Human Resource Management Vs Personnel Management - Dissertation Example

Human Resource Management Vs Personnel Management Introduction Human resource management is the core function of any organization aspiring to be a leader in the market. A company may have all the resources required to run smoothly but if its personnel is not productive or committed to work then the company is destined to fail. It is therefore important to make sure that employees are satisfied with their jobs and can perform up to the expected standards. This is achieved by hiring a qualified human resource manager to handle all aspects related to workforce to ensure company growth and productivity. Sometimes a company can hire an agency to provide these services but a human resource department is recommended (Analoui, 2007). The functions performed by human resource managers include; recruitment and selection, training, placement, performance assessment, handling compensation issues and benefits, wage administration, policy formulation as well as determining terms of separation among others. The term human resource management is used interchangeably with personnel management prompting the need to evaluate whether there are any differences that exist between the two concepts. The paper will help to understand the role of human resource management in resourcing, reward, development and relations based on a particular organization. Human Resource Management Vs Personnel Management Human resource management is considered as a broader scope of personnel management which deals with operational matters of the organization employees whereas HRM deals with strategic management. Personnel management involves observance of strict rules and procedures as indicated on employee contract without any deviations. When dealing with employees, personnel managers use the contract as a guideline. Any behaviour which is out of the norm is not tolerated. This is disadvantageous because it restricts managers from exploring new ideas or policies useful to the company and employee cannot develop themselves as they follow custom. On the other hand, human resource managers develop new rules to match with business needs. The behaviour of employees is inclined towards achieving company mission or objectives hence they have room for growth. The task of personnel managers is to monitor staff to ensure performance whereas HRM monitor and develop employees to make sure they are satisfied hence avoid labour turnover and ensure business prosperity. Personnel management is geared towards company profitability and hence does not take care of other stakeholders and is bureaucratic in nature making it hard for employees to communicate with management and decisions take long to be made (Bach & Sisson, 2000). When employees are not allowed to communicate freely, they are unsatisfied and can’t air their views hence low productivity and low profit margin. In HRM, employees communicate directly with management as there are no bureaucracies and customer needs are taken care of and decision making is fast. Human resource managers work in coordination with other managers to ensure company goals are met and emphasize on team work rather than individual work although contacts are given individually and job is evaluated on performance. This ensures employees develop their skills in many fields by learning from colleagues and this enhances efficiency. Bach & Sisson (2000) argues that personnel managers emphasize on individual work but contracts are designed through collective bargaining and performance is evaluated by fixed grades. This hinders development of workers skills but enhances competition between workers hence productivity. Personnel management unlike HRM does not offer training courses to employees. This hinders growth and career development and is likely to prevent job satisfaction and enrichment hence low morale and poor performance resulting to and low quality products. Evolution of Human Resource Management PricewaterhouseCoopers Company uses the human resource management approach in dealing with labour force. Managing human resources is crucial in this organization. Acquiring employees, developing their skills, motivating them and maintaining their commitment for efficiency and goal accomplishment is the key role of the human resource manager. Before inception of human resource management, organizations used to have personnel management. Previously, the personnel department used to act individually without engaging other departmental heads but due to competition is was deemed necessary to engage line managers in managing personnel so as to improve business performance and gain competitive advantage. The role of trade unions has also declined partly due to political pressure and need for organizations to have direct relationship with workforce through participation and involvement in decision making process (Beagrie, 2004). The growth of business studies education has also accelerated the growth of human resource management by creating awareness and developing new ideas. The aim of an organization was to ensure employee satisfaction so that they can perform well for company prosperity. This was achieved though motivators such as; bonuses, rewards and work simplification. This has since changed as firms’ realised new ways of motivating employees through team work, job creativity and effective ways of dealing with new challenges as opposed to crisis management (Bach & Sisson, 2000). Union membership which used to be compulsory for all was reversed to include single individuals who acted voluntarily. Human resource manager role has also changed from operations to providing consultancy services to line managers and others who need help. They also practice delegation of responsibilities rather than being bureaucratic. Employee commitment is emphasized hence continuous training and skill development as well as motivation. Task 2: Recruitment and Selection HR Planning Process This involves strategies used to match size and skills of workforce to organization needs. It involves recruitment, selection, managing employees and analysing current and future workforce requirements and training (Reilly, 1996). HR planning process is exercised differently by different organizations according to their policies and strategies. Price water house cooper is an organization that values its employees and customers and aims at producing the best workers who can place an organization at a competitive advantage. The first step of its HR planning process according to PWC (2006) is strategic analysis. This involves determining the future requirements or priorities of human resources and management. This helps management to plan in advance the resources required to fulfil those requirements. Existing HR applications are then evaluated using special HR benchmark report. This is comparison based on HR data bank of global research. The next step is job description of required positions. This makes it easier to determine the qualities needed for potential candidates or whether the positions are worthwhile and in accordance with company objectives. Competencies of staff are then evaluated to determine areas that need improvement. It also determines the need for hiring more staff and career development. The company then begins to search for the right candidates in its databank or advertisement followed by interview and selection. References of candidates are also evaluated before the candidates are offered jobs. PricewaterhouseCoopers uses an assessment centre in determining the best suited candidates. HR planning process differs from the theory of HR planning in some ways. According to Analoui (2007), the planning process begins with designation of a HRM system. It is important to establish systems that can handle the process without any failures. It also ensures that management of human resources corresponds with organizational goals. This is more or less similar to the first step of pricewaterhouseCoopers. The second stage is environmental analysis which is similar to benchmarking by PWC but it is broader. It is essential to consider internal and external factors affecting the organization so as to decide how to adjust accordingly. The external factors include; unemployment rate, skill availability, competition and government policy. Internal factors include; turnover rates, early retirement schemes, agency workers and casuals. Forecasting is an essential step in HR planning process. Reilly (1996) emphasizes the need for forecasting in order to avoid underutilizing or overstretching employees. This can be equated to job description of PWC. The number and type of employees needed in future is determined based on past and present status of the organization. Supply of staff either from inside or outside the firm is evaluated. There may be employees with the required skills or competencies in the firm hence no need to hire from outside. After analysis of demand and supply, and evaluation of all data collected in the process, an action plan is developed by the HR professionals and presented to the management for approval. Employees are also sentized on the important issues of the plan. PricewaterhouseCoopers usually has a databank of potential candidates who are young graduates who have already undergone various tests and interviews and also through assessment centres to determine their competencies. The HR planning is thus made easier and this stage is not necessary. Candidates usually meet with employees, socialize and learn more of the company and the company also gets to know them better hence barriers to success are minimised. PWC recruits staff for other organizations hence needs to plan well. Recruitment and Selection Process Various organizations have varied recruitment processes based on the size and type of business or industry. The strategy used by PWC differs with that of McDonald’s restaurant. PWC begins its recruitment exercise by arranging workshops and job fairs to new university graduates in order to familiarise with them and keep them informed of company trends (Sokun, 2004). Thereafter, they send CV and motivation letter to HR department for consideration. The application states the department one wishes to work in. Candidates are tested on communication skills, creativity, academic record, attitude to team work among others during those workshops. On the other hand according to peopleclick (2010), MacDonald’s receives applications on-line through its career website designed by peopleclick high volume solution. Interested candidates visit the site and fill a questionnaire which is screened by embedded psychometric test to determine its qualifications. Candidates do not meet with managers or other employees face to face like in PWC. If no vacancies are available, applications are kept for future use in both cases. The selection process of PWC involves evaluating applications by management. An English test is administered to students to evaluate their reading and comprehension skills. Successful candidates are referred to assessment centres to evaluate their competencies by demonstrating their skills practically. For McDonalds, the restaurant managers get results of questionnaire and successful candidates visit the restaurant for on-job evaluation and interview. According to peopleclick (2010), McDonalds in collaboration with peopleclick has designed an interview scheduling system (peopleclick interview scheduling) where candidates decide when to go for interview and job offer thereafter if successful. PWC process continues with first group interview and office tour to assess team work skills and discussions with concerned manager. The final interview is then conducted and focuses on resume and issues clarifications between candidate and senior management (Sokun, 2004). The last step is job offer to the successful candidate who is later trained on the job to improve skills and career development. Task 3: Monitoring and Rewarding Staff Measurement of Performance by PWC Employee performance is vital in an organization as it determines the realization of its goals and productivity. It entails setting criteria by which performance is measured. Tyson & York (2000) refer to performance appraisal as a psychological contract between employee and employer. An effective staff assessment should include the following characteristics; a criteria, definition and purpose of the scheme which should be explained to staff during induction interview. An appraisal helps employees to evaluate past performance and make improvements. It is therefore wise to discuss the details of the performance scheme with concerned managers. A 360-degree feedback evaluation of performance is useful in organizations. It helps workers to improve self-awareness, build confidence and improve performance. PricewaterhouseCoopers is one of the organizations that use performance measurements to grade employees. Before the employee starts his/her assignment, agreement on performance and objectives to be achieved are agreed through consultation between worker and manager. This enables employee to have the sense of belonging and commitment to achievement of the goals. There is no element of bureaucracy hence the employee is free to communicate freely with appraiser and clarify any issues which he/she doesn’t understand. Performance is measured against objectives after completion of the assignment. If the objective is achieved, then the worker can be rewarded through bonuses, promotion or any other method. If not achieved, the manager can decide to take disciplinary action or more training can be given to the employee. This approach by PWC enables flexibility and creativity among workers and enhances motivation as employees understand their company’s expectations or direction (Sokun, 2004). Rewarding Employees A good performance by workforce deserves a reward in order to boost their morale and encourage other workers to perform and hence the company gains competitive advantage. For effective rewarding of employees, a proper reward system should be put in place in line with organization strategy (Tyson & York, 2000). Successful job evaluation is essential in offering rewards so as to fair to all employees. Rewards take the form of wages, benefits, compensation, and recognition among others. Managers should observe workers behaviour or culture as it affects how employees view or value rewards; some workers like monetary benefits while others like non-monetary rewards or intangible versus tangible benefits. PricewaterhouseCoopers besides giving normal salary package has other reward systems in place as indicated by Sokun (2004). Jobs are evaluated and performance measured for all workers. The high achievers or performers are given an annual bonus. This may motivate workers to work harder but some people may prefer promotion instead. A bonus after task accomplishment is more appealing than annual bonus. To encourage skill and career development, a qualification bonus is given to those who pass their exams on first attempt. This encourages continuous learning and worker productivity. PWC also offers special allowances to staff in order to boost their morale. These include; allowance for personal events such as; wedding, birth day and such other events. Employees are also entitled to compassionate leave while attending such functions. This is a good gesture by the organization but it may encourage absenteeism. The salary package may affect motivation levels when some workers feel they are unfair as a worker may work hard but the salary is the same unless the work is paid on piece rate thus lowering product quality as workers concentrate on speed. A manager should therefore be very careful when deciding on what to reward to whom to avoid negative effects. Task 4: Employment Exit Procedures Circumstances under Which Employees Leave Organization Employees are entitled to career advancement and proper working conditions. Poor human resource strategies may result to turnover in organization. Employees need to be nurtured if an employer wishes to retain them. There are various reasons that may make a person to quit or be separated from the workforce ranging from personal issues, internal and external factors. An organization like PWC has many branches in different countries. In this case, a person may quit the job to go and work closer home in case of migration. The organization also encourages career development through team work and training and as such, a worker may leave for better prospects as he/she is well equipped. A study conducted by PWC showed that some people lack sense of belonging or feel undervalued especially during this time of recession hence consider quitting. Poor working conditions can also make workers to leave job. Some separations are brought about by legal and economic issues. At a time of recession, it becomes difficult to maintain employees hence declare them redundant and lay off or downsize the organization. Graduates are hired while still learning and as a result, they may leave the job to concentrate on studies (Sokun, 2004). Some are hired on temporary basis hence they leave when period ends. The government declares an age limit where people are not supposed to work or retirement age and when it reaches, concerned persons have to leave the job. Lack of motivation and job dissatisfaction can cause employees to leave. Redundancy Policy This is a policy developed to deal with issues of redundancy. Redundancy occurs when skills of individuals are no longer needed. An organization should ensure the process is painless, humane and fair. It should evaluate alternatives before resulting to redundancy. PWC policy involves identifying skills that are vital to the organization and putting in place right reward structures. Ensuring regular communication with staff regarding current developments ensures their commitment. Ensuring cost effective management if workforce is to be retained. The company finds ways of reducing costs by tight financing, reduction of pension schemes and voluntary salary cuts. If redundancy is inevitable, the management starts planning by involving workers. The faster the decisions made, the lesser the costs and risks therefore management should ensure they take least time possible to make crucial decisions (PWC, 2010). The management should determine which staffs is to be redundant and the ones to retain based on their skills and performance. They should not favour some individuals, fairness and justice is the key to a successful process. Employees should be given room to volunteer for redundancy. There are alternatives to redundancy which include; freezing recruitment, flexible working and reduction of working hours, voluntary pay cut, provision of extra services, redeployment of workforce to understaffed areas, removal of Overtime hours, reduction in usage of agency workers and deferring payments to later date can help to reduce costs. Conclusion Human resource management is an integral part of an organization that involves monitoring and nurturing employees in order to enhance performance and productivity. It has involved over the years due to technological changes and globalization and is heading towards becoming a fully consultancy service. Human resource managers collaborate with line managers to ensure firm objectives are achieved and in gaining competitive advantage. This is done through continuous training and development as well as rewards and motivation. HR planning process is essential in obtaining the right employees although sometimes it is inevitable to part with them due to unavoidable circumstance like redundancy. References Analoui, F. 2007. Strategic Human Resource Management. London: Thomson Learning. Bach, S., Sisson, K. eds. 2000. Personnel Management: A Comprehensive Guide to Theory and Practice. 3rd ed. UK: Blackwell publishers ltd. Beagrie, S. 2004. “Events that Changed Human Resources”. Personnel Today. 2 Nov pp 22- 26. Peopleclick. 2010. “Case Study: McDonalds UK Expands its Golden Arches with Peopleclick High Volume Hiring Solutions”. Peopleclick Inc. 2 April 2010. http://www.Peopleclick.com/clients/mcdonalds.asp PricewaterhouseCoopers. 2006. “HR Planning and Policy”. Turkey: PWC. 10 April 2010. PricewaterhouseCoopers. 2010. “Managing in a Downturn”. 10 April 2010. www.pwc.co.uk/eng/issue/midt-people-what-is-the-issue.html Reilly, P. 1996. “Human Resource Planning: An Introduction Report 312”, Institute for Employment Studies. 2 April 2010. http://www.emp-studies.co.uk/pubs/summary.php?id=312 Sokun, N. 2004. “Human Resource Management of PricewaterhouseCoopers with Special Reference to Cambodia”. ASEAN Business Case Studies no. 3. Tyson, S., York, A. 2000. Essential of HRM. 4th ed. Oxford: Butterworth-Heinemann. Read More