Management of Human Resource - Essay Example

People Resourcing (HR People Resourcing (HR) Titus Rock Manickam Order No. 207872 08 March 2008 Table of Contents 1. Introduction .3 2. Best fit and Best Practice.3 3. Key external factors deemed significant..5 3.1 The Pest Analysis 6 3.1.1 Political factors.6 3.1.2 Economic factors..7 3.1.3 Socio-cultural factors7 3.1.4 Technological factors7 3.2 Direct External Factors.7 3.2.1 Location7 3.2.2 Availability of raw material..8 3.2.3 Closeness to market..8 3.2.4 National and International markets...8 3.2.5 Availability of skilled labor..8 3.3 Internal factors..9 3.3.1 Management of Human Resource.9 3.3.2 Problems facing Human Resource: Case Study9 3.3.3 Lack of teamwork.11 3.3.4 Ineffective appraisal system.12 3.3.5 People and Performance model13 4. How and why will people resourcing develop over next decade.........14 5. Conclusion.15 Bibliography..16 People Resourcing (HR) 1. Introduction Human resource is the key input in any organization. Management of human resource is the force that drives an organization. It is also the most challenging aspect of management because managing human beings is a skill that has to be constantly honed in order to achieve peak performance from employees. Throughout history those who wielded enormous powers did so because they possessed the capability to handle men. It is easy to handle machines and animals. But why is it difficult to handle men It takes wisdom and experience to handle men. Today, large corporations are run by the force of capable men and women. They are men and women who lead by example, team work, communication skills, and dedication. In the modern times, it is not enough to be highly skilful. One has to be adaptable to adjust with changes in technology and environment. 2. Best fit and Best Practice The need for development of a strategic approach is correlative to the 'best fit, best practice' concept in management of human resource. Best fit is not simply use of the best man or woman for a particular job slot. It goes beyond to achieve the winning situation by harnessing the talents and skills of one employee for the purpose of achieving a specific target or goal. People sourcing align with the company's strategy and strategic human resource management has a stake in the company's performance and results. (Sandeep Krishnan and Manjari Singh). The importance of this approach is gaining ground as traditional management techniques based on 'one system fits all' approach is rapidly losing out in view of the frustration felt by both the management as well as the employees to fit into an outdated system which is no more suited for either. Instead, today the preference is for capability with communication skills. For instance, the capability of a particular employee may not be of very high order, but if his communication skills are noteworthy he may be the ideal choice to carry out a job, a project, or even a whole enterprise. Modern day technology is designed to bring out the best even in the most mediocre individual provided he or she abides by the simple instructions codified as commands. The tremendous growth of information and communication technologies has exposed the new generation today to a system run efficiently with the help of sleek computers, printers, scanners and other gadgets which has left the system of the previous generation overwhelmed and on the throes of extinction. The system which was in vogue just a decade ago has been outpaced in terms of efficacy and communication methodologies. The present office scenario in most establishments, even in third world countries, presents an atmosphere of youthful exuberance blending with computer aided data systems in place. Handling men enjoins a host of activities and concepts. It has to do with operating, planning, control, research and development, and decision making. Indeed, the present age's requirement for 'best fit, best practice' approach is necessary in the highly competitive nature of doing work today. Even with automation and computerization prevalent in every part of the industry, the decision-making powers mainly rest with human beings who comprise the management team. Granted, in some organizations in certain situations, workers may be allowed to play a role in the decision making process. However, in most cases the decision-making process starts and ends with the leader or the management team. Nevertheless, the 'best fit and best practice' concept pervades the entire fabric of the organization on a continuous, ongoing basis. The HR department is seized of the exercise of monitoring the performance of every employee. A drawback in the performance of even a single employee reflects on the entire organization's edifice. The physical body, no matter how strong, feels the slightest hurt or wound in any part of the anatomy. The organizational structure of the company too is not immune to the poor performance even from a single individual. The cascading effect is felt in the entire framework. Be that as it may, it is impossible to create a perfect organizational structure. Organizations are made up of human beings all of whom are imperfect. Nonetheless, through constant vigilance it is possible to track deviations and apply remedial procedures. The company's obligations do not end within the confines of an organization. Internally it may comprise the staff, office system, wages and finance. But it has external obligations too. Customers, retailers, agents, suppliers, distributors, and our competitors too constitute the company's concern. It is critically important to ensure that each and every component of the organization is in place and monitored by a responsible personnel. (Pest Analysis). 3. Key external factors deemed significant in the evolution of people resourcing policy and practice in organizations To a business organization, external factors constitute local as well as global environments. Locally, external factors are location, nearness of sources for availing raw materials, closeness to market for purpose of sale, business at national and international levels, and availability of skilled labor. These external factors are crucial and directly linked to business. The interaction of the company with society for the latter's benefit is also an external factor. Political parties, competitors, and NGOs too are counted among the external factors. However, these external factors do not fall under the daily transactional nature of business and only affect the company periodically. In every case, external factors impact business and the company's HR policies follow close on the heels of each of these in the course of its business or as a measure of goodwill. (Sile Fleming). 3. 1 The Pest Analysis The core strategy of an organization is linked to the political, economic, socio-cultural and technical (PEST) factors, locally and globally. These factors hold statutory, legal, economic, social, cultural and technological sway over the organization's administration, strategy, people sourcing, and existence. 3.1.1 Political factors Besides the legal and statutory aspects, the government of the day from time to time considers debates, consensus, changes, modifications, and enacts laws in respect of corporations, social organizations, institutions, individuals, etc. The issues basically cover environment, internal and international trade, safety aspects, employment laws, competition, etc. These become binding on organizations. The organization necessarily formulates its political policies according to the political situation. The political situation arises due to the democratic, socialist, theocracy, dynastic and dictatorial type of governments which exist in the world today. 3.1.2 Economic factors The economic bond between nations at the global level and local level is getting increasingly tied up with information, communications and infrastructure technologies advancing rapidly. This impacts trade laws, tarrifs, monetary policies and interest rates, taxation, exchange rates, inflation, etc. People sourcing at local and global levels, employment terms, exit policies, also come within the purview of economic factors. 3.1.3 Socio-cultural factors Industrial organizations depend on socio-cultural welfare because its prosperity and existence depends on its positive influence on and acceptance by society. Besides locals getting the benefits of employment, an organization has overall interests in the demography, living standards, small scale and cottage industries, education, social and cultural issues and practices of the region. 3.1.4 Technological factors Research and development, upgradations, latest inventions and discoveries in the field of the organization's operation, energy, links with educations institutions to source fresh talents, etc. make up some of the important technological factors that serve the organization's interests. (Pest Analysis, Value Based Management.net) 3.2 Direct External Factors 3.2.1 Location Among other factors, location of the company impacts people sourcing in several ways. A company will strategically choose a location with favorable environment for business and the one of the environmental factors is availability of skilled labor. 3.2.2 Availability of raw material Availability and processing of raw material impacts people sourcing. An industry could provide livelihood to thousands of people in the locality by directly or indirectly procuring raw material through contracts, cooperatives societies, and even individuals. Private transporters benefit by transporting raw material to the industry. 3.2.3 Closeness to market A company will choose to maintain strong presence where the market is flourishing. Competition has a role in people sourcing for skilled marketing personnel. The location of market is widespread and may not be limited to one area. This necessitates sales representatives or sales offices to be opened wherever the marketing potential exists. 3.2.4 National and International markets In modern times the world has become a global village. There is no nook or corner where goods and services cannot be exported. People resourcing have transnational implications for marketing purposes. Local as well as overseas representatives or full sales staff may have to be engaged for the purpose of trade depending on the volume and scope of business in the specific foreign country. 3.2.5 Availability of skilled labor People resourcing have lot to do with the location choice of a company. Industries are set up where skilled labor is available. This necessarily involves presence of schools, colleges and institutes for vocational and technical training in the region. 3.3 Internal factors There are important internal factors such as medical facilities, welfare centre, and other social concerns which impact people resourcing policies of the company. In the course of evolving policies and practices of people resourcing the company must duly consider its obligation to society at large. After all, it is society where the company is carrying on its business. 3.3.1 Management of Human Resource Machines and systems do not run companies. People do. Without proper and well defined human resource policy and practice the company is likely to come across unwanted clashes and strife with its workforce and waste time and resource. Policies and practices must be fair and just and equitable. Care and concern for human basic needs, payment of fair wages, appreciation of good performances, endorsement of integrity and activities promoting social harmony, and all other social and business interests must be duly acknowledged and encouraged. (Peter Nielson). 3.3.2 Problems facing Human Resource: Case Study It is a fact that no two person could agree on everything. They may see eye-to-eye on certain issues, compromise on a few, and disagree on the rest. Sometimes the disagreements turn sharp, at time even leading to unpleasantness. The company's work force is no different. After all the employees are human beings and susceptible to emotions, preferences, likes and dislikes. This part of the paper will focus on a fictional organization, Fastening Technology Limited (FTL) to help analyze some problems plaguing its top management level. FTL's Senior Management Team, particularly its new General Manager, Phil James has to initiate corrective measures that needs to be put in place so that the revised HR policies addresses some of the business problems, and thereby ensure successful functioning of FTL. Although the problems faced by FTL in the current situation had its origins in the previous tenure; it became the responsibility of Phil James to solve it. FTL and its new head, Phil, were besieged by many problems, inadequate handling of which have raised doubts about the leadership skills of Phil and the viability of the FTL unit in Manchester. Sparrow (1999) argues that managers must be proactive, willing to take risks, action oriented, able to delegate and trust staff, etc (Joynt and Morton, 1999). But, Phil fell short in some of these attributes. Even external factors like the merger between Global Engineering Inc, and the European automotive component giant, Fischler GmbH are causing problems for Phil and FTL, compounding their woes and worsening matter due to internal squabbles. The main problem faced by FTL particularly in its HR segment is the underperformance by most of the top managers and workers. Due to inadequate abilities or skills, lack of motivation etc., many top managers are not performing up to their desired level. For example, the new Sales Manager did not match up to expectations. He was a former apprentice, knew little about sales, and this made him struggle in his role as Sales Manager. The new quality manager despite being a long time apprentice in FTL did not meet the required standards. For this FTL had its share of blame mainly due to inadequately defined HR policies related to training. Because of these inadequacies, the quality of the FTL products had turned inferior. Another key member in Phil's team, Finance Director Bill Braithwaite, was also not making any significant contributions. The reason appears to be Phil's promotion as GM, overriding Bill, who was a senior to Phil. Bill has become de-motivated and so fails to contribute. "In order to remain competitive, change has to be made inevitable part of organisational life. But resistance to change can trigger productivity paralysis through low morale and reduced output." (trainingzone.com). Therefore, here also HR policies come under the scanner because of HR's failure to address Bill while elevating Phil. So, although their working relationship had been good in the past, Phil's change from a junior position to a higher post has been difficult for Bill to accept. Another problem Phil and FTL were put to face was the lack of support from the Human Resources department itself. That is, like in the previous cases, a successful HR manager, Catherine was also not able to perform to her full ability due to her new role as the person in charge of developing a new global organizational culture for Global Engineering. So, overall this underperformance by Phil's senior management team due to lack of motivation and ego problems only served to manifest themselves in transmissions from one problem to another. In order for an organization to function smoothly and effectively, "SHRM as a subject of study assumes that the interests of employers and employees must coincide and be preoccupied with the end goal of organizational effectiveness." (Bach 2005). 3.3.3 Lack of teamwork Another problem of grave magnitude is lack of team working culture in the organization. This results in the workers' inability to move as self-managed teams without team leaders, so they always need the supervisors' presence to function, causing loss of time and money. "groups of employees towards the lower end of the organizational hierarchy, who are arguably the least likely to be responsive to the attempt to produce an organizational culture" (Maby, Skinner and Clark 1998) 3.3.4 Ineffective appraisal system Another main problem faced by FTL is the ineffective appraisal system, which is necessary to monitor the workers' competence. This issue with the appraisal system was confirmed by the employee opinion survey as well. Even interactions with the workers to get their ideas, suggestions, complaints and grievances have not achieved its objective. The statutory meetings between the management and the workers have deviated from their intended purpose and instead become a forum to moan about unhygienic conditions of the toilets, poorly maintained car parking and bicycle shed. With de-motivated and stressed technicians, workers, and highly qualified engineers leaving FTL, shortage of good operators have occurred leading to poor performance (HSE). Also, these problematic situations have led the hitherto inactive and insignificant trade union to recruit new members to gain formal recognition. Phil is totally aware that the company's performance has gone into serious decline. This fact has also been brought to his notice at the two day meeting at Head Office in Dayton, Ohio, by the top management, who strongly put across the message that under-performing units would be sold off or closed down. 3.3.5 People and Performance Model In order to revive and restore its fortunes, Fastening Technologies Limited will have to set about the exercise on war footing. The corrective measures must begin from the top level. The first problem FTL and Phil is facing is underperformance or non-cooperation by the senior management team. Roberts (1997) suggests that organizations can identify the key characteristics of employees which then can be used to optimize their performance. In any organization, the performance of the management team and also the workers will be at an optimum level only if their level of motivation and morale are maintained at optimum level. In the case of FTL, the performance of the three newly appointed managers, that is, the new sales manager, the new Quality Manager, Angela, and the HR manager, Mary, are on the downside mainly due to their lack of experience and motivating skills. So, the key to this problem is mending fences with the aggrieved parties like Bill by making them important part of the decision making process and by rewarding them with promotions, perks and incentives. "HRM is proactive rather than reactive, system-wide rather than piecemeal, and treats labor as social capital" (Blyton and Turnbull 1992). This, in short, means treat your people with the respect they deserve. The revival and restoration will automatically happen. "The overall objective of reward management is to reward people fairly, equitably and consistently in accordance with their value to the organization in order to further the achievement of the organization's strategic goals." (Armstrong 2000). FTL already has a reward system in place like job grades and bonus based on individual performance. For example, senior managers could earn an additional 20% apart from their salaries if they performed well and FTL's profits increased. Such incentives and rewards right down to the bottom rung of the grade not only helped in motivating employees but also put stop to the loss of good people, giving Phil a good pool of talented and skilled workers. 4. How and why will people resourcing policy and practice develop over the next decade The prevalence of good, team working culture helps to achieve a congenial environment where workers perform different roles in unison to produce the desired end results. Boxall and Purcell (2003) suggest that SHRM is an organization's human resource asset and can be used to achieve a sustainable competitive advantage. According to Torrington et al., (2007) there are in-house courses and outdoor-type courses. In the future, organizations will be structured with a 'collage' of humans doing their allocated work under the supervision of a leader. " more strategic approach in the sense of the integration or bundling of practices... Training, teamworking and share ownership" (Bach and Sisson, 2000). These workers will be apportioned different roles according to their educational qualifications, experience, skill, knowledge etc. The employees will be placed in optimal working environment, with the HR department and its personnel playing a crucial role. It is in such environment alone that employees will be motivated to render peak performance. An organization that stagnates may not survive as diversification, mergers, acquisitions have become the latest trends as alternatives in competition and will continue to develop. Schein (2004, p.418) pushes forward this idea by stating "that the leader of the future must be a perpetual learner". Perpetual learner in the sense, he or she should learn new levels of perception and develop insights for running an organization. The HR department will have a crucial role. They will be in constant coordination with all other departments to monitor and motivate the employees, to "give them a clear sense of purpose, an accurate explanation of their personal importance in the running of the organisation, and regular communication about the direction and performance of the business" (hrzone.com). Participation in goal-setting will be an effective model for enhancing goal commitment (Locke, Latham & Erez). 5. Conclusion People sourcing is crucial to organizations in search of talents capable of fast and efficient deliveries. In the days ahead its importance can only increase with fast advancing technology and systems. Fast paced performance, cutting edge competition, and penchant for quick results is bound to make the role of human resource more critical and crucial than ever. It is only in this environment of coordination and cooperation, encouragement and motivation, the organizations will scale new horizons with the employees firmly in saddle. Bibliography Anderson, G.C. 1993, Managing performance appraisal systems, Cambridge, UK: Blackwell. Armstrong, M 2007, A Handbook of Employee Reward Management and Practice, 2nd edition, London and Philadelphia: Kogan Page Bach, S 2005, Managing Human Resources- Personnel in Transition, Blackwell Bach, S & Sisson, K (eds) 2000, Personnel Management - A Comprehensive Guide to Theory and Practice, Blackwell. 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