Strategic HR Practices in Context of Organizational Improvement and Employee Well-Being - Coursework Example

Strategic HR Practices in context of Organizational improvement and Employee wellbeing Introduction Globalization is the key word which has brought drastic changes in most of the individual companies and the capital markets for the past two decades. Many firms have expanded exponentially and they have set their business operations overseas. In order to overcome the global competition, the firms are actualizing optimal work environment and are adopting improved organizational processes to improve the productivity of the employees. With employees being the crucial ‘cog’ for the organizations to function, they need to be managed aptly and that is where the role of Human Resource Management (HRM) or strategic HR practices comes into the picture. Thus the entire trend prevailing in the global markets urges the individual companies to manage their human assets effectively, so that the organizations can improve itself, even while protecting the well being of the employees. This paper will discuss how the performance of the Organization can be improved through the HR practices and also how employees’ well-being can be enhanced through the HR activities. An organization performance can be improved through strategic HR practices, if the below aspects are successfully carried out. 1) Effective and efficient running of an organization through HR practices 2) Profits procured 3) Attaining the organizational targets through the HR activities, and finally 4) Bringing about customer satisfaction through the Strategic HR planning. On the other hand, the various employees-centric aspects, which can be improved through strategic HR practices, are 1) Increase in the motivational levels through HR practices 2) Employee retention 3) Providing an open book Management style, 4) 360 –Degree performance Management Feedback systems 5) Rewarding system 6) Reducing stress level among the employees Impact of HR Practices in Business Performances: It is a well known fact that Human Resources management plays a vital role in making a difference in the business results. The efficiency and effectiveness of an organization can be greatly influenced by the HR practices under the concept of HR Benchmarking. “HR Benchmarking helps to achieve the sustainable competitive advantage in Human Resource Management.”(Andie). HR benchmarking is a concept of comparing the performance of the company with that of the competitors who performs best in the market. Usually the HR consulting companies provides a detailed report with the HR benchmarks. Some of the areas which are focused by most of the companies in Human resource to increase their efficiency encompass the following, namely Compensation and benefits to the employees, Fluctaution and turnover, training and development, recruitment and staffing, employee absenteeism, and total number of employees in a company. The above mentioned elements are some of the common factors which are targeted by most of organizations in a way to improve the efficiency and the performances. HR benchmarks can be used to procure a general overview regarding the status of the Human Resources Management in an organization. Thus it assists the HR personnel to gain a critical assessment about the performance of the HR department with respect to the peer group and the competitors in the market. Above all it allows the HR mangers to set achievable goals which can lead the company towards improvement and innovations. Moreover the HR Benchmarking is a useful phenomenon where the HR people can formulate and develop effective HR strategies in comparison with the external information procured, which ultimately results in the increased efficiency of the organization. “Human resource (HR) activities are frequently acknowledged to play a central role in linking employee capabilities with the performance requirements of a firm.” (Youndt et al. 1996). The next component to be discussed would be the profits made by an organization through the effective HR strategies. Studies found “significant relationships between HR practices and accounting profits among a sample of banks.” (Wright et al. 2005). The HR staff should be able to evaluate the department’s involvement to the bottom line by taking the profits made by the company into consideration. “Human resources managers are in an ideal position to measurably increase their department’s contributions to company profits.” (Burrows 1996). This can be brought about through the human-resource based solutions for the business problem. The HR department can concentrate in reducing the cost to the company thereby increase in the profits to the company. “Organizations can create customer value by either reducing costs or increasing benefits in the production equation (i.e., value =benefits/costs).”(Youndt et al. 1996) The HR managers are trained to recruit the candidates who can offer the best to the organization and with previous experiences so that they can be retained for a longer duration and can add up to the profit to the organization. One of the major ways through which the cost can be reduced is by calculating the savings from the solution i.e., through the cost cutting process the company can save a considerable amount which in turn increases the profit of the organization. Effective HR staff can train the employees which is performance centered where the employees will be able to sort the difficulties or the problem and find a solution for the problem. The next vital aspect is achieving the organizational targets through the effective HR practices. Every organization has its targets and goals to be achieved every year. Based on the nature of the business the target varies. The targets are framed by the top level management and they cascaded down hierarchically to the departments, divisions and finally to the employees. Thus each and every employee is set to achieve their individual targets whereby it ultimately results in the attainment of the organizational goals. “Arguments made in related research are that a firm’s current and potential human resources are important considerations in the development and execution of its strategic business plan.”(Huselid 1995).Thus from the above point it is clear that the plans and the strategies of an organization towards to the achievement of the goal should be trigged by the effective HR strategy. Also the other vital concepts in achieving the organizational targets include placing the right people in the right place with the right mix of skills by the HR department. They should be able to orient the employees’ behaviors and attitudes towards the working environment and track them on the right path to attain the goal. Optimizing the workforce by giving them motivation and fair treatment by providing them with the best compensations are some of the basic functions performed by the HR personnel towards the achievement of the organizational goals. Providing the positive environment to the workforce where they can exhibit their talents with the given resources, can add up to the attainment of the organizational goals. The next point to be discussed would be the role of the HR practices in increasing the customer satisfaction. Various studies reveal that a favorable work place provided to the employees can result in the increased level of customer satisfaction. “Service businesses where the employees have appositive service climate have customers who are more satisfied.” (Schneider and Barbera 2011). Thus the positive environment can be brought by the policies, procedures and practices which favor the employees which in turn are framed by the HR department respectively. Thus the proactive HR people should have a keen eye towards engaging the workforce to make them perform better, so that they understand the organizational focus on capturing the customers’ needs and satisfying them ultimately. A healthy working environment and a positive work culture are the two main pillars that support the employees to have a consistent and thoughtful focus on the goals and the quality of their work and service. The destination would be the customer satisfaction which obviously results in increase in the revenue of the company. Thus a positive working environment results in well-trained workers, who with a prominent support from the HR and other organizational members can serve the customers well. Upon receiving the best service from the employees, the customers report higher level of satisfaction. Thus the basic structure of the HR department should be effectively built up in order to elicit service oriented performance from the employees. Impact of HR Practices in Employee well-being: HR managers in each and every organization are implementing innovative retention programs as part of their strategic HR practices, so that they can retain their employees for a longer period in their organization. Thus one of the recent and the innovative HR strategy in enhancing the employee satisfaction and well-being includes the issuing of ESOP which means Employment Stock Option Plan. This one of the most important employee retention and motivation plan which has emerged in the recent years. “An ESOP program is essentially an option provided to employees to buy an allotted share of the equity at a future date, at a price determined at the time of grant.” (Ramkumar). Consequently the employees can get the benefits from the stocks if the price of the stock rises from the grant price. Moreover the ESOP can bring about the employees retention, and act as a motivational factor. Therefore with the increased demand in retaining the talented employees, especially in the service industries most of the companies adapt the ESOP approach as part of strategic HR practices, which also has a considerable effect on the motivation of the employees. It can also be considered as the performance-reward for the right and the skillful candidates. The next concept to be discussed would be the HR practices in enhancing the satisfaction levels of the employees. Through the employee surveys healthy and safe work place can be provided to the employees which allows them to work effectively with a sense of satisfaction. The concept of Open book management can provide a feel that they are the part and parcel of the organization. This can be attained by sharing information like the management objectives, company policies, and information about the turnover, bonuses and other compensation details. This can be brought about as part of the strategic HR practice, popularly known as the participative management. It also allows the top level management to align the workers with the business objectives and targets to be achieved. An innovative system that prevails in most of the organizations to motivate the employees is called as the 360 Degree Performance Management feedback. “This system, which solicits feedback from the seniors (including the boss), peers and subordinates, has been increasingly embraced as the best of all methods for collecting performance feedback.” (Sharma). This is considered to be one of the important HR practices where each and every employee has the rights to reveal their opinions about the different operations of the company. Unlike the olden days where people work hard to impress the higher authorities for the sake of promotions and increments, now a day every individual in a team is responsible to provide the relevant, positive feedback to the higher authorities. Through this method the HR people can easily identify the people who are able to tackle the problems. This will allow them to identify the skillful leaders for higher levels where handling situations and decision-making forms the important part. As the employees are made to take part in the discussions about the various activities of an organization, they automatically develop a sense of responsibility to achieve the goals of the firm. “Group task be designed so that all members would see it as providing high autonomy, and therefore experience substantial personal responsibility for the outcome of the group” (Hackman and Oldham 1976). The other HR activity in enhancing the employee satisfaction would include the process called as the Fair evaluation system where the individual performances of the workers are directly linked to the organizational goals. During those evaluations, the top performers are highlighted by the HR department. “Create profiles of top performers and make them visible through company intranet, display boards etc.” (Sharma). This is one of the best and effective techniques because it also triggers the other employees to put in their best effort, thereby creating a positive competitive environment. By following this HR centric systematic approach in sorting out the performers, the non-performers can be easily sorted out and they can be motivated and trained accordingly. “Providing formal and informal training experiences, such as basic skills training, on-the-job experience, coaching, mentoring, and management development, can further influence employees development” (Huselid 1995). This is one of the age-old but effective HR techniques in increasing the motivational level of the employees. It is a proven fact that the employees are the biggest source of ideas. Thus the HR departments in most of the small and big organizations recognizes and nurture the ideas of the employees. The employee-management meet, suggestion boxes are some of the ways through which the employees can be attracted to take part in the decision making and providing ideas to the organization. The meetings with the top level management can break the barriers between the employers and the employees and can provide the employees with the comfortable environment to work in. Most of the multi national companies and their HR department facilitate these types of avenues to increase the motivational level of the employees. The other strategic HR function, which could enhance the motivation and well-being of the employees, would be the allocation of the performance linked rewards or bonuses to the employees. “Individuals who were desirous of growth satisfactions at work should respond especially positively to jobs high on the core dimensions, since these individuals are most likely to value the kinds of opportunities and internal rewards that complex jobs offer.” (Hackman and Oldham 1976). This should be purely based on the performance of the team or the individual. This can motivate the workers to give their best performance so that they can procure extra bonus. On the other hand the bonus given by the company on occasions should be designed in such a way that there is no payout until the company achieves the set target. Thus merely recognizing the work does not work, it should be also accompanied with the rewards both in the monetary and non-monetary terms. Apart from rewarding the employees, delighting the employees with the unexpected bonuses and gifts can also lead to the considerable increase in the motivational level of the employees. Other than providing the gifts and reward to the performers, non-financial recognitions can also be given to the employees who are in need of motivation. This can provide them with a sense of responsibility and can provoke them to perform better. “Investments in HR activities such as incentive compensation, selective staffing techniques, and employee participation resulted in lower turnover, greater productivity, and increased organizational performance” (Youndt et al. 1996) Another important concept that can be achieved through strategic HR practices and which can improve the well being of the employees are reducing the stress levels among the employees. “Stress in the work place can make people dread walking in to the office every morning, then make them worry about their jobs at night.” (Hengst 2012). Stress is one of the important threatening factors which not only affects the morale of the employee but also disturbs the company’s productivity. Hence the HR department has it role in eradicating or reducing the stress level among the employees through various techniques. One among them is arranging company sponsored for trips for the employees and even their families on special occasions and during particular weekends, so it can aid the employees to relax their mind and reduce the stress level considerably. “Humorous activities, anecdotes or even fun training materials can lighten up the job environment and add an incentive for employees to participate and learn.” (Hengst 2012). Apart from the above in most of the organization the HR department should “maintain open lines of communication between the HR and other departments, policies can be enforced and early action can be taken to prevent critical issues from arising.” (Hengst 2012). Moreover the HR should have a constant check on the attitudes and practices of the workers and should identify the areas of concern. The HR personnel should be friendly, diplomatic and should be able to assist the middle level mangers to handle the low level management namely the workers and the supervisors. The HR department can also create a positive environment by incorporating corporate culture in the form of training sessions, meetings and discussions. “Such a culture seeks to both engage employees emotionally to the firm and to encourage them to maximize their performance.” (Wright et al. 2005). Thus, one of the major tasks that the HR people have to fulfill among the employees using strategic HR practices is the concept of job satisfaction and considerable reduction in the stress levels. “The rationale for focusing on the high commitment approach to HRM lies in the assumption that the practice will enhance organizational performances.” (Wall and Wood 2005). Thus the HR practices should include the techniques to elevate the job satisfaction and employee engagement. Conclusion: All the above mentioned strategic HR practices are followed by most of the organizations with a view to increase the employee well-being and thereby increase the productivity of the organization as well. Among the various resources, human resource is the important resource in an organization. Apart from procuring the right and skillful candidates through optimal HR strategies, the organizations and its HR Department through more strategic HR practices can motivate the recruited employees, so they can perform effectively and can contribute towards the attainment of the organization targets. Thus, it is clear that the human resource department need to perform the central as well as the vital role in bridging the employee capabilities to the organizational targets, and thereby elevate the performance of the firm. Moreover various strategies framed by the HR personnel have to be based on the employees’ attitude towards the working environment, their roles in the organizational setup and their commitment towards their job. To cover it in a nut shell, the effective performances of the employees and thereby the organization, mainly depends on effective and strategic HR practices. Because as discussed above, optimal HR practices can only lead to employee motivation and satisfaction, triggering them to perform well and contributing optimally to the organizations’ function. Reference: Andie, CZ., Using Benchmarking To Increase Performance and Efficiency, [Online] Available at http://andiecz.hubpages.com/hub/Using-HR-Benchmarking-to- increase-performance-and-efficiency [Accessed March 27, 2012] Burrows, DM., 1996. Increase HR’s Contributions to Profits, [Online] Available at http://findarticles.com/p/articles/mi_m3495/is_n9_v41/ai_18758407/[Accessed March 27, 2012] Hackman, JR and Oldham, GR., 1976. Motivation through the Design of Work: Test of a Theory, Organizational Behavior and Human performance, vol.16, pp.250-279. Hengst, A. Reducing Workplace Stress, [Online] Available at http://www.hrworld.com/features/reduce-workplace-stress/[Accessed March 27, 2012] Huselid, MA., 1995. The Impact of Human Resources Management Practices on Turnover, Productivity, and Corporate Financial Performances, The Academy of Management Journal, vol. 38, no. 3, pp.635-672. Ramkumar, V. Designing A Successful ESOP Program, [Online] Available at http://www.cedar-consulting.com/pdf/Designing%20a%20Successful% 20ESOP%20Program.pdf[Accessed March 27, 2012] Schneider, B and Barbera, KM., 2011. Driving Customer Satisfaction Through HR: Creating and Maintaining A Service Climate, [Online] Available at www.shrm.org/Research/Future WorkplaceTrends/Documents/SIOP%20 %20Creating%20a%20service%2020environment%20through%20HR.pdf. Sharma, G, Top 10 HR practices, [Online] Available at http://www.empxtrack.com/human-capital-management- system/articles/Human-Resources-Management-Practices-top-ten/[Accessed March 27, 2012] Wall, TD and Wood, SJ., 2005. The Romance of Human Resource Management and Business Performance and the case for big Science, Human Relations, vol.58, no.5, pp.429-62. 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