation) due to the existence of turbulences in the internal area. This problem leads also to the absence of specific training for the new employees who are enforced to learn the work directly in practice – whatever such a situation may cause to the company’s image towards the third parties. The structure and the operation of the specific department seem to be totally in adverse with the corporate aims which are being represented mostly by the principle of the ‘customer-focused’ behaviour. The second division of the company is the Support Services. The specific department does not seem to face severe problems regarding the co-operation of the employees or their performance in the tasks delegated to their division. However, there is the problem of delays regarding the completion of a task and this practice seems to occur in most cases. As it has been proved from the relevant research, the most important factor for the creation and the development of this situation is the lack of flexibility regarding the procedures and the persons involved in each task. The requirements for a rather high volume of paperwork when dealing with each task lead – under the above context – to the delay of the delivery of the project with all the consequences that such an action can have to the corporate profile. The existence of the above described problem could be lead to severe problems for the corporate performance in case that the company will not take specific measures for its resolution. The most significant part of the corporate activity that could be ‘damaged’ from such a behaviour is the relation with the customers to the extent that the latter are involved to the activities of the specific division – both directly or indirectly. The department that follows is that of the Information Technology Services. This department has a very successful performance. Its employees co-operate very well with each other but also with the clients. They also try to keep informed for the new IT applications and are enforced to continue their personal development through an intensive training. To an overall aspect, the structure and the operation of the specific department seem to be more close to the corporate aims and more specifically to the strategic plan for a ‘customer-focused’ corporate behaviour. The fourth division of the company is that of marketing and sales which includes 23 employees which is a rather limited number when considering the importance of this department for the company’s positive performance. Moreover, it seems that the training and the working experience of the staff belonging to the specific department are – in a way - limited. This assumption can be extracted by the fact that any new contract or amendment has to be examined and agreed with one of the managers of the division as the staff. In terms of corporate performance, such a situation can create severe problems to the presentation of the company to the public and to its performance in its industrial field. The staff of this department – as of every division in the company – should be trained in accordance with the company’s aims, the general strategic planning of the institution and the external conditions that is the behaviour of the other companies but also of the public in the particular industry. From a general point of view, it seems that the employees need to be trained both regarding the commercial activity of the specific business as of the behaviour towards the customers. In this context their performance could lead to the increase of the company’s financial performance as a corporate entity. This performance however, could be evaluated only at the level of each division and not to the personal level of each employee. Moreover, as it has been proved ‘few organizations can evaluate their performance accurately by averaging the performance of their employees; In most cases, the performance of an organization is determined by the productivity and efficiency of such higher-level organizational entities as departments, retail outlets, plants, or teams’. As it is stated, ‘in the language of operations research, these productive entities are called "decision-making units" (DMUs)’ (Gelade et al., 2003, 383). In this way, it is proved that the influence of the employees to the company’s performance although indirect, is however of significant importance. It should be noticed however, that in case that a re-structuring of the whole business will be evaluated as necessary the relevant procedure has to take place after the evaluation of the existed personnel and the examination of their potential co-operation to the success of the specific initiative. As Mathews (1998, 175) accepts ‘before diversity strategies are implemented, the organizations cultural environment, management and evaluation systems should be examined to ascertain if existing personnel/human resources processes will support or hinder diversity in the organization; Then, appropriate strategies can be designed to develop and manage diversity based on these findings’. Another point that should be highlighted is that the company before proceed to any changes to its internal environment it should examine carefully and measure the performance of its staff in accordance with the aims set by the strategic management team. The role and the competencies of the management team – and mainly that of the HR – are being considered as very important. As Jamrog (2004, 60) states ‘HR professionals need competencies that fall within a three-domain framework: 1) knowledge of business (which includes financial, strategic, and technological capability), 2) knowledge of HR practices (which includes staffing, development appraisal, rewards, organizational planning, and communication) and 3) management of change (creating meaning, problem-solving, innovation and transformation, relationship influence, and role influence)’ Presentation and analysis of proposed recommendations regarding the existing human resource strategy of MAPS Ltd / training and development of staff As Brown et al. (1997) states ‘organizations can buy skills through hiring, or they can develop skills through training and development (T&D) activities’. In this context he tried to examine the criteria in accordance to which a company decides which T&D activity is going to follow. It has been stated that ‘just as T&D content areas are varied, so too are methods for T&D delivery; Choice of T&D delivery methods depends on the organizational culture and values, T&D objectives and content, the profiles of trainees and trainers, financial and technological resource availability, time, location, and political constraints’. Furthemore, Brown et al. (1997) refer to the study of Carnevale (1990) according to which ‘organizations are relying quite heavily on in-house T&D services; Sixty-nine percent of T&D is designed and delivered in-house, compared to 31% purchased from outside vendors’. It is also noticed that an important development to the delivery of T&D methods ‘involves attempts to increase the efficiency and cost-effectiveness of off-the-job T&D’. To a next level, another point for review is ‘the increased exploitation of technology-aided learning - especially information and telecommunications technologies’. Another development in the area of training delivery is the ‘increased emphasis on teams; This emphasis takes a variety of forms, including training intact work teams to maximize relevance to job conditions, delegating decision making authority to the team to determine perceptions of its T&D requirements, including the team in T&D design and, most importantly, using the team or selected team members as deliverers of the T&D content’ (Brown et al., 1997, 27-28) When designing the human resource strategy, one of the issues that usually appear is the existence of skills appropriate to secure the achievement of the company’s targets. Of course, the above skills do not have to exist from the beginning of the co-operation (referring to the business-employee relation) but can be acquired and developed throughout the work in a specific company. Moreover, it has to be ensured that the specific HR strategy is in accordance with the business culture, its structure and its aims for the future. Ramlall (2003) states that ‘Given that several large-scale studies have proven that HRM is a critical driver in an organizations financial performance, it is imperative for HR and other leaders to understand the critical nature and utmost importance of understanding the effectiveness of all HR activities in creating value for the organization. It is also stated that ‘it is only through performance measuring that one can really articulate the benefits of HR strategies in achieving the organizations business strategy and in the process enhance the credibility of the HR profession’ (Ramlall, 2003, 60). Under these terms, it has been accepted that ‘the most effective HR departments are those that add value by playing a business partner role’. The results of the study of Lawler et al. (2003) ‘show the greatest benefits occur when HR is a strategic business partner that fully participates in both the development and implementation of strategy’. It is also noticed that ‘the knowledge economy, with the proliferation of companies that rely on knowledge-based competitive strategies, offers an opportunity for HR departments to alter their role in the corporation fundamentally and become true value-adding strategic partners’ (Lawler et al., 2003, 24) In this context, human resource management is very closely connected with the business strategy in general. Eldson et al. (1999, 41) try to explore the ‘connections between employee alignment with fulfilling work, employee satisfaction, employee retention and business performance’. His study was based on data ‘characterizing business unit financial performance; human resource demographics, resources committed and transfers and promotions; Career Services activity; employee satisfaction; terminations and retention; and links among these elements’. It should be mentioned here that ‘the data covers the years 1995-1997, with primary emphasis on a 13-month period from September 1996-September 1997. During the 13-month period studied, 91% of the one-on-one counseling provided by Career Services occurred in a face-to-face setting, and 9% took place by telephone; The analysis addressed six separate units in Sun that, at the time of data collection, accounted for about 90% of Suns workforce - which averaged 18,000 people worldwide and 12,000 people in the U.S.’ In order to achieve a complete and accurate evaluation of the human resource management regarding the specific company we should primarily examine the general environment to which the relevant strategy refers as well as the people participated in its application in practice. Furthermore, Wright (1998) examined the issue of ‘fit’ regarding the adaptation of HR strategies to the existed business practices and targets. He found that ‘the basic theory behind "fit" is that the effectiveness of any HR practice or set of practices for impacting firm performance depends upon the firms strategy (or conversely, the effectiveness of any strategy depends upon having the right HR practices)’ (Wright, 1998, 56) One of the most important issues for any business strategy is the acquisition of competitive advantage. However, in order for such an effort to be achieved in practice there should be a thorough examination of the general business orientation combining with the staff competencies to the extent that these two elements can be connected. In this context it has been proved that ‘for those organizations seeking a competitive advantage through innovative human resource activity, strategic skills analysis (SSA) represents a means to link business strategy with human resource strategy’ (Summers et al., 1997, 18) It seems that Human Resource Management is constantly developed. As Ulrich (2000) notices ‘HR professionals have found innovative ways to develop current employees, including: new and stretch job assignments, membership on project teams, action learning in training experiences, leaders running training programs, 360[degrees] feedback, coaching, Web-based best practice and learning mechanisms, and Web-based skill building’ (Ulrich, 2000, 18) As Kesler (1997) stated the "tools of the trade" - as used by the HR organizations - can usually be summarized as: a. strategic staffing and selection b. learning and education, c. performance management, d. rewards and recognition, e. organization design and f. communications’; It is also mentioned the example of Chemco which had defined’ the HR tools in more of a process orientation; HR practices are designed into the business model in terms of three processes, co-owned by line managers and HR managers: a. aligning organization, b. developing capabilities , c. managing performance’ (Kesler et al., 1997, 30) The efforts of the human resource management should be focused to the following directions: ‘a) to enable employees to seek greater fulfillment in their work through person-to-person career counseling creates significant value for the organization through enhanced retention. In the example studied, return on investment was estimated at well over 100%, b) a person-to-person career counseling should be offered to the extension that such an activity creates greater workforce flexibility by enabling employees to respond rapidly to a changing environment and customer needs; The above inititiative should also provide an effective means to broadly address the needs of different segments of the employee population - for example, addressing the needs of minority groups, which are of increasing importance with the growing diversity of the workforce, c) the provision of support to the employees regarding their career development, to the level that such a support could address the different segments of the employee population and track them with appropriate metrics; Segments include those based on ethnicity, gender, years of service, age, position and function. Additional metrics to track include outcomes such as transfers, promotions and attrition, employee satisfaction and qualitative measures of the impact of services on an individual, e) Particular emphasis is also required to support the retention needs of employees with five or fewer years of service - a vulnerable group. This may include, for example, provision of orientation and development support and internal networking opportunities’ (Elsdon et al., 1999, 41, 45). Other potential measures that could be taken from the HR department could be the following: a) ‘Move with speed and agility’. In order to achieve this target we should ‘remove bureaucratic processes, gain clarity of governance to make rapid decisions, build discipline into how to make change happen, and identify and remove management virus or old ways of doing things that get in the way of speed’, b) ‘Create firm brand and equity’. We could achieve this target by ‘encouraging dialogue and ensuring clarity among the management team on "what we want to be known for by our best customers in the future’, c) ‘Ensure customer interface’. We could help ‘ensure positive customer interfaces both by building customer interface criteria into HR practices (e.g., who is hired, how people are paid, what training is done) and by involving targeted customers in HR practices’. d) ‘Ensure superior talent’. The talent war may be ‘dissected into two elements: competence and commitment’ (Ulrich, 1998). ‘Competence means that firms need to identify and hire employees who have skills for the new game; not the old one’. Towards this direction, the HR department ‘needs to help managers identify the types of employees required for the future, both in terms of technical and social competence’. They then ‘need to identity where these potential employees currently reside and create a value proposition for the employees that makes the firm an attractive place to work’, e) ‘Leverage innovation and learning’. More specifically the HR managers could help ‘build innovation and learning capabilities; We should ‘ensure that employees with new ideas are not punished, but are encouraged’. f) ‘Form alliances’. In this direction, HR management team may ‘help build connectedness’, g) ‘Assign accountability’. Accountability ‘ensures that people have competencies, authority, and responsibility for getting things done; when everyone is responsible for something, often the best idea wins’ (Ulrich, 2000, 17-18) To the above mentioned we should notice that the introduction and the development of any HR management methods has to be examined in advance for its cost especially when the people involved are going to be too many. In this direction it has been stated that ‘in large organizations, where decision making is partially decentralized, local HRM decisions are often strongly influenced by considerations of their associated operating costs’ In this context, the cross-sectional relationships demonstrated in the study of Gelade et al. (2003) ‘provide empirical evidence that HRM decisions, climate, and DMU performance are connected, but more research--especially longitudinal research--is required to establish the extent of causality in this domai’n (Gelade et al., 2003, 393). However, Walker stated that ‘costs of human resource processes and initiatives (investment of money, time, and other resources) are best measured in relation to their outcomes; Absolute costs or changes in costs mean less than the productivity of the activity, the value or a result achieved relative to cost, or the business benefit relative to the investment’ Moreover, it has been found that ‘unusually high recruiting and training costs may be justified by the resulting business results achieved; However, such recruiting and training costs should also be evaluated in terms of productivity measures and results achieved’. It is also stated that ‘the business linkage approach to relevant measures is more difficult, especially when the intended results and business impact are not clear’ (Walker, 1998, 9) Generally, it should be noticed that the work of HR management in a business environment cannot be considered as an simple one. It seems that the evaluation and the application of specific measures is only the result of a long term effort in order to identify and locate the business needs. According to Conner (1996) ‘to improve its effectiveness and have greater impact, the human resource function must understand how to add value in the organization by helping line managers align HR strategies, processes, and practices with business needs; This will require HR professionals to perform increasingly complex and at times paradoxical roles; (Conner et al., 1996, 38) References Brannick, M.T., Levine, E. 2003. . Job Analysis: Methods, Research, and Applications for Human Resource Management in the New Millennium. Personnel Psychology, 56(3): 800-802 Conner, J., Ulrich, D. 1996. Human Resource Roles: Creating Value, Not Rhetoric. Human Resource Planning, 19(3):38-46 Gelade, G.A., Ivery, M. 2003. The Impact of Human Resource Management and Work Climate on Organizational Performance. 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