Evaluating Human Resources in the Australian Market - Case Study Example

Evaluating Human Resources - in the Australian market In contemporary business and market environments, developing valuable resources is fundamental in enhancing the quality of production of commodities and services, increasing capacity of production, improving efficiency in delivery of quality products and services and developing healthy and effective relationships between the internal environment and external environments of the firm (Sandler & Keefe, 2003, pp. 89). Consequently, modern firms and institutions are able to totally meet the rising demands, changing needs, tastes, preferences and expectations of the global consumer, they are able to enhance their market shares and volume of sales and enhance their sustainable competitive advantage as analyzed by Lucas (2004, pp. 64). Among valuable resources that are available and allocated in firms and institutions includes material resources, financial resources, capital resources, information resources, technology, space and human resources (Edwards et al. 2007, pp. 121). Presently, organizations have realized the important role human resources play in organizing and utilizing the other resources accessible by the organizations, which makes human resources the most reliable and valuable resource to an organization. Human resources encompass all individuals who make up the labor force of a firm or institution as defined by Lakshmi (2005, pp. 21-22). Primarily, establishing the existing and future organizational needs for core and contingent employees and labor force respectively, in regards -to skills, knowledge, abilities, adaptability and proficiencies is paramount as stated by Grote (1996, p. 71). In order to ensure consistency in quality of human resources and human resource activities, this report seeks to critically analyze the evaluation of human resources in the Australian market by examining benefits firms gain from conducting HR evaluation and the main reasons why organizations fail to evaluate their HR interventions. Measuring the effectiveness of the Human Resource function and individual human resource activities The human resource functions both small and large has been influential in reinforcing the strategic directions and structures in modern firms and institutions. Previously, the human resource were only tasked with enforcing developed policies, but their roles have now extended to being key players in achieving anticipated business goals, objectives, missions, vision and strategic outcomes (Edwards, et al., 2003, pp. 87). The Human resource management in Australian firms, which is charged with directing, overseeing, monitoring, strategizing, empowering and managing the human resources of an organization has the responsibility of not only aligning the skills, abilities and competence of the human resource with the goals and vision of the firm, but also, regularly assessing and reinforcing the skills, abilities and competence to guarantee value, quality, effective impact and sustainable competitiveness as discussed by Schuler et al. (2008, pp. 63). Lakshmi (2005, pp. 34-35) defines evaluating the human resources of a firm as effective assessment of a firm’s human resource services. Evaluating the human resources of an organization helps an organization to establish the human resource programs that are best placed to attain the goals, vision, mission and objectives of the firm, to assess how well the human resources are executing their mandate and delivering quality performance and outputs, to benchmark the performance and productivity of the human resource to ensure continuous quality improvement and delivery, to foster creativity, innovativeness and change, to help the management focus the human resource on fundamental issues and to help draw the human resource closer to the line functions of the firm or institution (Edwards, et al., 2007, pp. 91). Presently, continuous evaluations of the human resource functions is imperative for Australian firms and institutions that seek to identify existing gaps in valuable resources and identifying structural challenges that may impact on the human resource function’s strategic competence. During the evaluation process of human resource function and individual human resource activities, the performance of the employee in regards to productivity, quality and efficiency is, scrutinized and reviewed, with a single aim of establishing the strong and weak points of the employee and establishing prospects for the employee to develop their skills, experience and abilities and knowledge (Lucas, 2004, pp. 32-34). According to Sandler & Keefe (2003, pp. 21), evaluating the human resources can be essential for organizations in developing strong basis for developing and implementing integral decisions impacting the labor force such as job promotions, hiking of employees’ remunerations, demotions, provisions of benefits and incentives and establishing effective disciplinary measures for continuous redundancies and un-productivity by one or most of the employees. Murphy & Cleveland (1995, pp. 134) categorically states that evaluating the human resource functions and activities helps the top management leadership in understanding the needs of each individual employee hence, being able to develop and implement effective training programs and based on employee’s needs and requirements, putting in place systems and mechanisms to help employees enhance their work outputs. Measuring the effectiveness of the human resource function and individual human resource activities, the human resource managements in Australian market are in a better position to create adequate and productive human resource strategies, it helps in laying a framework for recruiting and firing techniques and methods and it helps in enhancing work performance through counseling of the labor forces, training and development of employees which is founded on the information gathered after the evaluation exercise has been accomplished (Zhu, et al., 1996, pp. 87-88). The first step in ensuring successful evaluation of human resource functions and activities is for the human resource management to offer better leadership, direction, support and guidance in the need for evaluation by communicating to the labor force the important role evaluation of human resources play in helping attain the organization’s goals and objectives and developing and empowering workers as highlighted by Edwards et al. (2003, pp. 96). This is achievable by organizing staff meetings with all concerned stakeholders to analyze the main objectives, benefits and gains of evaluating them and deciding the most appropriate appraisal systems to use by discussing the strengths and weaknesses of varied appraisal systems and selecting the best one (Lakshmi, 2005, pp. 54). By collaborating with the human resource from the start prior to evaluating them helps employees understand the need for evaluation, helps them own up the evaluation processes, enhances their commitment and accountability in making the evaluation processes a success and motivate the employees to take performance appraisal seriously, own the set evaluation goals and objectives and foster team work, which has the impact of promoting positive and increased performance of work processes and operations (Sandler & Keefe, 2003, pp. 76). Benefits organizations gain from conducting an HR evaluation The benefits that organizations gain from conducting human resource evaluations cannot be over-emphasized. According to Schuler et al. (2008, pp. 43), through effective human resource evaluation processes in Australian firms, top management leaderships are able to not only distinguish high performing employees and productive ones, they are also able to identify innovative and creative employees who are crucial to the organization inn developing unique , inimitable, valuable, rare , and costs to substitute ideas, systems and structures that are critical in fostering the sustainable competitive advantage of the firm and ensuring the organization is not only flexible enough to changes in turbulent market and business environments (Zhu, et al., 1996, pp. 31). Moreover, they remain relevant, feasible and viable to global modern customer who have varied and changing needs, demands, expectations and preferences (Lucas, 2004, pp. 65). Innovative and creative employees which are identified through human resource evaluation are the solutions to effectively and efficiently satisfy the customer. In Australia, facilitating or failing to evaluate the human resource functions has the potency to make or break an organization. Evaluations of the human resources should not only be conducted when the organization is performing poorly financially, but the process should be integrated within the organization’s culture to ensure, evaluation processes are the way of life and not merely a one time annual thing employees have to do and forget about it (Edwards et al. 2007, pp. 66). More importantly, evaluation of human resources should be followed by giving feedback to evaluated human resource in order for them to track their progress, identify their strengths, their weaknesses and existing opportunities and hence, capitalize on their strengths, ameliorate their weaknesses and take advantage of available opportunities which consequently leads to high performance, enhanced productivity, commitment and accountability from workers (Sandler & Keefe, 2003, pp. 32). According to Rao (2004, pp. 61), feedback from evaluation processes is important in altering negative, investigative and unfair evaluations into positive, collaborative and unbiased ones. The author indicates that quality feedback does not focus on the weak points of the labor force, but it also highlight the strengths of employees and help them make better choices and improve on their weak points. Focusing the feedback of HR evaluations on the weak areas of employees has the negative impact of demoralizing employees and creating negative perception and attitude towards evaluation processes (Lakshmi, 2005, pp. 71). Among fundamental benefits accrued by Australian firms and institutions that facilitate regular and effective evaluation of human resource functions and activities includes establishment and elimination of barriers to performance and productivity and motivating the workforce to aim for new levels in terms of quality performance (Zhu et al. 1996, pp. 65). It offers regular feedback to all the employees about effectiveness on their work and help in channeling career counseling. Among variables that are evaluated during HR evaluation includes employee’s achievements, services, relationships, reliability, decision making abilities, flexibility, problem solving proficiency and adaptability to changes. Australian organizations that implement evaluation of its human resource functions and activities has an added advantage over organizations that fail to implement it or those that does so ineffectively (Schuler et al. 2008, pp. 43). Australian firms and institutions that facilitate effective evaluation and feedback are characterized by enhanced accountability by the labor forces to attain set business goals and objectives , improved trust between the human resources and the top management, increased innovation and creativity by employees in a bid to improve on their performance and improve on their weak areas as supported by Sandler & Keefe (2003, pp. 51). Such firms realize minimized rates of work redundancies and absenteeism which are the leading causes of low outputs and poor productivity among workers, enhanced levels of job satisfaction since employees know areas they are good at and based on the work needs identified in evaluation, they are equipped with adequate skills and knowledge and overall motivation for workers. In addition, HR evaluating firms and institutions have an increased flow of communication between its top management and the labor force which forms a strong basis for loyalty and information sharing which is vital in problem solving and decision making, enhanced team work, effective interrelationships among employees and thus, effective and efficient satisfaction for customers through quality performance and services delivered by the labor forces as discussed by Mathis & Jackson (2008, pp. 96-97). Among other benefits of evaluating HR functions include creating an understanding of the company and individual expectations and what is required in order to meet the expectations, opportunity to connect team and individual goals with departmental and organizational goals. The gains accrued by HR evaluating firms outweigh any time, resources and efforts put in to develop, implement and maintain the evaluation process as noted by Zhu et al. (1996, pp. 244). Reasons why organizations fail to evaluate their HR interventions There are varied reasons why organizations evaluate their human resource functions and activities as discussed above and among others retaining talent and valuable human resources, developing compensation structures, identifying employee needs and fostering employee development, achieving organizational goals and objectives, and clarifying job expectations (Edwards, et al., 2003, pp. 137). Nevertheless, there are organizations in Australia that fail to evaluate their human resource interventions. Among the main reasons for this includes the perceptions and attitudes by the management in these organizations that evaluation processes are unnecessarily costs owing to the time, resources and efforts invested in developing, implementing and maintaining the evaluation processes (Schuler, et al., 2008, pp. 143). These perceptions are founded on ignorance on the diverse benefits that evaluation generates to the organization, which outweigh any costs incurred. Due to failure by the management to understand the key elements to effective HR interventions evaluation systems which includes development of clearly defined performance standards and evaluation goals, effective monitoring structures, regular consultations and discussions on performance and establishment of specific, measurable, attainable, realistic and time bound action plans to meet needs and gaps identified in the evaluation process, many firms are unable to effectively facilitate evaluation systems and processes, which consequently, leads to failure to achieve anticipated evaluation outcomes as supported by Zhu et al. (1996, pp. 76). This discourages and makes it difficult for organizations to continue conducting evaluations of their HR interventions. Grote (1996, pp. 43) indicates that carrying out HR evaluations is a complex process that needs skills and delicacy when enforcing them since there are divergent challenges when implementing the right and effective evaluation system. Lack of competency by the top management by some of the Australian organizations in carrying out the evaluation processes present a risk in developing the wrong criteria for implementing the evaluation processes, which are not measurable and that do not correspond with the main aim of evaluating HR interventions, functions and activities (Edwards et al., 2007, pp. 35-36). This therefore, may impede organizations that would like to evaluate its HR interventions but lack the necessarily systems, competence and capability to do so. Therefore, the top management of any organization that may want to evaluate its human resources should be equipped with adequate skills and knowledge through regular training in able to ensure they facilitate fair, professional, unbiased and regular HR evaluations. Ineffective evaluation systems and programs may result in unfair and biased evaluation feedbacks which have legal consequences from human resources who may feel victimized by the evaluation process according to Schuler et al. (2008, pp. 8). In order for organizations to safeguard themselves from legal tussles and pressure from labor unions who may resist HR evaluations, organizations may opt and decide not to evaluate its HR functions and interventions entirely. Evaluating human resource in Australian Market HR evaluation systems and processes in Australia have advanced profoundly with majority of businesses, firms and institutions carrying out annual or six- monthly evaluations of its human resource functions, interventions and activities (Zhu, et al., 1996, pp. 45). This follows a realization by contemporary firms and institutions in Australian market and globally that evaluating the human resource functions is essential in enhancing quality production, enhancing performance, learning the expectations of both employees and workers and thus developing strategies of accomplishing the expectations and identifying talent, skills and abilities of the workforce and establishing the needs of the employees in terms of productivity and developing effective training programs and strategies accordingly according to Schuler et al. (2008, pp. 65). Evaluating human resource functions and activities in Australian market has not only gained prominence in business related organizations, but also, in other public service organizations such as hospitals, schools and universities, in a bid for these organizations to adapt to changes in contemporary environments and keeping pace with the changing demands and needs of modern end user of their products and services (Zhu, et al., 1996, pp. 76-77). Evaluation systems in Australia are getting sophisticated in both design and intent with the view to capture all the aspects of an employee’s performance and productivity and not merely designed to account for expenses in time, resources and efforts. The main objectives of evaluations in Australia are not only to analyze the un-productivity and low performance of workers and to establish compensations decisions and promotions, but also, to identify valuable employees and developing mechanisms on how best to retain them, understanding the needs of employees in order to develop effective training programs, identify innovative and creative employees in order to nurture their abilities and help them execute their best potential (Zhu, et al., 1996, pp. 58). As a result, firms and institutions are able to retain valuable employees, equip employees with adequate skills and knowledge and tap into the competencies of workers respectively (Edwards, et al., 2007, pp. 141). According to Lucas (2004), evaluations used to determine salaries are more often used in Singapore than in Australia where award rates of remunerations than individual contracts govern payments. The author indicates that some employees are still skeptical of evaluations owing to the negative impact of deteriorated employment relationships after poorly conducted evaluations, which side-steps vital issues of an organization. Varma et al. (2008, pp. 21) states that investment in permanent personnel function and systematic evaluations of work by employers in Australia did not begin until the World War with economic pressures for firms to become competitive in the 80s leading to refinement and sophistication of appraisal techniques used. Conclusion Evaluating the needs of the organization involves factoring in internal and external factors that impact on selection and recruitment, training, growth and development, inspiration and motivation and retention of effective and efficient workforce. Important points to consider during evaluation of the human resource is that the processes should be conducted fairly, objectively, professionally and comply with applicable labor and employment laws. Evaluation processes should not be used by the management to vindicate laying off employees, demoting them, slashing their salaries or declining to pay employees their dues. Evaluating HR firms in Australian market are accruing massive benefits compared to their counterparts who do not. Among the benefits include a chance to re-prioritize goals, enhance overview and monitoring of individual outputs and development and maintenance of a continuous quality improvement culture. References Edwards, J.E., Scott, J.C., & Raju, N.S. (2003). The human resources program-evaluation handbook. London: SAGE. Edwards, J.E., Scott, J.C., & Raju, N.S. (2007). Evaluating human resources programs: a 6-phase approach for optimizing performance. New York: John Wiley and Sons. Grote, R.C. (1996). The complete guide to performance appraisal. New York: AMACOM Div American Mgmt Assn. Lakshmi, C.S. (2005). Human Resource Development in Public Enterprises. Sidney: Discovery Publishing House. Lucas, R. (2004). Employment relations in the hospitality and tourism industries. Upper River Saddle: Routledge. Murphy, K.R., & Cleveland, J. (1995). Understanding performance appraisal: social, organizational, and goal-based perspectives. London: SAGE. Rao, T.V. (2004). Performance management and appraisal systems: HR tools for global competitiveness. London: SAGE. Sandler, C., & Keefe, J. (2003). Performance appraisal phrase book: the best words, phrases, and techniques for performance reviews. London: Adams Media. Schuler, R.S., Dowling, P., & Smart, J. (2008). Personnel/human resource management in Australia. San Francisco: the University of California. Varma, A., Budhwar, P.S., & DeNisi, A.S. (2008). Performance management systems: a global perspective. New York: Taylor & Francis. Zhu, C.J., Dowling, P.J., & Holland, P.J. (1996). Performance appraisal in Australia and China: an analysis of best practices. Monash: Dept. of Business Management, Faculty of Business and Economics, Monash University. Read More